Insider

Insider

Dreamstime

The Case For Starting To Build A (Small) Short Position

Why I just took on a new short trade in my portfolio
Tuesday, July 10, 2018, 3:01 PM

So, we're in the midst of (yet) another rally in the markets. But this one feels different...

For those sitting on large cash positions, it's increasingly looking like the long-overdue and long-awaiting end to the secular bull market may indeed arrive this year.

There is NOTHING wrong with remaining 100% in cash and simply letting your cash appreciate realtive to stocks/bonds/etc when the correction hits.

But, if you want to have some upside exposure to the correction, now is a good time to consider how much of your portfolio to allocate to that strategy. And what to put it in. And to start putting small positions in place.

Technically, it continues to look like something broke at the start of 2018. The ruler-straight run-up in the major stock indeces seen over the past decade suddenly stopped as the year began. Since then, we've seen more price volatility than in the past several years combined.

And despite the most recent price action, both the Dow and the S&P 500 remain below their all-time-highs set in early January. And while the NADAQ is now higher, there are many reasons to be concerened about its ability to rise much further -- a rationale I'll lay out shortly below.

Technical Red Flags

This latest rally is rising two important red flags.

The first is volume-related. This most recent rally has occured on exceptionally low volume, near the lowest levels seen over the past year.

This indicates that the optimism represented by today's buyers is not widespread across market participants (i.e., there's not a horde of buyers eager to keep pushing prices higher). This hints that the rally may soon run out of steam.

Low volume driving a rising market also suggests fewer buyers willing to step in to defend today's price levels if they start falling.

The second warning sign is that we're seeing Rising Wedge formations appearing in the major equity indices as we see in this chart... » Read more

Insider

Off The Cuff: Yes, The Central Banks Really Are Starting To Tighten

Expect EVERYTHING you know about the markets to change
Tuesday, July 10, 2018, 10:40 AM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Tesla As A Symbol Of Silicon Valley
    • Way more hype than substance right now
  • Are Central Banks Really Starting To Tighten?
    • It's looking like indeed so
  • How The Rising Dollar Is Killing Emerging Markets
    • It's just math. Really cruel math.
  • Popping Of The Global Housing Bubble?
    • Australia may be leading the way down

The Fed has reduced its balance sheet so far this year to the tune of $100 billion, and is hoping to be reducing at the rate of $50 billion per month by October. The ECB has announced it will stop making purchases by the end of the year. And, surpringly, even the profligate Bank of Japan is showing signs of reducing its balance sheet.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
Insider

Stepan Kapl/Shutterstock

How The Coming Oil Shock Will Impact Absolutely Everything

Price spikes, supply crunches, and recession everywhere
Friday, July 6, 2018, 7:44 PM

Executive Summary

  • The Inevitable Supply Crunch
  • Why The Central Planners Are Making This Worse
  • Why The US Shale Industry Will Implode (And Soon)
  • The Growing Geopolitical Risks To Oil Supply
  • The Shock Felt Round The World

If you have not yet read Part 1: Why The Coming Oil Crunch Will Shock The World available free to all readers, please click here to read it first.

As I’ve written extensively in the past, there are four entire years of missing upstream oil and gas investment (2014—2017) that will lead to an equivalent period of missing oil and gas supply sometime in the future. With the usual 5-7-year lag between discovery and production, my time frame for that was somewhere between the end of 2018 and 2022.

When -- not if -- that supply shock hits, there is no amount of fresh investment money that can rapidly bring new supply on line. Doing so just takes time -- measured in quarters or years:

As we enter into the second half of 2018, the supply/demand balance has already tipped into a slight deficit. I am clearly predicting that:

  1. this supply imbalance will only get worse, and that
  2. oil prices will have to rise to compensate.

The only development that could possibly prevent this from happening would be a rip-roaring recession, as only economic decline has proven to be able to reduce demand by as much as will needed to avoid this supply crunch.

