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b"666 Point Drop
\\nToday the Dow finished off its worse week in 2 years with a 666 point drop.\\xa0 That is the third largest point drop in the history of the Dow.\\xa0 The last big drop that was larger happened during the 2008 financial crisis.\\xa0 Percentage-wise, though the 666-point drop today is only 2.5% so it's really not that big, as a historic decline.
\\n3% Drop from All-Time Record High
\\nIt's large in a sense that we haven't had a one-day 2.5% decline in the Dow in quite some time.\\xa0 In fact, I'm not even sure when we last had a 3% correction. Now, that's what we had. the dow is now 3% below the all-time record high that it hit last week.\\xa0 Now, a 3% correction is pretty normal, except we haven't had one in a long time.
\\nIs this Ominous?
\\nThe question is:\\xa0 is this the something of something more ominous or is this just a small correction? I think there's a lot of evidence that this is the start of something much bigger.\\xa0 Part of the evidence is that nobody is concerned!\\xa0 There's maximum complacency.\\xa0 Even the superstitious aren't concerned that the Dow fell exactly 666 points.\\xa0 People are so complacent that they're not even being superstitious.
\\n1987 All Over Again
\\nCasting that aside, think about this: 1987 was the year that we had a stock market crash. January was the best month for the U.S. stock market since 1987.\\xa0 The dollar just had its weakest January since 1987.\\xa0 So far, this year seems to have a lot in common with 1987.\\xa0 We know what happened in 1987: Black Monday.\\xa0 That didn't happen until October, but maybe this year it will come early.\\xa0 Maybe, next Monday. Now, obviously, the probability is not that we will have a crash on Monday, but it is a possibility.\\xa0 I would say the possibility is much higher than it has ever been, because of where we are, and what's going on.
\\nRates are Going Up
\\nAlso, the NASDAQ and the S&P were not down quite as much as the Dow, but they were both down about 2%.\\xa0 The catalyst for the sell-off was the continuation of the increase in long-term interest rates.\\xa0 The yield on the 10-year bond rose to 2.854%.\\xa0 That is the highest yield of the day, so bonds closed on the low of the day.\\xa0 On the 30-year bond, we closed at 30.97. There, the high of the day was 30.99 - almost 3.1%.\\xa0 I have been talking about this on this podcast - rates are going up, and they are going much, much higher.\\xa0 If you look at these charts, we've got a lot of air between where we are right now and the normal resistance.
\\nBudget Deficits Going Up and Trade Deficits Going Up
\\nTherein lies the complacency.\\xa0 Nobody is worried about the rise in interest rates.\\xa0 Nobody is thinking about 1987.\\xa0 It was rising interest rates that ultimately pricked that bubble. But why did rates rise? Because the budget deficits were going up and the trade deficits were going up.\\xa0 That's exactly what is happening now!\\xa0 Except they are bigger budget deficits and bigger trade deficits.\\xa0 And this is happening at a time when the United States is broke.\\xa0 Our massive debt is far greater than the one we had in 1987.
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