We have seen this story before, and it never ends well.  From mid-March until early May 2008, a vigorous stock market rally convinced many investors that the market turmoil of late 2007 and early 2008 was over and that happy days were ahead for the U.S. economy.  But of course we all know what happened.  It turned out that the market downturns of late 2007 and early 2008 were just “foreshocks” of a much greater crash in late 2008.  The market surge in the spring of 2008 was just a mirage, and it masked rapidly declining economic fundamentals. 

Well, the exact same thing is happening right now. The Dow rose another 222 points on Tuesday, but meanwhile virtually every number that we are getting is just screaming that the overall U.S. economy is steadily falling apart.  So don’t be fooled by a rising stock market.  Just like in the spring of 2008, all of the signs are pointing to an avalanche of bad economic news in the months ahead.  The following are 11 signs that the U.S. economy is rapidly deteriorating…

#1 Total business sales have been declining for nearly two years, and they are now about 15 percent lower than they were in late 2014.

#2 The inventory to sales ratio is now back to near where it was during the depths of the last recession. This means that there is lots and lots of unsold stuff just sitting around out there, and that is a sign of a very unhealthy economy.

#3 Corporate earnings have declined for four consecutive quarters. This never happens outside of a recession.

#4 Profits for companies listed on the S&P 500 were down 7.1 percent during the first quarter of 2016 when compared to the same time period a year ago.

#5 In April, commercial bankruptcies were up four consecutive quarters on a year over year basis, and Chapter 11 filings were up four consecutive quarters on a year over year basis.  This is exactly the kind of spike that we witnessed during the initial stages of the last major financial crisis as well.

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