Phoenix Capital Research

As I’ve been stating for weeks now, inflation is the big theme for 2018. Even the Fed’s ridiculous CPI measure is coming in higher than expected (though real inflation is now at 3%).

Why is this a big problem?

Because inflation is going to:

1)   Either blow up the Everything Bubble

2)   Force Central Banks to become more hawkish, thereby draining liquidity from the stock market.

As I outlined in my book The Everything Bubble: The Endgame For Central Bank Policy post-2008, the Fed created a bubble in US sovereign bonds, also called Treasuries.

And because these bonds are the bedrock for the current fiat monetary system, the “risk-free rate” of return against which all risk assets are priced, when the Fed created a bubble in them, it created a bubble in EVERYTHING (stocks, commodities, corporate bonds, real estate, etc.).

This strategy worked (as far as the Fed is concerned) provided the bond market continued to remain in a secular downtrend.

This is where inflation comes in.

Treasury yields trade based on inflation (among other things).

When inflation rises, Treasury yields rise to accommodate for this.

When Treasury yields rise, Treasury prices FALL.

When Treasury prices FALL, the Everything Bubble begins to burst.

Well guess what? Treasury yields are SOARING, having broken a 20 year downtrend.

Put simply, this chart is telling us BIG inflation is on the way. The Everything Bubble is on borrowed time unless the Fed acts soon.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

As I’ve been stating for weeks now, inflation is the big theme for 2018. Even the Fed’s ridiculous CPI measure is coming in higher than expected (though real inflation is now at 3%).

Why is this a big problem?

Because inflation is going to:

1)   Either blow up the Everything Bubble

2)   Force Central Banks to become more hawkish, thereby draining liquidity from the stock market.

As I outlined in my book The Everything Bubble: The Endgame For Central Bank Policy post-2008, the Fed created a bubble in US sovereign bonds, also called Treasuries.

And because these bonds are the bedrock for the current fiat monetary system, the “risk-free rate” of return against which all risk assets are priced, when the Fed created a bubble in them, it created a bubble in EVERYTHING (stocks, commodities, corporate bonds, real estate, etc.).

This strategy worked (as far as the Fed is concerned) provided the bond market continued to remain in a secular downtrend.

This is where inflation comes in.

Treasury yields trade based on inflation (among other things).

When inflation rises, Treasury yields rise to accommodate for this.

When Treasury yields rise, Treasury prices FALL.

When Treasury prices FALL, the Everything Bubble begins to burst.

Well guess what? Treasury yields are SOARING, having broken a 20 year downtrend.

Put simply, this chart is telling us BIG inflation is on the way. The Everything Bubble is on borrowed time unless the Fed acts soon.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The Fed is “letting the stock market go.”

As I’ve outlined multiple times, if the Fed has to choose between supporting the bond bubble or supporting stocks, it will choose bonds Every. Single. Time.

The fact is that in a debt-saturated world such as the one we live in today, if stocks collapse, investors and Wall Street get angry. If bonds collapse, entire countries go bust.

Cue NY Fed President Bill Dudley last week:

Judging by remarks this week from policy makers, who were unmoved by rising yields and the losses in stocks, the Powell Fed isn’t rushing to signal that tendency. New York Fed President William Dudley on Thursday called the stock selloff “small potatoes” and said it has no economic implications.

Source: Bloomberg

This is Bill Dudley talking… the guy who was pushing for more QE non-stop and who routinely appeared to verbally “prop up” the markets anytime they took a nose-dive from 2008-2016.

And now he’s calling last week’s sell-off “small potatoes.” And he’s ALSO saying that the Fed believes the markets could dive without impacting the economy in any significant way.

This means the bounce in stocks is on “borrowed time.” The time to prepare for the next drop is NOW before it hits.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

As I write this, there are only 33 copies left.

To pick up one of the last remaining copies…

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The Fed is “letting the stock market go.”

As I’ve outlined multiple times, if the Fed has to choose between supporting the bond bubble or supporting stocks, it will choose bonds Every. Single. Time.

The fact is that in a debt-saturated world such as the one we live in today, if stocks collapse, investors and Wall Street get angry. If bonds collapse, entire countries go bust.