As we can see from the below chart, the world has been... » Read more

Insider

barkingdogma.com

Off The Cuff: The Trouble With Trade Wars

The uncertainty whipsaws markets, media & investors alike
Thursday, June 28, 2018, 6:37 PM

In this week's Off The Cuff podcast, Chris and Axel Merk discuss:

  • The Trouble With Trade Wars
    • The uncertainty is whipsawing the markets
  • Actions Have Repercussions
    • China's investment in the US plummets
  • The Rules Of Brinksmanship
    • Chris & Axel give book recommendations
  • Oil & Gold
    • Where to from here?

It's hard to keep one's head in today's world. Developments are changing at a pace the world just can't handle. As a result, the uncertainty and confusion makes it very difficult to 'surf' events as they unfold.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
Insider

How To Engage Others

Especially when the audience is reluctant
Friday, June 22, 2018, 7:58 PM

Executive Summary

  • The power of narrative
  • Data vs Beliefs
  • Best practices for engaging reluctant audiences
  • Common pitfalls to be wary of

If you have not yet read Part 1: The End of Growth available free to all readers, please click here to read it first.

Talking to people about the ways in which we are killing off life on Earth is not easy.

Better people than I have thrown themselves at it and failed. James Hanson recently got to reflect on his 30-year attempt to use data to persuade governments and the public that climate change is real and dangerous. Looking back, Hansen now says that he regrets not being “able to make this story clear enough for the public.”

I think his shortcoming had nothing to do with making the case clearly enough, but instead was rooted in not appreciating how people don’t change their behavior based on data. We change our actions after our beliefs change.

As Mahatma Gandhi famously said:

(Source)

If we want a different destiny, either individually or collectively, then we have to shift the beliefs. That’s where it all starts.

In our seminars we often call this part “How to talk to a reluctant partner” but you could just as easily swap out “partner” with colleague, friend, neighbor, or family.

The main difficulty in communicating is that many people mistakenly believe... » Read more

Insider

greatperformersacademy.com

Off The Cuff: A New Framework For The Future

A helpful tool for producing the outcomes we need
Monday, June 18, 2018, 9:50 PM

In this week's Off The Cuff podcast, Chris discusses:

  • Reflections On The Future
    • Debrief on Chris' recent NASA conference
  • Cheering On The Way Down
    • We're still partying, unaware of the crisis we're in
  • A New Framework For Seeing The World
    • The Extractive/Regenerative vs Scarity/Abundance plot

This week a travel-weary Chris recounts his key takeaways from the NASA/Blue Sky "Future of Work" conference he just attended. 

On one hand, it's encouaring smart mind of goodwill are coming together to brainstorm how to enter the future with prosperity and grace. But there's so much those caught up in the status quo are blind to. One accomplishment Chris is proud of is a framework he introduced to provide context and focus to the event. One that gets folks on board from the start that any actions embraced need to be based in creation, not consumption.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
Insider

Off The Cuff: The Last Rescue?

Soon, markets will have to fend for themselves
Saturday, June 9, 2018, 1:09 AM

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

  • The Visible Hand Of The Market Manipulators
    • Volatility is (once again) being intentionally throttled
  • Why Italy Matters
    • It has the size and will to destabilize the EU
  • Weakness In The EU Goes Beyond Italy
    • The banks, especially Deutche Bank, are in trouble
  • Can Anyone 'Win' A Trade War?
    • It's debatable. What's not is that everyone gets bloodied.

Chris and Mish address the latest "rescue" of the markets since Italy briefly threatened to destabilize Europe. So, the intervention of the past 8 years is still in play, but for how much longer? With the central banks starting in earnest to shrink their balance sheets (or at least taper their purchasing), these market "saves" will be less possible going forward. Mish, in particular, expects gold to reflect that heightened risk in the coming future.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
Insider

LegalZoom

A Primer On How To Create An LLC

Step-by-step instructions to make you a business owner
Friday, June 1, 2018, 7:43 PM

Executive Summary

  • The steps to take when creating your LLC
  • Helpful resources to guide the process
  • Under which conditions to seek legal assistance
  • Maintaining the protection of the corporate veil

If you have not yet read Part 1: The Advantages Of Creating An LLC available free to all readers, please click here to read it first.

The primer below walks you through each of the main steps you need to take to form your LLC. 

