Off The Cuff

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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.

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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.

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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.

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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.

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Off The Cuff: The Whole System Is Insane Now

The Market & the State now both incentivize our destruction
Monday, May 14, 2018, 12:36 PM

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

  • Seminar Summary
    • CHS shares his key takeaways from speaking at the PP seminar
  • Energy Is Everything
    • And the situation is much more dire than most realize
  • The Whole System Is Insane Now
    • The Market & the State now incentivize our destruction
  • An Invitation To Live Regeneratively
    • We have the models. But do we have the will?

Fresh from speak at Peak Prosperity's annual seminar, Charles Hugh Smith reflects on his key takeways from the event, plus focuses our attention on the mal-incentives our economic models offer us these days. They are literally rewarding us to hasten our own destruction.

As Charles frankly puts it...

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Off The Cuff: Hall Of Mirrors

Our media is so distorted, where can you find truth?
Friday, May 4, 2018, 10:39 AM

In this week's Off The Cuff podcast, Chris and James Howard Kunstler discuss a whole slew of topics I don't have time to summarize, as our 2018 seminar starts in an hour.

Enjoy!

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Off The Cuff: Is Inflation Now In The Rear-View Mirror?

Mike Shedlock warns of deflation ahead
Friday, March 9, 2018, 3:11 AM

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

  • Are We On Our Way To Tipping Into Deflation?
    • We will be if we have another credit crisis
  • We're At Record Levels Of Indebtedness
    • So deflation would be painfully brutal
  • Trumps Trade Wars Will Hasten A Deflationary Bust
    • Economic growth will be even harder to achieve
  • It's Time To Own Real Things
    • Commodities are looking better and better

Recorded last week, Mike Shedlock explains why he sees an inevitable -- and painful -- deflationary rout ahead for world financial markets...

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Off The Cuff: How Much Farther Is The Market Likely To Fall From Here?

Spoiler alert: A lot
Friday, February 9, 2018, 12:07 PM

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

  • What The Heck Happened This Week?
    • The volatility trade blew up
  • How Much Farther Might The Market Fall?
    • It was so overbought, that there's a looong way to fall
  • Where Can Money Find Safety Right Now?
    • Only in a very few places, as nearly everything is still at an overvaluation extreme
  • What Should We Be Watching For Next?
    • Look for the key longstanding correlations begin to break down. That's when the big crash will happen.

This week's Off The Cuff is a must-listen podcast.

In it, Chris and Charles deconstruct the price action of the markets this week -- both agree that it (finally!) marks an end to the 7+ year "extend and pretend" unbroken rally in both stocks and bonds.

More importantly, they warn of the paucity of "safe" places for investment capital right now; as almost every asset class remains dangerously overvalued, and bank risk is on the rise. But they do identify the few areas where money is likely to flee -- it will be very important to be positioned in these *before* everyone else tries to enter.

As for how much farther the markets may drop -- whether or not there's another short-term rescue happens, both see prices ultimately falling much, much lower. As Charles observes:

I'm looking at a weekly chart of the Dow Industrial Average and I'm seeing we've hardly started a decline.

I mean, the MACD has just barely touched the first part of a negative cross. The Stochastic is only down from 100 to 86 -- oversold' on Stochastic would be 20. The RSI (the Relative Strength Index)has fallen 60 -- and again, oversold would be something like 30.

So the people who are thinking they're going to buy the dip and it's going to run up another couple thousand points... maybe. But the technical chart says this is ugly, and it's going to take a long time—at least a matter of weeks, if not a couple of months—to actually bottom out.

It's looking to be a really treacherous year for investors, because the trend has been broken. 

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The Shining/Warer Bros

Off The Cuff: Remember Volatility? It's Baaack....

And a tremendous amount of losses may soon follow
Friday, February 2, 2018, 10:16 AM

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

  • Remember Volatility? It's Baack...
    • And a tremendous amount of losses may follow soon
  • Rising Interest Rates
    • The long party of cheap credit is ending fast
  • The Middle Class Is Becoming The Working Poor
    • Fewer and fewer are able to save for the future
  • Unpacking The State Of The Union
    • One key question: "Where's all that money going to come from?"

Suddenly, volatility is rearing it's snarling head everywhere. The US dollar has plunged. Interest rates are marching higher than they have in many years. Cryptocurrency prices have been more than cut in half from their early January highs. Now, even stocks are beginning to wobble...

For years now, one of the most crowded and "easy" trades for making profit has been to short volatility. Trillions are still in play on that bet. With volatility now rising, that bet increasingly risks suddenly becoming a bad one -- which would unleash a tremendous volume of losses across the financial markets.

As Mish warns...

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Off The Cuff: The Most Overpriced Market In Our Lifetime

Too many charts all are giving the same warning
Friday, January 26, 2018, 5:34 PM

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

  • The Most Overpriced Market In Our Lifetime
    • Too many charts are all giving the same warning
  • The Dumping Of The Dollar
    • Why has it fallen so far, so fast?
  • Interest Rates On The Move
    • Higher rates will serve as kryptonite to today's super-charged markets
  • Dying Ecosystems
    • The data, sadly, keeps getting worse and worse

Freshly-returned from our 3-city strings of Summits on the West Coast, Chris surfaces some of the most hair-raising data discussed at those intensive gatherings. We're at a point with today's markets where investors have to believe that "this time is truly different" and macro & micro underlying fundamentals no longer matter, or that a wicked price correction is extremely overdue.

Chris is seeing more and more of the exact same signs of coming breakdown as he did in 2007.

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