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Tverkhovinets |

Here We Go?

Interest rates on the move
Friday, December 27, 2013, 1:11 PM

The Achilles heel of every over-leveraged sector but especially the sovereign sector is interest rates.  Specifically, high interest rates. » Read more


Off the Cuff: Ben Bernanke's Departing Taper "Lite" Surprise

Markets loved the news
Thursday, December 19, 2013, 12:43 AM

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

  • The Fed's Taper "Lite" Surprise
    • $10 billion less per month going forward
  • Social Instability Due to Growing Wealth Gap
    • The pitchforks are being sharpened
  • Un-representative Democracy
    • Our leaders no longer work in our interests
  • Beating Cancer
    • Mish' happy health news

Off the Cuff: Self-Mastery

A cool head through coming change will be invaluable
Thursday, December 12, 2013, 11:12 AM

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

  • The Case for a Coming Crash
    • One that could erase the gains of the past 2 decades
  • Focus on Resilience, Not Money
    • Don't define yourself by your portfolio size
  • Post-Crash Investments
    • What to buy once the world is 'on sale'
  • Emotional Mastery
    • A critically important success requirement


The Case for Cash

The wisdom of storing up 'dry powder' today
Tuesday, December 10, 2013, 4:23 PM

Executive Summary

  • Why the next stock market decline could be in excess of 50%
  • What historic indicators of coming decline are telling us
  • The case for holding cash now
  • If the market does roll over substantially in early 2014, how long may the decline last?

If you have not yet read The Case for a Crash, available free to all readers, please click here to read it first.

In Part I, we attempted to answer the question, Which forecast is more likely to be accurate: that the Bull market in stocks will continue for years to come, or the market will swan-dive in yet another multi-year crash?

We concluded that there was little historical evidence to support the claim that the S&P 500 will extend higher for an additional three to five years.

Here in Part II, we’ll look for clues about the possible amplitude and timing of the decline that the five-year cycle of the “new normal” suggests is likely.

(A reminder on gold: I detailed a forecast on gold earlier this year based on price action around key support/resistance levels, and nothing in recent price action has caused me to amend that forecast.  I have also noted that gold does not correlate well with either stocks or the U.S. dollar; i.e., its dynamics are largely independent of stocks and the USD. To the degree that gold is viewed as a “risk-off” safe-haven asset, it should do well if “risk-on” assets such as stocks crater.)

Forecasting the Amplitude of the Next Decline

A number of technical analysts have noted this megaphone pattern in the stock market, a pattern formed by alternating higher highs and lower lows.  This is one basis of forecasts for the SPX to drop to the 500-600 level in the next downdraft, potentially retracing the entire Bull advance from 1995. 

While this megaphone may not play out, it establishes a potential target for a crushing drop from current highs... » Read more


Ljupco Smokovski/Shutterstock

Anything Goes, Inc.

A better name for what America has become?
Monday, December 9, 2013, 1:46 PM

It turns out that corporations are like people.  When they feel threatened, they'll do anything to get back at their perceived nemeses. The instinct to survive can bring out the worst in people and, it seems, corporations, too. » Read more



The Very Real Danger of a Failure in the Gold Market

And why it's increasingly likely to happen
Friday, December 6, 2013, 1:52 AM

Executive Summary

  • Central planning are colluding but failing to diminish world demand for bullion
  • The BRICS are planning a future of less dependence on the West, and gold will play a role
  • The East sees gold as "on sale" at today's prices
  • Analysis shows they're right; gold is much cheaper than it should be compared to pre-QE levels

If you have not yet read There Is Too Little Gold in the West, available free to all readers, please click here to read it first.

In Part I, I went through the history of Asian demand for gold, starting with the Arabs’ need to find a home for increasing quantities of petrodollars from the late 1960s onwards. My conclusion was that there is very little bullion in private ownership left in the West, there is an unmanageable short position in the unallocated gold accounts held with the bullion banks, and the bulk of accessible monetary gold controlled by central banks is already leased and has been sold into the market to satisfy Asian demand.

The result is that merely suppressing the gold price to enhance credibility of the dollar as a reserve currency is no longer the problem. The problem is now one of crisis management. Western central banks have done everything they can, even persuading the Reserve Bank of India to suppress India’s gold imports. We know this is most probably the case because the Indian authorities have already learned the lesson that gold imports could not be controlled, which is why the Gold Control Act was abolished in 1990. Furthermore, the newly-appointed RBI Governor, Raghuram Rajan is an ex-IMF chief economist, has spent a significant part of his career in the U.S., and is therefore likely to be fully sympathetic with Western central bank objectives. He appears to be the West’s place-man.

Other than the question of Indian demand, there are two possible reasons for the flows of gold from West to East: geo-political, whereby one or more Asian nations are deliberately creating a potential crisis for the West, and different valuation criteria. Both are true and... » Read more



Off the Cuff: Vacuum of Leadership

Where have all the Churchills gone?
Thursday, December 5, 2013, 3:21 AM

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

  • Raising taxes until morale improves
    • Europe's misguided approach to its woes
  • Tough medicine for underfunded pensions
    • Detroit bankruptcy may be a key precedent
  • Manipulation & fraud
    • Two things the TBTF banks get away with
  • Vacuum of leadership
    • A defining crisis of our time

Jfunk |

None of This Makes Any Sense

The asset bubble has become 'Too Big to Burst'
Monday, December 2, 2013, 1:33 PM

I have to confess, these are trying times for those of us trying to make sense of the markets from a fundamentals standpoint.  We are back in serious bubble territory, and during the heights of bubbles, all sorts of newly-minted rationalizations are bandied about as the new wisdom or a 'new normal'.

I am simply amazed that we are in yet another massive bubble, so soon after the last ones, and that so few remember the lessons from those events. » Read more



Off the Cuff: Look Locally for Reasons to Hope

That's where productive change is happening
Thursday, November 28, 2013, 3:22 PM

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

  • Unjust Wealth Inequality
    • Growing by money printing vs productive output
  • The Evils of Reflationary Policy
    • Stealing from the many to reward the few
  • Our Low-Growth Future
    • Less to go around
  • Local Solutions
    • Where hope lies


A Better Human Habitat for the Next Economy

How to build for prosperity
Monday, November 25, 2013, 8:10 PM

Executive Summary

  • 'Smaller' will be the major theme in future development
  • The general principles for resilient human settlement
  • How redesigning our towns & cities offers liberation from the soul-sucking models we live in today
  • What we can leverage from the New Urbanist movement

If you have not yet read (Un)Paving Our Way To Nirvana, available free to all readers, please click here to read it first.

Before I review some of the basic rules and principles for assembling a human habitat worth living in and with some prospects of enduring, a few words about demographic change. The failing suburbs will not drive everybody in them to move to the cities. The big cities of America face equal difficulties with resource and capital scarcity, failing infrastructure that won’t be replaced, and problems as yet off the radar screen such as water safety, public health, food shortages, and social turmoil. The big cities will have to get a lot smaller and that process will take decades to resolve.

I’m convinced that the action in this country will move to the existing smaller cities and small towns, especially places that have a meaningful relationship with food production because there ought to be no question that agri-business will fail, and with it the entire food production and distribution process as we currently know it. One implication of this is that we will restore a visible edge between what is urban and what is rural, and what these places are for. As that occurs people will redevelop an appreciation for the distinction. The human settlement will no longer endeavor to be a cartoon of the rural countryside. And rural places will be organized and inhabited differently.

Therefore, a first general principle is... » Read more