bubble

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Everything Is Suddenly Deteriorating, Fast

Is this "it?" It's sure looking like it may be.
Friday, March 30, 2018, 8:37 PM

Executive Summary

  • Geopolitical unity is fracturing as countries are forced to compete more
  • LIBOR is signaling a credit emergency in Europe
  • The market is sending signs a major war and/or a major recession may be imminent
  • The last remaining heroes for risk-on capital, the FANG stocks, are quickly becoming villains

If you have not yet read Part 1: The Future Ain't What It Used To Be, available free to all readers, please click here to read it first.

The central banks of the world have failed: colossally, completely and dangerously.  Yes, they will try to rescue the “markets” once again, as they did in 2011 and 2016 when things similarly looked to be falling apart.

The reason they might not be able to succeed this time?

They are out of maneuvering room. 

Nothing will happen if interest rates are clubbed back down a percent or two.  To do that, though, would require the same sort of lock-step coordination as prior times.  The ECB, BoJ and Fed would all have to operate seamlessly again. 

The most immediate of my concerns, even more than the tech-wreck that began a few weeks ago, is the rise in the LIBOR interest rate.  Why?  Because trouble always moves from the outside in.

Let’s do the math  With $350 trillion worth of assets tied to LIBOR, that means each 1% rise in the LIBOR rate translates into $3.5 trillion dollars of increased interest costs.

LIBOR is now at its highest rate since 2009, and it's spiking for reasons nobody can fully explain. In my mind, higher LIBOR means that there’s less trust and/or liquidity in the system.  It also means borrowing costs are heading up for... » Read more

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The Future Ain't What It Used To Be

Looks like we're in for a much rockier ride than many expect
Friday, March 30, 2018, 8:36 PM

This marks our our 10th year of doing this.  And by “this”, we mean using data, logic and reason to support the very basic conclusion that infinite growth on a finite planet is impossible. 

The only remaining question concerns how fast the adjustment happens. Will the future be defined by a "slow burn", one that steadily degrades our living standards over generations? Or will we experience a sudden series of sharp shocks that plunge the world into chaos and conflict? » Read more

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traderscommunity.com

Danielle DiMartino Booth: Don't Count On The Powell Fed To Rescue The Markets

The new Fed Chair may break from his predecessors
Sunday, February 11, 2018, 4:29 PM

The recent gut-wrenching drop in asset prices began on the first day of the job for new Federal Reserve Chairman Jerome Powell.

How is Mr. Powell likely to react to a suddenly sick-looking market? Will he step in forcefully to reassure investors that there's a "Powell put" in place as a backstop?

To address these questions, former analyst at the Federal Reserve Bank of Dallas, Danielle DiMartino Booth, returns to the podcast this week. In her opinion, having studied Powell's previous statements, she thinks those expecting him to continue the market support his predecessors provided will likely be quite disappointed.

Powell appears to be no large fan of continued quantitative easing, and has long been on the record as concerned about the eventual pain its unwind will cause. He very well may resist riding to the market's rescue at this time, allowing natural market forces to finally have their way: » Read more

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What The Crypto Crash & Stock Market Plunge Have In Common

Only one thing matters in bubble markets: sentiment
Monday, February 5, 2018, 5:57 PM

Did the stock market bubble just pop, just as the cryptocurrency one has? » Read more

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Reuters

It's Looking A Lot Like 2008 Now...

Did today's market plunge mark the start of the next crash?
Friday, February 2, 2018, 9:57 PM

Economic and market conditions are eerily like they were in late 2007/early 2008.

Remember back then? Everything was going great. Home prices were soaring. Jobs were plentiful.

The great cultural marketing machine was busy proclaiming that a new era of permanent prosperity had dawned, thanks to the steady leadership of Alan Greenspan and later Ben Bernanke. And only a small cadre of cranks, like me, was singing a different tune; warning instead that a painful reckoning in our financial system was approaching fast.

It's fitting that I'm writing this on Groundhog Day, as to these veteran eyes, it sure has been looking a lot like late 2007/early 2008 lately... » Read more

Insider

Off The Cuff: Is This The Blow-off Top?

And if so, how long can it continue?
Thursday, January 4, 2018, 8:42 PM

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

  • How Long Can This Continue?
    • Debt has been rising faster than income everywhere for decades
  • The Rules Will Certainly Be Changed
    • Desperate elites will always act in their best interest
  • Are We Seeing The Blow-off Top?
    • Dear God, let's hope so
  • A Commodities Price Spike Will Pop This Bubble
    • If it doesn't collapse under its own overshoot, first

Chris and John kick off the new year by remarking how similar the conditions now feel to 1999 and 2007. The world financial markets have been running much too hot for far too long, and yet they've kicked into an even higher gear of late. Fortunes are being made in the cryptocurrencies -- a space most of the investors throwing their capital into have next to zero understanding of. The Dow is hitting new price records faster than it ever has in its history.

