Deflation Is Still Winning!

OK, folks: this is it
Monday, December 15, 2014, 8:20 PM

As we've written on and warned about before, deflation is winning.  We're starting to see very serious cracks in the façade, beginning with oil, then various peripheral currencies -- especially from emerging market oil exporters -- and now equities. » Read more


Blueximages | Dreamstime.com

Is This Decline The Real Deal?

Or just another head-fake bear trap?
Wednesday, August 6, 2014, 9:36 AM

Is this stock market decline the "real deal"? (that is, the start of a serious correction of 10% or more) Or is it just another garden-variety dip in the long-running Bull market? Let’s start by looking for extremes that tend to mark the tops in Bull markets. » Read more


Gunnar3000 | Dreamstime.com

The Time For Shorting the Market Is Approaching

The dashboard of warning signals is getting bright
Wednesday, February 26, 2014, 7:55 PM

Executive Summary

  • Why stocks may average 0% return (!) for the next decade
  • The depressing data in
    • Retail sales
    • Housing
    • Manufacturing
    • Consumer confidence
  • Why the time to short the market is looking near

If you have not yet read The Stock Market's Shaky Foundation, available free to all readers, please click here to read it first.

To be sure, there is one piece of fundamental information that has supported equity prices; and that’s corporate earnings.

Those have vaulted to new highs, despite the weak economic recovery, on the back of ultra-cheap borrowing (which reduces interest costs which are deducted from earnings), government deficit spending, and low household savings:

While the parabolic rise in corporate earnings is quite impressive, they are also historically unprecedented and certainly unsustainable. 

When we look at the same chart seen above but on a percent change yr/yr basis we see that they have been slowing down remarkably and aren't that far above the zero mark... » Read more


Teresa N. Fischer

The Stock Market's Shaky Foundation

Crumbling fundamentals in both the short term & long
Wednesday, February 26, 2014, 7:21 PM

According to the stock markets in the US and in Europe, the world’s economy is not just in good shape, but is in the best shape it’s ever been

The S&P 500 hit an intraday new record high of 1858.71 on Feb 24, 2014, and is now 18.6% above the peak it hit in 2007, a moment everybody now recognizes was heavily overvalued.

A nearly 19% gain above the prior all time high is an enormous and unusual event.  Surely there must be an equally compelling story and loads of fundamental data to support such a bull market? » Read more


Off the Cuff: Things Are Getting Interesting Again

The summer sameness is over
Thursday, August 15, 2013, 12:11 PM

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • Rising Interest Rates
    • The big game-changer
  • To Taper or Not?
    • Hard to see the Fed delivering on the threat
  • Gold
    • Finally looking brighter again
  • The Markets
    • Be very, very concerned

The Dead Weight of Sluggish Global Growth

Weighing heavier each year
Tuesday, July 9, 2013, 12:04 PM

Global Slowdown

The U.S. economy weakened appreciably in the first quarter of 2013. But what if this weakness persists into the second quarter just completed, and worsens still in the second half of this year? Q1 GDP, as reported on June 26th, was revised lower to just 1.8%. And various indications suggest that Q2 could come in slightly lower still, at 1.6%. Might the U.S. economy be guiding to a long-term GDP of 1.5%? That’s the rate identified by such observers as Jeremy Grantham the rate at which we combine aging demographics, lower fertility rates, high resource costs, and the burdensome legacy of debt. Well, after a four-year reflationary rally in just about everything, and now with an interest-rate shock, the second half of 2013 appears to have more downside rather than upside risk. Have global stock markets started to discount this possibility? » Read more


Four Signs That We're Back in Dangerous Bubble Territory

Stocks, bonds – everything – at risk
Tuesday, May 21, 2013, 6:09 PM

As the global equity and bond markets grind ever higher, abundant signs exist that we are once again living through an asset bubble or rather a whole series of bubbles in a variety of markets. This makes this period quite interesting, but also quite dangerous.

With equity and bond markets at or near all-time record highs, with all financial assets consistently shrugging off bad or worse news as the riskiest of assets continue to find consistent upward bids, we find ourselves in familiar and bubbly territory. » Read more


When Will Reality Intrude?

When will the market hit bottom?
Thursday, June 21, 2012, 8:57 PM

If we pursue the line of inquiry established by Chris Martenson’s recent call to Buckle Up -- Market Breakdown in Progress, we come to these basic questions: When will the market reflect the fundamental weakness of the global economy? And when will the market finally hit bottom? » Read more