Dick Young writes in the most recent issue of Richard C. Young’s Intelligence Report:
If you have been with me for a while, you’ve read two of my most recent issues—Embrace Russia, Ditch the Saudis and Turks and Crack! You’re in Your Tomb (about the real threat of an EMP attack knocking out America’s power grid). Well, there is more, much more, to be concerned about. Young Research subscribes to a $50,000/year European database that allows us to gauge the turning points in the economic and monetary cycles that underpin the financial markets. Many months ago, I concluded that the American economy has already entered the winter of the economic cycle. In fact, as chart #11 in my Economic Analysis supplement indicates, the industrial production sector of the economy has most probably already entered a condition of mini-recession, at the least. And what does recession mean for the stock market?
Every recession is accompanied by a crack in the stock market. And what has been going on in the first seven weeks of 2016? The sharp decline in the stock market understates risk, as indicated by my displays.
Dow Bank Stocks Slaughtered
Serious dry rot has settled in, which is odd in a presidential election year. But the preceding is far from the worst news. In only a matter of weeks, to date, three financial stocks in the Dow—American Express, Goldman, and JP Morgan—are down 20%, 20%, and 15% respectively. How many billions of market cap have been flushed as you were just catching your breath for this election year?
