As we continue our way through Q4 of 2019 and we’re only in the second day, the markets continued their sell-off. Could this just be a pullback from a strong run in September or is there something larger lurking just beneath the surface? Well, if we look at the economic data that has been released over the last couple of days, it appears that there is something beneath the surface. Earlier this week it was disappointing PMI data, especially for the manufacturing sector. Today, it was a miss on the expectations from the ADP jobs report, $7.5 billion worth of tariffs expected to be placed on EU goods – following a WTO ruling that was favorable to the US. And it was weak sales data for the auto industry. Sales of autos are starting to slow to the point where manufacturers had to provide customers with $4,100 worth of incentives in Q3 – their largest ever. This continues to squeeze profit margins and if you’re General Motors, this is a double-whammy as they’re currently in negotiations with the UAW and those workers want higher pay and more benefits – not less, thus putting more pressure on GM’s margins. In addition, auto prices continue to climb and consumers now have $1 trillion worth of auto debt, which is much higher than where it was prior to the Great Recession. Furthermore, these price increases have given rise to the 6,7, 8, and wait for it…possibly a 9 year auto loan! This isn’t because consumers can afford the vehicle – they clearly can’t if they’re taking loans of this duration. However, they can “afford” the payment and that’s all that matters to the debt hungry Americans who just has to keep up with the “Jones’.” Not realizing that the Jones’ can’t keep up with the Jones’. Every facet of this economy is saturated with debt and central banks the world over are pushing on a string when it comes to monetary policy. Diminishing marginal returns have kicked in and what was once used as “stimulus” will likely turn into one of the largest economic miscalculations in history. Stay diversified, stay vigilant, and stay with The Kapital News. #Recession #Autos #Economy #EndTheFed #Debt #Politics