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Tag Archives: China

  • Insider

    Off The Cuff: The Party’s Over

    Terrible data is finally ending our hopium addiction
    by Adam Taggart

    Monday, May 20, 2019, 10:15 AM

    3

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

    • Next Up: A Currency War With China?
    • Recession Warning
    • A War With Iran, Too?
    • More Cracks In Europe

    The self-delusional “Everything is awesome and getting better!” narrative that has pushed markets ever higher for the past years is suddenly unravelling. The current China tariffs will undo any remaining salubrious impact of the Trump tax cuts, a global recession appears underway, and — seriously — are we about to go to war with Iran??

    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.

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  • Insider
    War with Iran

    War with Iran – The Risk is Elevated

    Are you prepared?
    by cmartenson

    Wednesday, May 15, 2019, 6:46 AM

    18

    Is it really about to go down in Iran?  Is a war now coming?

    The Twitter feeds I have tracking Iran are on fire this morning.

    Looks like the Trade deal is bad enough and the Barr investigation threatening enough that the “answer” is war with Iran.

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  • Blog

    At The End Of The Day, It’s All About Confidence

    And sentiment in the markets is now souring. Bigly.
    by Adam Taggart

    Friday, May 10, 2019, 3:00 PM

    24

    We’ve been shining a bright light on the technical compression seen in the major stock indices, indicative that a major breakout move is coming — one we’ve argued is much more likely to happen to the downside.

    Well, with the recent fizzling of the principal storyline supporting the bullish narrative — an imminent trade deal with China  — our predicted downside breakdown finally occurred this week.

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  • Insider

    Off The Cuff: Big Trouble In China Trade Talks

    The breakdown in talks has created a market breakdown
    by Adam Taggart

    Friday, May 10, 2019, 11:32 AM

    2

    In this week’s Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

    • What’s driving the latest breakdown in trade talks
    • The 2 Chinas: and why it can no longer have it both ways
    • The dollar shortage in China
    • The great global slowdown

    The big news driving the markets this week is obviously the breakdown in trade talks between the US and China. In this week’s podcast, Chris and Charles deconstruct the key variables of the situation and explain why they don’t think a deal can get done anytime soon:

     

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  • Insider

    The Trade Deal Has Collapsed

    The main support propping up the markets suddenly looks very shaky
    by cmartenson

    Wednesday, May 8, 2019, 9:01 AM

    30

    Count me as surprised, but it seems like the China trade deal is collapsing.  Surprised because both sides, China and the US, have much to lose in this battle.

    While there’s certainly some temporary local benefit to various pockets and sectors of the economy, the fact remains that the world economy is still exhibiting signs of slowing down and anything that puts additional weight on the economy right now could be the stone that sinks the barge.

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  • Insider
    Wikimedia

    Why This Better Work

    Because if it doesn't, the aftermath looks terrifying
    by cmartenson

    Friday, April 19, 2019, 4:20 PM

    15

    Executive Summary

    • China's critical role in keeping the party going (and why China is in a weaker position this time)
    • Despite current stock prices, the economic data is awful and fast getting worse
    • A recession is near-unavoidable at this point
    • What to do if you're not in the top 0.1%

    If you have not yet read Part 1: It's 2016 All Over Again. Or Is It?, available free to all readers, please click here to read it first.

    I know that it seems as if the US equity markets cannot ever go down and, truthfully, those indexes receive a ton of help from the Fed, the media, and from corporate buybacks. 

    The trouble, as always, when it begins will not be detected in the large, successful companies first.  Amazon and APPL will be among the last to go down.

    The trouble will start at the outside and work its way inwards.  This “outside in” phenomenon is pretty robust and it has not yet been repealed by the interventionistas at the Fed.

    In the US we might look to the small cap stocks to give way first, and I think they have.  It's in that universe where we will find an outsized majority of the zombie companies. 

    From a fundamental standpoint the small caps are a certified balance sheet mess.  Their net debt has been on a 40-degree, ruler-straight rise since 2010 even as their EBIDTA has risen at only a 10-degree trajectory.  The current gap is eye popping.

    This is a huge increase in debt, and it makes these companies especially vulnerable to any economic downturn or rise in interest rates.

    Accordingly, while all eyes are on the Nasdaq powering to a brand new all time high, the small caps in the Russell 2000 are definitely not making new highs and seem to be sneaking out the back door.

    If you are looking for a place to short US equities at the index level, the small caps are the …

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  • Podcast

    Sven Henrich: It's Make Or Break Time For The Markets

    Stocks are poised to break big, one way or the other
    by Adam Taggart

    Monday, April 1, 2019, 4:46 PM

    4

    It's make or break time in the markets cautions Sven Henrick, technical analyst and lead market strategist for Northman Trader.

    His weekly flurry of trendline charts warn that the major indexes have been compressing in rising wedges that increasingly point to a binary outcome: either a massive new leg up that will result in the market making new all time highs, or a bad breadown that could waterfall into a 2008-style correction.

    His reams of data increasingly suggest that today's global elevated asset prices are in no way justified by the fundamentals of the underlying world economies. And that someday — perhaps quite soon — a reckoning long overdue will occur.

