August 14 was the worst day of the year for the stock market. The Dow Jones industrial average fell 800 points, or 3% and that makes for a net loss of almost 7% in the past three weeks. Additionally, the inverted yield curve has been flashing for weeks, and it has been a reliable predictor of impending recessions for the past 50 years. The last time it manifested was in 2007, in the ramp up to the 2008 housing bubble bursting. The inverted yield curve occurs when longer-term bonds, which offer higher rates of return, are passed over in favor of shorter-term bonds. The yield curve inverts when yields on the shorter-term debt exceeds those on longer maturity debt. It is a classic sign that people don’t trust their government. Washington Post:

This phenomenon, which suggests investor faith in the economy is faltering, has preceded every recession in the past 50 years.

“The stars are aligned across the curve that the economy is headed for a big fall,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “The yield curves are all crying timber that a recession is almost a reality, and investors are tripping over themselves to get out of the way.”

Now here’s Donald Trump’s take on the matter.

Yeah, that “crazy inverted yield curve!” What a silly thing that is. If only Jerome Powell would get his act together, everything would be simply dandy. Meanwhile, the rats are running down the ropes, because they know what’s coming.

Several White House officials have become concerned that the economy is weakening faster than expected, but they are not working on proactive plans to change its course. The Treasury Department has had an exodus of senior advisers in recent months, and the White House just announced a replacement for its chairman of the Council of Economic Advisers….

The Twitter posts reflected a growing anxiety within the White House about problems in the economy, which many advisers believe will determine whether the president wins reelection. Just a few hours earlier, Trump offered a contradictory assessment, saying the inverted yield curve was a good sign because there was “Tremendous amounts of money pouring into the United States. People want safety!”

,,,the escalating trade war between Trump and Chinese leaders has stopped many businesses from investing. And there are signs that the large tariffs he has placed on many Chinese imports is costing U.S. businesses and consumers billions of dollars.

“The big concern is around trade,” said Dan Ivascyn, group chief investment officer at Pimco. “The longer we remain in limbo, the more damage to the global economy.”

Small wonder #TrumpRecession is trending on Twitter.

On Twitter, Wajahat Ali, a contributing op-ed writer for the New York Times, rattled off several of Trump’s failed promises that preceded fears of another crash.

“Trump promised to eliminate the debt in four years; he increased it,” Ali tweeted. “He promised to win the easy trade war with China; he didn’t. He promised Mexico would pay for the wall; it won’t. His tax cuts were going to trickle down and spur the economy; it didnt. #TrumpRecession.”

The good thing about this is that an economic downturn will get Trump out of office. God knows I don’t want to see us go over an economic cliff ala 2008, but if it gets rid of Trump, it will be worth it. We’ve lived through a lot of recessions. I don’t think we can live through eight years of Trump. And remember: tough times don’t last, but tough people do.

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  1. This was always going to be the end of the road once enough people backed Trump. Not only is wrecking things in the name of short-term looting a near 100 year old Republican tradition but Trump has never been around money without it fleeing from the grasp of his #BabyManHands. As I’ve been saying, the only shock has been the speed of this particular unraveling. Hold on tight, folks…

  2. It may destroy my 401 K causing me to work until my 80s when they find me one morning cold and lifeless over my desk….but if it saves our country and democracy from that imbecilic son of a bitch and his incompetent minions it is a sacrifice I am willing to make.

    Tear It Down!!!

  3. Right now, my wife and I are riding along a very steep cliff wall, almost balanced between our SS and small retirement payouts, no major purchases or even money for major dental or a new car ….

    • I was actually doing okay — it’s all relative — and then I had to have major amounts of dental work. And that’s been building up for a while, as well you know. I’ve got the price of a new car sitting in my mouth. Oh, well.

      • The “writing” was right there out in the open for all to see and hear….’I’m going to run this country like a business.’

        DJT running this country like a business? Like all of his other business failures, once they/we have been looted, pillaged, picked clean, and anything left of any value sold to the highest bidder, just like every other of his failed business ventures, he’ll run like hell and blame everyone else. 63 million suckers fell for it,

        hey uh for just $19.00 a month….

  4. Very good article. We may already be in a softening economy. The strongest economy in Europe, Germany is softening, GDP is down for the past two quaters and at least one German economist is calling it the end of a golden age. Downturns are inevitable and hopefully, it comes during El Duce’s campaign.


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