* The U.S. stock market finished up its worst week since August, when everybody though a rate hike was just around the corner

* Substantial triple-digit losses across the board

* The Dow Jones closed down 309 points - almost 4%

* Similar percentage decline for the S&P 500

* The NASDAQ dropped 111 points, over 4% decline for the week

* The media is blaming this decline on oil prices, and yes, oil prices are weighing on some stocks

* Some stocks benefit from lower oil prices - case in point: transportation

* Dow Transport was weaker than any other index - down more than the markets on a percentage basis

* The truth is that oil prices and stock prices are going down for the same reason

* The reason is a slower growing global economy, including the U.S. economy, and the fact that the Fed is threatening to slow it down further with an interest rate hike

* Some of biggest losers are not even in the stock market, but in the bond market

* The high-yield bond market is getting obliterated

* A chunk of the high yield market is energy companies

* Two things are hurting them: the fear of rising interest rates and the slowing of the U.S. economy

* We are heading for a recession, if we are not already in one

* This does not bode well for the high-yield bond market, because in a recession these companies will have more trouble servicing their debt

* The Fed's monetary policy of zero percent interest rates forced a lot of Americans into these high-yield bonds - people are hungry for yield

* A lot of risky companies who did not have access to credit, were able to borrow all sorts of money because of this hunger for yield

* This is the same thing that happened in the sub-prime market

* Customers all over the world needed yield, and the mortgage market was where they got it

* There was so much demand for mortgage debt on Wall Street it was easy for non-credit-worthy customers to get a loan

* The same thing is happening in this high-yield market. Carl Icahn was on CNBC on Friday morning, referring to the present situation as a "power keg"

* It is a powder keg that the Federal Reserve created and in theory they will light the match if they raise interest rates next week

* In fact in my last podcast I mentioned that for the first time, the Fed might actually raise rates, and I received quite a few comments asking me if I was ready to admit that I was wrong

* The Fed is trying to change the nature of a rate hike - alter the narrative away from normalization to a one-and-done scenario

* Markets anticipate future events and they price them in, so the beginning of the tightening - "liftoff" I felt markets would look toward the eventual destination and start pricing that in.

* None of the markets can handle that

* So the Fed assured the markets that liftoff didn't matter because the first hike will be small and the trajectory will be very low

* That's why I called it a trial balloon.  The Fed wanted to see how the markets would respond to a tiny, symbolic rate hike just to prove we can do it, and then a long period of time, before another one, if there is another one

* Initially it looked as if the markets was buying the idea, but remember I kept saying there is time, and the markets could decline - in fact that is already happening

* Maybe the Fed's trial balloon is not going to go over very well

* We had a "Black Monday" in August prior the potential September rate hike

* We have another Black Monday coming up - the technicals on the market look awful

* We could have a huge decline on Monday, and you'd better believe the stock market is going to be high on the Fed's agenda

* When the Fed called off the rate hike last time and we got a huge bounce in the stock market
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