US ECONOMY: COULD RECORD US DEFICIT TRIGGER THE NEXT RECESSION: ? "As U.S. trade gap widens to unimaginable hights."

The U.S. trade deficit rose to a seven-month high in September as imports surged to a record high amid strong domestic demand, offsetting a rebound in exports.

The Commerce Department said on Friday the trade gap increased 1.3 percent to $54.0 billion, widening for a fourth straight month. Data for August was revised to show the trade deficit rising to $53.3 billion instead of the previously reported $53.2 billion.

Could the US Economy collapse?

But here's the bigger question that retail investors and Wall Street are currently asking: Is the current stock market correction over? Given the many headwinds facing stocks and the U.S. and/or global economy, the answer may not be what investors want to hear.

Here are 25 reasons and/or scenarios that could cause the stock market to head substantially lower than where it's currently valued.

1. The ongoing trade war with China escalates, raising material costs, curbing consumer spending, and hurting corporate profits.
2. Corporate share buybacks fail to boost per-share profits as much as expected.
3. Democrats win one or both houses of Congress, hurting the chance of Republicans to pass further fiscal stimulus legislation.
4. The federal budget deficit continues to soar, placing added emphasis on our growing national debt, currently at more than $21 trillion.
5. The U.S. dollar keeps strengthening, placing pressure on exports and worsening the U.S. trade deficit with foreign countries.
6. FANG stocks – that's Facebook, Amazon.com, Netflix, and Google (now Alphabet) -- continue to draw the ire of short-sellers.
7. The Federal Reserve gets overly aggressive with interest rate hikes, sapping lending demand.
8. The yield curve flattens, reducing the desire of banks to lend money.
9. Interest rates rise, providing incentive for investors to ditch volatile equities for the safety of bonds and bank CDs.
10. Britain falls into a "hard Brexit." With few or no trade deals in place, the U.K. falls into recession, taking the U.S. and other developed countries with it.
11. China's economy experiences its slowest growth in decades, placing pressure on its ability to import from the U.S. and other key players.
12. The U.S. housing market shows signs of weakening, with important markets like California seeing a steep drop-off in new home sales.
13. Credit-card delinquencies begin to trickle higher, demonstrating the inability of consumers to meet their payment obligations.
14. The subprime auto loan market bubble bursts.
15. The U.S. goes to war, regardless of the reason or the country in question.
16. An errant tweet from President Trump stirs Wall Street and investors.
17. A flash crash caused by computer algorithms results in substantially reduced liquidity and perpetuates a rapid move lower in the stock market.
18. Investor emotions (especially those of day traders) get out of hand and send traders running for the exit.
19. The unemployment rate, which is at a 49-year low, begins to rise, signaling peak employment and the possibility of a weakening economy.
20. Disruption in important oil-producing countries causes crude prices to skyrocket or plunge. Either way, it could create sticker shock or job losses and adversely impact the U.S. economy.
21. U.S. GDP data shows slowing growth, which, in turn, cools investor expectations for stocks, sending them lower.
22. Inflation comes in far lower than expected, signaling that businesses have little pricing power. The prospect of deflation could wreak havoc on corporate earnings, causing the market to fall.
23. The U.S. debt ceiling is hit (yet again), but the political divide in Congress becomes too great for lawmakers to overcome, allowing the shutdown to perpetuate for months.
24. European debt crisis 2.0 hits, with countries like Italy unable to dig their way out of years of loose borrowing.
25. A widely followed pundit, such as Warren Buffett, sounds the cry of the stock market being overvalued.

In other words, there is no shortage of reasons the stock market could tumble from its recent all-time highs.

Bottom-line, however -it does not look good for the US Economy as the deficit is coming close to a trillion US dollars.Impossible to pay it back, unless by slashing government spending, and increasing taxes.

Unlike the trillion dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits that will soon reach and exceed $1 trillion are permanent and will only get worse in the years ahead.

The Trump deficits are the result of changes in federal spending and revenue that will continue to be in place until some president and Congress decide to reverse them, that is, to increase taxes and make cuts to popular programs.