Like most things in the world of business and finance, the main elements of creating an LLC are pretty straightforward. It's in the customization of the process to best fit your specific needs where things can get more complex.

Most of you should be able to navigate the vast majority of this process on your own without having to pay a lot for legal services. That said, paying for experienced legal guidance quickly becomes a good value the more complicated your situation becomes. The more business partners you have, the bigger the scale of your operations, the more revenue you anticipate making, the more litigation risk within your new company's industry -- these are just some of the factors that justify involving a lawyer's help.

Accept this primer for what it is: an overview of the fundamental steps to take and considerations to make when creating an LLC. I'm not a lawyer, and the laws impacting LLC formation/taxation differ by jurisdiction (usually by state) and change over time (as with the recently-passed Tax Cuts & Jobs Act of 2017). DON'T take this as personal legal advice. Use it as intended: as a jumping-off point to the LLC creation process. For those who do create an LLC, I highly recommend at least having a lawyer review your documentation (if you're not contracting with one to manage the whole process for you), as well as seeking advice from your accountant for all related tax matters.

OK, with those important disclaimers made clear, lets move on to the process...  » Read more

Insider

Wikimedia

Off The Cuff: Why Governments Prefer A Currency Crisis To A Debt Crisis

Nothing's as destructive as cascasding debt defaults
Friday, June 1, 2018, 6:09 PM

In this week's Off The Cuff podcast, Chris and Wolf Richter discuss:

  • Panic in Europe
    • Italy is threatening to destabilize the EU
  • Central Banks Have Wrecked The Market Mechanisms
    • And tapering will reveal the damage done
  • What's Better? A Debt Crisis Or A Currency Crisis?
    • It seems governments vastly prefer the latter
  • Is Deutche Bank Threatening To Start A Banking Crisis?
    • Maybe. And it would set the world aflame.

With the action happening in Europe this week, from the Italian debt panic, to the new Spain PM, to Deustche Bank's worsening prospects, Wolf Richter comes on the program to make sense of the developments in real-time.

Notably, Wolf explains why the world's central banks will work with their home governments to destroy their currencies rather than start defaulting on their debts. This is path he expects the future to take:

A debt crisis is devastating, and it's devastating selectively. A currency crisis is kind of more democratic. It hits everybody. But a debt crisis, it hits the people that are recipients of government aid the most. And that's the problem in Greece and other countries, they had to go on austerity. Little bitty pensions were cut and things like that happened to save a few pennies here and there. And when it's a currency crisis, everybody gets hit and it spreads across. And I think they understand that Japan is uniquely equipped to deal with a currency crisis because it has this large trade surplus and because it sits on a pile of foreign exchange reserves. So that won't really blow up the Japanese economy where as a debt crisis would completely implode the economy, and it would wreak havoc among the people from pensioners and aid recipients and the healthcare system and everything would just collapse. And they decided that's not going to happen.

So that's how I think we need to look at what's happening in Japan. They made a decision to prevent a debt crisis. and if they get a currency crisis, fine, they'll manage that. Italy doesn't have that option. Italy doesn't have its own currency, and it can't do that, so it can get a debt crisis. And that's what happened to Greece, and that's what happened to other countries. When they get a debt crisis it's really nasty. I hope Italy can avoid this thing, but debt crises are just the worst, absolutely the worst. But if a government needs to do anything, it's avoid a debt crisis.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.
Insider

Off The Cuff: Suddenly, Instability Is Everywhere

Italy, Argentina, Turkey, auto loans, real estate...
Sunday, May 27, 2018, 1:21 PM

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

  • When Will Rising Interest Rates Matter?
    • We're close to the breaking point
  • The Fed As Buyer Of Last Resort
    • When the next recession hits, the Fed will directly buy bonds, stocks, etc
  • Suddenly, Weakness Is Everywhere
    • Italy, Argentina, Turkey, auto loans, student loans...
  • Ecologically, We're Killing Ourselves
    • Along with a tremendous number of other species

John returns this week to address this key question: When will the market crack? There are so many signs of instability suddenly in the markets -- when will they matter? Pricies are hanging in there, but the inexorable grind higher of the past 7 years has stalled out in 2018. This could very well be the year that everything changes.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.