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What The Heck Just Happened?!?

Prepare for more bruising days ahead in the markets
Monday, August 24, 2015, 11:37 PM

Okay... time to take a deep breath.

Today was an historic market day.  First for the computer driven plunge that was seemingly unstoppable, and then for the heroic rescue that at one point brought the whole mess back to green (Nasdaq) or close to it (S&P and Dow). » Read more


Prepare Now!

Defensive, prudent actions to take today
Friday, August 21, 2015, 9:09 PM

Executive Summary

  • The 8 defensive actions I've taken in the past 6 weeks
  • The 2 lists you should have prepared in case things unravel from here
  • How to hedge against a market correction
  • In terms of preparations, it's much better to be a month or two early than a day late

If you have not yet read Part 1: Making Sense Of The Sudden Market Plunge available free to all readers, please click here to read it first.

Nothing forces us to know
What we do not want to know
Except pain.

~  Aeschylus

My personal standard of issuing an Alert is that I have to come across a piece of information that causes me to personally take some sort of action.  While I don’t have any particular piece of news – rather I have the assortment of data points listed in Part 1 of this report plus some that did not make it in – I am finding myself increasing my personal preparations. 

I am being extra cautious these days, weary of sending out yet another report to ‘be cautious, and prepared’ only to have the “”markets”” rocket back up  a few days later for no reason and on no news.

Further, I take no joy in... » Read more


Markus Gann/Shutterstock

Mauldin Makes A Very Basic Error on Shale Oil

Beware 'analysis' based more on faith than facts
Monday, August 17, 2015, 2:58 PM

There’s really nothing much more important than knowing where we are in the oil story…but if you follow the hypesters from Wall Street or the technology lovers, you're likely to be misled.  A particularly wrong piece of analysis was recently released by John Mauldin, who has both bought into the hype and loves technology.

He even singled out our friend James Howard Kunstler for being wrong, yet then goes on to be spectacularly wrong himself. » Read more



Off The Cuff: Currency Turmoil

China is the latest to enter the currency wars
Thursday, August 13, 2015, 11:17 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • Currency Turmoil
    • What a yuan devaluation means
  • China's Credit Crisis
    • Why the growth of the past decade is over
  • Deflation Everywhere
    • The whole world economy is slowing
  • Lower prices ahead!
    • "All that's missing is a stock market crash"


Why China Is Extremely Vulnerable Now

The majority of household wealth is at risk of vaporizing
Friday, August 7, 2015, 11:36 AM

Executive Summary

  • Too much of China's wealth is tied up in housing
  • The Obvious Risk: Declines in demand will crush prices
  • The Less Obvious Risk: housing in China is very illiquid
  • China's extraordinary vulnerability

If you have not yet read Part 1: Is China’s “Black Box” Economy About to Come Apart? available free to all readers, please click here to read it first.

In Part 1, we looked at the factors that render China’s economy a black box: the inputs and outputs are visible, but the internal workings are often opaque. Though there is an abundance of data on China’s housing market, it too is opaque in critical ways.

Let’s dig into what makes China’s housing bubble so risky.

Chinese Household Wealth Is Mostly In Housing

The percentage of household assets in real estate varies from source to source, but however it’s sliced, China’s household wealth is extraordinarily concentrated in housing.

This means any reduction in housing values will have an outsized impact on household wealth and the perception of wealth, i.e. the wealth effect: people who own assets that are rising feel wealthier and tend to spend more freely as a result. Those with assets that are declining in value tend to feel poorer, even if their day-to-day life in unaffected by the drop in wealth. This is the negative wealth effect.

While middle-class households’ wealth is in their primary residence, upper-middle class households tend to put the family wealth in additional homes as investment properties. Anecdotally, it is not uncommon for middle-aged people with secure employment to own three flats: one for their residence and two as nest eggs. The practice of buying third homes was subject to restrictions a few years ago, but the resulting drop in housing demand scared authorities into... » Read more


Konstantin Kolosov/Shutterstock

That Roaring Sound You Hear…

Markets are shouting deflation
Monday, August 3, 2015, 8:05 PM

Ok folks, the deflation we’ve been tracking is gathering steam. We're now seeing new signs on a daily basis. » Read more


DonkeyHotey/flickr Creative Commons

Off The Cuff: The Fault-Ridden Fed

Worrying about all the wrong things
Thursday, July 30, 2015, 5:25 PM

In this week's Off The Cuff podcast, Chris and Mike "Mish" Shedlock discuss:

  • The Fed's Faulty Fears
    • The people running it are concerned about the wrong things
  • Are We At A Market Top?
    • Hard to call it, but it sure feel so
  • Europe's Woes Are Worsening
    • Capital is fleeing, while debts grow
  • Our ""Markets"
    • Nobody but central banks and bots buying these days

Filip Bjorkman/Shutterstock

The China Syndrome – In Reverse

The start of a meltdown that might gut the world?
Monday, July 27, 2015, 8:52 PM

The China Syndrome is alive and well. In todays' world, it just has more to do with nuclear levels of margin debt, not runaway radioactive decay.

If China really gets into worse shape, we’ll see them panic and do everything from weakening their currency to support trade (which will export deflation via prices of manufactured goods), to imposing capital controls, to selling US Treasury bonds to pay for the rescue efforts.


Wikimedia Commons

Assume The Crash Position

What this means for gold, oil, copper & real forms of wealth
Friday, July 24, 2015, 10:03 AM

Executive Summary

  • The entire commodity complex is breaking down
  • What to expect next
  • What will happen with gold
  • What all this means for the future

If you have not yet read Part 1: Deflation Is Winning – Beware! available free to all readers, please click here to read it first.

Commodity Bust


'Dr. Copper' is so named for the metal's uncanny ability to both diagnose current economic activity and deliver a prognosis on future activity. Right now, it's saying the patient is very sick and not likely to recover any time soon:

Copper has just broken through key support (in dotted circles) and looks like it could fall further. Notice the behavior of copper in 2008/09 and you’ll see that paying attention to copper is a good idea.


Oil has obviously fallen by a lot, with WTIC crude well under $50 again today, signaling ...  » Read more


Off The Cuff: Why Commodities Are Getting Crushed

Reports of econonic growth are 'fluffed-up fakery'
Thursday, July 23, 2015, 7:17 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • The Commodity Beat-Down
    • Why are gold, oil, etc so weak?
  • Fluffed-Up Fakery
    • Official economic reports are just pure fiction these days
  • The End Of The Long Cycle
    • The devastation when this bubble pops will be epic
  • Stock market roll-over?
    • It's increasingly looking like we'll finally see a material correction

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more