Obviously this can't end well, and it won't. And when the inevitable crash occurs, expect those who created this mess to take cruel-handed measures to sacrifice the rest of us in order to protect whatever amount of their privilege they can.

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.
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fanpop.com

Off The Cuff: Bubbles Everywhere!

Ideas for undervalued assets to rotate your capital into
Monday, December 18, 2017, 3:57 PM

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

  • Nearly Every Market Is At A Record Bubble High
    • But 95% of the population is living under recessionary conditions
  • What Can Investors Rotate Into For Value/Safety?
    • There are a few asset classes that make sense
  • The High Cost Of Pursuing Continued Economic Growth
    • We're destroying essential components of the ecosphere
  • Money And Work Unchained
    • Charles lays out the key insights of his new book

Chris and Charles begin with a romp through the near-endless list of asset classes that have risen to nose-bleed overvaluations in today's markets. The gap between price and value is absolutely insane right now. Where can a cautious investor park their capital in conditions like this? Chris and Charles have several candidates to recommend.

They then dig into an important and fascinating discussion of Universal Basic Income. Make no mistake: we will be hearing an increasing chorus of politicians and the populace clamor for such a solution -- but it's a fool's errand; one that would be tremendously destructive to both our economy and our social fabric. This is the topic of Charles new book, Money And Work Unchained. (If you'd like to read the first few chapters of the book for free, Charles is making them available for free to Peak Prosperity readers here).

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.
Podcast

Doug Noland: There Will Be No Way Out When This Market Bubble Bursts

Financial assets will become toxic to hold
Monday, December 11, 2017, 3:07 PM

This week Doug Noland joins the podcast to discuss what he refers to as the "granddaddy of all bubbles".

He certainly shares our views that prices in nearly every financial asset class have become remarkably distorted due to central bank intervention, first with Greenspan's actions to backstop the markets in the late-1980's, and more recently (and more egregiously) with the combined central banking cartel's massive and sustained liquidity injections in the years following the Great Financial Crisis.

All of which has blown the biggest inter-connected set of asset price bubbles the world has ever seen. Noland foresees tremendous losses as inevitable, as the central banks lose control of the monstrosity they have created: » Read more

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stocksmasters.com

If You Don't Own Any Bitcoin, Read This

This week it hit $19,000. What's next?
Friday, December 8, 2017, 8:50 PM

Bitcoin's price has gone 'beyond exponential' this week.

Just yesterday, while I was working on this article, it shot up 22% -- from $14,000 to $17,000 (hitting an intraday high of $19,000). And that's after a mind-blowing upwards rocket ride over the past several months. I think it's safe to say that the vicious melt-up in price over such a short timeframe has surpassed the expectations of even the starriest-eyed Bitcoin fanboys.

The whole world, especially the 99.99% of us that own zero cryptocurrency, is asking: What happens next? And, What should I do?

Is this insane trajectory going to continue for a lot longer? Do I need to get in now to avoid missing this once-in-lifetime fortune-making opportunity?

Or is this a classic bubble blow-off top? Is this the deadliest time to enter, right before the price implodes?

 
Insider

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When The Bubbles Burst...

How bad will it get? And how should you prepare?
Saturday, December 2, 2017, 12:58 AM

Executive Summary

  • It's Time To Name The Guilty
  • The Gross Global Mis-Pricing Of Risk
  • The New Fed Looks Even Worse Than The Old
  • What You Should Do To Prepare

If you have not yet read Part 1: You're Just Not Prepared For What’s Coming, available free to all readers, please click here to read it first.

So I just want to raise my hand here and say that I am in favor of handing out serious punishments to the central bankers who negligently placed all but a very tiny few directly into harm’s way, knowingly and maliciously.  They knew they were harming pensions, savers, retirees, the young, the poor and the middle-classes.   They knew what they were doing was harming an entire generation of young people, fostering a deeply unfair and ultimately dangers wealth and income gap, and backstopping bank losses even (especially?) when those banks did stupid things that deserved losses. 

Yet they insisted and they persisted.  And here we are, with the third set of bubbles in 20 years and the largest wealth and income gaps in all of history.  I say the people responsible should be held accountable.

This Time Is Going To Be Different?

When these bubbles burst, and trust me they will, the aftermath is going to be especially ugly.  Like all bubbles, we’ll discover that a vast amount of lending took place towards ideas and projects and in support of spending habits that really should not have been undertaken.

Credit bubbles always end up making a pile of loans to really derelict ideas.  This time is no different, except the scale is so much larger.  There are so many bright red warning lights that it’s difficult to figure out which ones to convey.

Like the charts above, each one of these next charts could easily be an entire meditation that, if deeply understood, would reveal the whole story.  So settle in, take a deep breath and please consider the following.

First up, we have this deeply shocking chart for which the data has only gotten more shocking in recent months... » Read more