Cue NY Fed President Bill Dudley last week:

Judging by remarks this week from policy makers, who were unmoved by rising yields and the losses in stocks, the Powell Fed isn’t rushing to signal that tendency. New York Fed President William Dudley on Thursday called the stock selloff “small potatoes” and said it has no economic implications.

Source: Bloomberg

This is Bill Dudley talking… the guy who was pushing for more QE non-stop and who routinely appeared to verbally “prop up” the markets anytime they took a nose-dive from 2008-2016.

And now he’s calling last week’s sell-off “small potatoes.” And he’s ALSO saying that the Fed believes the markets could dive without impacting the economy in any significant way.

This means the bounce in stocks is on “borrowed time.” The time to prepare for the next drop is NOW before it hits.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

As I write this, there are only 33 copies left.

To pick up one of the last remaining copies…

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The Fed is “letting the stock market go.”

As I’ve outlined multiple times, if the Fed has to choose between supporting the bond bubble or supporting stocks, it will choose bonds Every. Single. Time.

The fact is that in a debt-saturated world such as the one we live in today, if stocks collapse, investors and Wall Street get angry. If bonds collapse, entire countries go bust.

Cue NY Fed President Bill Dudley last week:

Judging by remarks this week from policy makers, who were unmoved by rising yields and the losses in stocks, the Powell Fed isn’t rushing to signal that tendency. New York Fed President William Dudley on Thursday called the stock selloff “small potatoes” and said it has no economic implications.

Source: Bloomberg

This is Bill Dudley talking… the guy who was pushing for more QE non-stop and who routinely appeared to verbally “prop up” the markets anytime they took a nose-dive from 2008-2016.

And now he’s calling last week’s sell-off “small potatoes.” And he’s ALSO saying that the Fed believes the markets could dive without impacting the economy in any significant way.

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This means the bounce in stocks is on “borrowed time.” The time to prepare for the next drop is NOW before it hits.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

As I write this, there are only 33 copies left.

To pick up one of the last remaining copies…

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The markets have changed and many are going to get “taken to the cleaners.”

Last year, 2017, was a not a normal year for stocks. Stocks as an asset class are not meant to go straight up without even a 1% pullback. But that is precisely what happened for nearly an entire year.

Now that massive market rig is over. And anyone who continues to invest as though it’s 2017 is going to get annihilated in the coming weeks. The only thing that stop an all out crash in stocks was clear and obvious intervention in the markets by Central Banks.

Take Friday’s action for example. The S&P 500 briefly broke its 200-DMA. At that point the Plunge Protection Team stepped in and ramped stocks over 3% in the span of an hour.

This was intervention, plain and simple. NO real investors “panic buy” stocks in this kind of rapid frenzy.

This raises the question…

What would have happened if the PPT had not stepped in? Where would stocks fall to?

Buckle up, it’s about to get nasty. The PPT can trigger bounces, but it requires REAL buyers for stocks to enter a prolonged rally.

Put another way, we’re still going to that circle in the next few weeks.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

We’ve extended our offer to download this report FREE due to today’s market breakdown. But this is the last day this report will be available to the general public.

To pick up one of the last remaining copies…

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The bond market has done the Fed’s job for it.

The reality is that the Fed is way behind the curve. True, the Fed is raising rates, but it is not raising them fast enough. The market was CLEARLY in a parabolic rise based on the fact financial conditions were too loose.

So what happened?

US Treasury bonds began to collapse, pushing yields higher, which in turn forced a re-pricing of risk assets (read: stocks collapsed).

Remember, Treasury yields represent the “risk free” rate of return for the financial system, or the rate against which ALL risk assets (including stocks) are valued. So when these yields rise, it means risk is repriced DOWN.

Worse still, there is no sign that this is over yet. The S&P 500 was rejected by its former trendline yesterday (blue line) so the red line (2,550) is now in play.

Buckle up, it’s about to get nasty.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The bond market has done the Fed’s job for it.

The reality is that the Fed is way behind the curve. True, the Fed is raising rates, but it is not raising them fast enough. The market was CLEARLY in a parabolic rise based on the fact financial conditions were too loose.

