September Existing Home Sales Plunged The Most In 2 Years

September existing home sales plunged the most in 2 years, extending the streak of consecutive monthly declines to six. Homebuilding stocks are hitting 52-week lows, registering their worst year since 2008. If housing is this bad during the boom, imagine what happens after the bust!

Bear Market Rallies Try To Create A False Sense Of Confidence

Corrections or bear markets have rallies. So, maybe this 500-point move up in the Dow Jones Industrials Average (DJIA) is the first upward correction in the new bear market. 

There's no way to say that we have not entered a bear market. It's possible that it will be a bear market, you can't call it a bear market now even though maybe 25% of the stocks are in bear market territory. The majority are not but it's only a question of time. There are a lot of stocks that are down quite a bit but just not enough to be a bear market. 

But remember some of the most spectacular moves that you're gonna see to the upside in a market happen in bear markets. Historically the biggest up days have been in bear markets and that is to try to create a false sense of confidence a false sense of hope.

A Bear Market And A Recession

More important that a bear market it's a recession. I mean this is a bubble not just in the stock market but in the entire economy! So, the Federal Reserve has distorted more than just markets and the problem is this recession is going to be far more painful and far deeper than the one that we had  in 2008/09 because it's also going to be accompanied by rising consumer prices. I think as Americans lose their jobs they're gonna see the cost of living going up rather dramatically and so this is going to make it particularly painful.

What Happens Next In 47 Words

1. Bear market;

2. Recession;

3. Deficits explode;

4. Return of ZIRP and QE;

5. Dollar tanks;

6. Gold soars;

7. CPI spikes;

8. Long-term rates rise;

9. Federal Reserve is forced to hike rates during recession

10. A financial crisis without stimulus or bailouts!

The Recession Is Obviously Coming

Recent article on Seeking Alpha.com: "Peter Schiff: The Recession Is Obviously Coming"

All Bear Markets Start Off As Corrections

“All bear markets start off as corrections. I think this one is probably a bear market. It’s long overdue. This is a bigger bubble than the one that blew up in 2008, and the crisis that is going to ensue is going to be far larger.” - in RT.com