The financial storm clouds are gathering, and no, I’m not talking about impeachment or the Fed and repo troubles–I’m talking about much more serious structural issues, issues that cannot possibly be fixed within the existing financial system. Read More.
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Category: Bear Market News
09/23/19 – Suzanne Woolley: The World’s Wealthiest Families Are Stockpiling Cash as Recession Fears Grow
Rick Stone, a former partner at Cadwalader, Wickersham & Taft, sees treacherous times ahead for family offices trying to deploy cash. The head of Stone Family Office said he doubts the bond market will provide any real return over the next decade, that equity markets will suffer a substantial drop and then be flat, and that too much venture capital and private equity money will continue to chase too few opportunities. Read More.
09/23/19 – Alexander Saeedy: Why the Repo Market Is Such a Big Deal—and Why Its $400 Billion Bailout Is So Unnerving
One of the most vital pieces of plumbing that powers the global financial system usually runs so smoothly that it gets overlooked by market watchers. It’s the “repo market,” comprising the short-term funding that banks and financial counter-parties regularly tap to lend each other trillions. Read More.
A couple of years ago, I wrote an article discussing the disconnect between the markets and the economy. At that time, the Fed was early into their rate hiking campaign. Talks of tax cuts from a newly elected President filled headlines, corporate earnings were growing, and there was a slew of fiscal stimulus from the Government to deal with the effects of 3-major hurricanes and 2-devastating wildfires. Now, the Fed is cutting rates, so it is time to revisit that analysis. Read More.
09/22/19 – Tyler Durden: ‘Vaguely Troubling’: BIS Warns Of Financial Disaster Amid $17 Trillion In Negative-Yield
When the central bank for central banks publishes its quarterly review, the world should take note. Claudio Borio, Head of the Monetary and Economic Department at the BIS, published the BIS Quarterly Review, September 2019 on Sunday, revealing how the increasing acceptance of negative interest rates has reached “vaguely troubling” levels. Read More.
The relentless drive into defensive stocks is a logical way to cope for investors beset all year by signs a recession is at hand. It’s also a tough way to set a fresh stock record. Read More.
Financial markets experience loss cycles of more than 20% routinely, but it’s not inevitable that individuals do the same. Effective financial management has rule sets to help anticipate down cycles and positions to benefit from them. Most participants have no plan or strategy to do so, however, because mainstream theories, products and approaches are long-only. And yet, avoiding losses and buying assets cheap are the most defining imperatives of investment results over an individual’s life cycle. Read More.
The German economy contracted in September, latest flash PMI data showed, as the downturn in manufacturing deepened and service sector growth lost momentum. Job creation meanwhile stalled as firms reported weakening demand and pessimism towards the outlook for activity.Read More.
(Bloomberg) — Nobody knew it then, but this time last year, the rallying U.S. stock market was about to begin a plunge that would erase $5 trillion from share values and convince a lot of people a recession was at hand. Then, as now, a trade war was raging, earnings in doubt and manufacturing losing steam. In the stock market, swings were getting violent — even as the S&P 500 was pulling itself over 2,900 and flirting with an all-time high. Fast-forward to today, and the picture bears an eerie similarity. Read More.
The implicit narrative of the latest rally in stocks is that this is just another normal rally in the ongoing 10-year long Bull market. Nice, but do these three charts look “normal” to you? Let’s take a quick glance at a daily chart of the S&P 500 (SPX), a weekly chart of TLT, the exchange-traded fund of the US Treasury 20-year bond, and silver. Read More.
The last few weeks marked a turning point in the global economy. It’s more than the trade war. A sense of vulnerability is replacing the previous confidence—and with good reason. We are vulnerable, and we’ll be lucky to get through the 2020s without major damage. Read More.
09/04/19 – Fred Imbert: Alan Greenspan says it’s ‘only a matter of time’ before negative rates spread to the US
“You’re seeing it pretty much throughout the world. It’s only a matter of time before it’s more in the United States,” Alan Greenspan says. Read More.
09/04/19 – Tyler Durden: “Big Short” Investor Michael Burry Explains How Index Funds Will Trigger The Next
After years of radio silence, Dr. Michael Burry – the small-time stockpicker who rose to fame for his bets against subprime mortgage bonds featured in the book (and later film) “the Big Short” – is once again doing the media rounds, talking about his latest equity plays and sharing his thoughts about the next big market blowups. Read More.
09/03/19 – Tyler Durden The Last Time SocGen’s Newsflow Indicator Was Here, The Market Was About To Crash
With the drumbeat of a looming recession growing louder by the day – whether due to ongoing trade war or the late-cycle slowdown which finally pushed the all-important US mfg ISM into contraction today – and prompting banks such as UBS to drastically slash their GDP forecast to a whisker above recession in H1 2020, it’s just a matter of time before the chorus turns universally pessimistic. Read More.
Since the end of the last recession, the outlook for the U.S. economy has never been as dire as it is right now. Everywhere you look, economic red flags are popping up, and the mainstream media is suddenly full of stories about “the coming recession”. After several years of relative economic stability, things appear to be changing dramatically for the U.S. economy and the global economy as a whole. Read More.
On Tuesday September 3, 2019, former Texas congressman Ron Paul appeared on an episode of the Quoth the Raven podcast to weigh in on the state of equity markets and the media’s role in indoctrinating the masses with Keynesian theory. Read More/
Former Federal Reserve Chairman Alan Greenspan recently said he wouldn’t be surprised if yields on U.S. bonds turned negative and if they do, it wouldn’t be “that big a of a deal.” That seems to be a sentiment widely held in central banking circles these days, but it’s wrong. Negative interest rates represent a threat to the financial system. Read More.
Is the prospect of looming global recession merely an economic matter, to be discussed within the framework of the Great Financial Crisis of 2008 – which is to say, whether or not, the Central Bankers have wasted their available tools to manage it? Or, is there a wider pattern of geo-political markers that may be deduced ahead of its arrival? Read More.
Data is coming at investors from every angle with so-called recession indicators flashing signs of an economic slowdown brought on by slower growth abroad and the U.S.-China trade war. Read More.
Lipper’s Emerging Markets Funds peer group (including both mutual funds and ETFs) experienced net outflows of $1.1 billion for the fund-flows trading week ended Wednesday, August 28. This negative net flow marked the tenth net outflow in the last eleven weeks for the peer group during which over $11.8 billion has left the group’s coffers. Read More.
09/01/19 – Michael Snyder: If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
A new study has discovered that we are far more dependent on America’s great debt creation machine than most of us would have ever dared to imagine. Today, debt is involved in most of our major transactions. In order to purchase a home, most of us go into debt. The same thing is true when most of us buy a vehicle. Total credit card debt is well over a trillion dollars, and total student loan debt is now over a trillion and a half dollars.Read More.
Over the past few decades, the central banks, including the Federal Reserve (Fed), have relied increasingly on interest rates to help modify economic growth. Interest rate management is their tool of choice because it can be effective and because central banks regulate the supply of money, which directly effects the cost to borrow it. Lower interest rates incentivize borrowers to take on debt and consume while dis-incentivizing savings. Read More.
For plutocrats, this summer has gotten a bit scary. Two feared candidates are rising. Trusted candidates are underperforming. The 2020 presidential election could turn out to be a real-life horror movie: A Nightmare on Wall Street. Read More.