EU-Digest

Britain: First, the Brexit. Now the United Kingdom is falling apart - by Ben Wellings

Britain: Playtime is over

Britain’s decision to leave the EU is a major moment in post-War European history. This is like the collapse of communism, but with the West on the losing side. It is the first defeat for the British Establishment for centuries.

It is hard to believe in the wash-up of the referendum campaign but this was meant to be cathartic. It was supposed to heal divisions within the Conservatives by giving the people of the United Kingdom a say on membership of the European Union. But it has only entrenched and exacerbated divisions rather than healed them.

Referendums are not compulsory in the UK. Any decision to hold one is essentially political. Usually, you only initiate referendums that you are certain to win; Brexit has altered the rulebook.

What was proposed as a catharsis has induced trauma: trauma that the process and politics of Brexit will do little to repair. The referendum campaign laid bare deep divisions within the United Kingdom.

Other divisions were evident: between young and old; city and country; men and women. The biggest division that this exposed was between the so-called ‘winners’ and ‘losers’ of globalization and European integration: those who have done well out of these political structures and those who have not.

The disbelief amongst the ‘winners’ that Brexit might have been a realistic and attractive prospect was matched amongst the ‘losers’ by anger directed at the prosperous and secure classes.

 Perhaps the most pernicious division was between politicians and people. The murder of Jo Cox was not only a horrific attack on an individual striving for what she saw as the good society. It was an attack on democracy. Her example showed that not all politicians are remote fat cats in thrall to big business. Politicians still hail from the deprived areas in which they grew up, lived and worked.

Of course, direct blame cannot be laid at the door of the Brexit campaign. But in adopting UKIP’s anti-immigration language, Vote Leave’s leaders subordinated some principled critiques of the EU’s failings to a xenophobic politics of fear.

The referendum campaign deepened existing divisions within the Conservatives, from which they may not recover for years. Cameron’s position is surely untenable. BoJo is waiting in the wings.

The Labour Party under Corbyn was missing in action during this campaign, hoping that the Conservatives would hang themselves whilst Labour’s own internal divisions were overlooked. Many former Labour voters opted to leave and the party must answer questions about how its successive leaderships became so divorced from grassroots opinion.

The main beneficiary of Breixt is UKIP. Its message dominated the last three weeks of the campaign and will shape discussion about national identity, inclusiveness and tolerance in England for years to come. There are calls for it to disband having achieved its central aim. But the wind is in the sails of HMS UKIP and we should expect it to change into an established right populist party, ironically making British politics look much more ‘European’ at the very moment when it left.

The term ‘England’ is used advisedly since this was in many ways an English revolt. Outside of London it was rural England and, admittedly, Wales that dragged the UK out. Whether Scotland will abide this remains to be seen. Northern Ireland’s situation is similarity unsure.

There will always be an England; whether there will always be a United Kingdom remains far from clear.

For the first time in history the process of European integration has been reversed. The idea that Brexit will represent ‘the end of western political civilization’ as Donald Tusk claimed may have been alarmist. But Brexit is part of a wider revolt against the established political order whereby the ‘losers’ in the globalized economy are given voice by rich tribunes, be they Old Etonians, City stockbrokers or New York property magnates. This is their first major victory.

Brexit is the product of a revolt against the way that people have been governed in the past thirty years. This was its sole unifying function. It united left and right against the political ‘elite’, ushering in the first defeat for the British Establishment since the loss of the American colonies.

It is hard to be optimistic about this referendum and the politics that it unleashed. The Scottish independence referendum in 2014 was seen as a laudable exercise in democracy. In contrast the Brexit referendum revealed an angry and ugly streak in political life, especially in England.

The United Kingdom is a divided country. It may have won its independence or have made a catastrophic error, depending on your point of view. The fact that it took a xenophobic campaign to achieve this result is nothing to be proud of.

This foundational moment will be tainted with shame for decades to come.

Read more: First, the Brexit. Now the United Kingdom is falling apart - The Globe and Mail