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  • Insider

    Tuning Into Reality

    Here's the hard data that they *don't* want you to see
    by cmartenson

    Friday, February 22, 2019, 5:48 PM

    8

    Executive Summary

    • The central banks are the key players at this stage. When they fail, the system will fail.
    • How today's Frankenmarkets are poised to collapse
    • Where we see the most convincing signs that the global economy is now falling into recession
    • Why we should expect bad times to lead to even worse decisions

    If you have not yet read Part 1: We're Living In 'The Groundhog Show', available free to all readers, please click here to read it first.

    The reason I still get angry and frustrated from time to time is because we’re just wasting very important time and resources that really ought to be dedicated to other pursuits.

    As I watch the US electorate recklessly lurch from one emotional outrage to another, I truly wonder if this is really just the emergent outcome of how events spread virally — or if it’s not something more intentional and sinister. Is this all a program designed to keep people revved up but pointed in the wrong directions?

    So if you find yourself increasingly feeling that things are really off track, that’s probably because you’ve also been paying close attention to the news. Whether by design or default, this doesn’t speak well to our ability to rally effectively to address the many massive predicaments society faces.

    As an ex-Facebook executive said about the nefarious aspects of the social media phenomenon he helped to create, “No civil discourse, no cooperation, misinformation, mistruth; you are being programmed.”

    That closely matches what I am seeing in the online world now. And it’s really unfortunate, because the stakes are so high. We really need to begin preparing for a very different future.   

    Which is hard, if not nearly impossible to do in a fractured and polarized world such as the one that’s been emerging over the past few years.

    The central banks are at the very center of it all.  The financial markets have taken on a new significance in the world and are now one of the prime, if not the prime, signaling mechanisms used by central planners to communicate with the world.

    So it's critical to understand that the most important factor in play is…

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  • Insider

    You vs The Recession

    To fail to plan is to plan to fail
    by cmartenson

    Friday, February 8, 2019, 3:23 PM

    2

    Executive Summary

    • The limits to central bank money printing
    • The key indicators signalling recession
    • The growing fractures in the US economy & housing market, Europe, China & global trade
    • Stepping out of the recession's path

    If you have not yet read Part 1: Next Stop: Recession!, available free to all readers, please click here to read it first.

    Here in early 2019 the central banks have already caved to the market’s December 2018 weakness by printing more money, softening their plans for reducing their balance sheets and delaying the already timid schedule for introducing new interest rate hikes.  They are panicking early and often and seem inordinately afraid of any sort of downturn in stock prices, which is a concerning matter in itself.

    So our asterisk on this claim of ours that a recession has arrived is contained in the phrase “until and unless.”  Until and unless the central banks reignite their QE booster rockets, and do so in larger-than-ever quantities, and do so by giving money to the common people (not the banks), we think that the die is cast.  The recession has arrived. 

    Perhaps we should introduce a second idea which is contained in the phrase “they can until they can’t.”  The central banks managed to get a bounce in the equity markets through a combination of easing financial conditions, as they say (i.e. throw more money to the markets), and jawboning. 

    This was sufficient to get a relief bounce in equity and bond markets, but it did nothing to alter the many recession indicators we’ll track for you below.  The central banks can still move the markets with their words and deed.  Someday, perhaps soon, it will be shown they can’t.  They can move markets until they can’t.  Other such times of the central banks being overwhelmed by the movement of the market tides were in 2000 and 2008.

    What sorts of things could or will swamp the levitating effects of money printing?  One is a full-blown recession that ends up crushing the various crevices that central banks cannot directly control via printing such as real estate, consumer sentiment, and zombie companies’ ability to meet debt payments.

    Another is a deflationary event that sweeps across overleveraged debt markets and causes the very worst sort of damage to a debt-based money system built on leverage; a decline in the amount of credit outstanding from one period to the next.  In other words, another 2008-2009 type of event.

    The central banks can control things until they can’t.  That’s what history says.  Perhaps something more fundamental has changed since that allows them more complete control than ever, and perhaps we should always have a few of our chips placed on that possibility, but otherwise it’s not different this time and the central banks will once again discover that credit bubbles are really fun on the way up and utterly destructive on the way down.

    We think the next recession has arrived and that it’s going to be a real doozy in terms of creating financial market panic and losses.

    Specifically, you need to watch out for…

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  • Blog

    A Survival Guide For 2019

    How to safely navigate the 'Year Of Instability'
    by Adam Taggart

    Friday, February 1, 2019, 3:24 PM

    40

    With the bursting of the Everything Bubble, we declared last year as the 'Year Everything Changed'. This will be the 'Year of Instability', possibly preceding an upcoming 'Year Of Woe' in 2020.

    But look, we're not saying the world is the process of ending imminently. It's just that we've entered the part of the timeline when things are going to start to get really rocky.

    And we think it's much more useful to think of 2019 as the 'Year Resilience Matters'. It shifts the focus away from fear and instead towards the many things you can do to protect yourself and those you care about – and even to position yourself to prosper through the coming challenges.

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