So what happened?

US Treasury bonds began to collapse, pushing yields higher, which in turn forced a re-pricing of risk assets (read: stocks collapsed).

Remember, Treasury yields represent the “risk free” rate of return for the financial system, or the rate against which ALL risk assets (including stocks) are valued. So when these yields rise, it means risk is repriced DOWN.

Worse still, there is no sign that this is over yet. The S&P 500 was rejected by its former trendline yesterday (blue line) so the red line (2,550) is now in play.

Buckle up, it’s about to get nasty.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

For weeks we’ve been pounding the table that the bond market was flashing “danger.” Just about everyone else on the planet was claiming, “rising rates don’t matter.”

We now know how that turned out.

Indeed, High Yield Credit (junk bonds) peaked well before stocks did. Again, the debt markets were screaming trouble was coming. But 99% of investors were not prepared. 

The truth is that the Fed is way behind the curve. Inflation is back and it’s endangering the bond bubble. Until the Fed or someone else reins in the bond market, there is no significant rally coming to the markets.

We need to see the yield on the 10-year Us Treasury turn back down towards its long-term trendline.

Put another way, until the bond market is back under control and yields fall, the bull market in stocks is over.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

For weeks we’ve been pounding the table that the bond market was flashing “danger.” Just about everyone else on the planet was claiming, “rising rates don’t matter.”

We now know how that turned out.

Indeed, High Yield Credit (junk bonds) peaked well before stocks did. Again, the debt markets were screaming trouble was coming. But 99% of investors were not prepared. 

The truth is that the Fed is way behind the curve. Inflation is back and it’s endangering the bond bubble. Until the Fed or someone else reins in the bond market, there is no significant rally coming to the markets.

We need to see the yield on the 10-year Us Treasury turn back down towards its long-term trendline.

Put another way, until the bond market is back under control and yields fall, the bull market in stocks is over.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

For weeks we’ve been pounding the table that the bond market was flashing “danger.” Just about everyone else on the planet was claiming, “rising rates don’t matter.”

We now know how that turned out.

Indeed, High Yield Credit (junk bonds) peaked well before stocks did. Again, the debt markets were screaming trouble was coming. But 99% of investors were not prepared. 

The truth is that the Fed is way behind the curve. Inflation is back and it’s endangering the bond bubble. Until the Fed or someone else reins in the bond market, there is no significant rally coming to the markets.

We need to see the yield on the 10-year Us Treasury turn back down towards its long-term trendline.

Put another way, until the bond market is back under control and yields fall, the bull market in stocks is over.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

For weeks we’ve been pounding the table that the bond market was flashing “danger.” Just about everyone else on the planet was claiming, “rising rates don’t matter.”

We now know how that turned out.

Indeed, High Yield Credit (junk bonds) peaked well before stocks did. Again, the debt markets were screaming trouble was coming. But 99% of investors were not prepared. 

The truth is that the Fed is way behind the curve. Inflation is back and it’s endangering the bond bubble. Until the Fed or someone else reins in the bond market, there is no significant rally coming to the markets.

We need to see the yield on the 10-year Us Treasury turn back down towards its long-term trendline.

Put another way, until the bond market is back under control and yields fall, the bull market in stocks is over.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The markets just changed.

Few understand what happened to the financial system after 2008. What happened was that the debt based financial system began to implode as debt deflation took hold. The scary thing is that it wasn’t even a large amount of debt deflation.

Remember the 2008 Crisis? That time when everyone thought the world was literally going to end? It’s that small dip in the dotted line below:

 US Gross Domestic Product vs. US Total Debt Securities, Trillions US Dollars (1945-2016).

Note: Data adapted from Federal Reserve Bank of St. Louis (2017).

To stop a full-scale collapse, Central Banks attempted to corner the sovereign bond market via interest rates and QE programs. I realize that many will fail to grasp the significance of this so let me explain.

In our current financial system, in which no major currency is backed by Gold or any other finite asset, sovereign bonds represent the bedrock for the system. They are the “risk-free” rate of return or the standard against which all risk assets are valued.

Put simply, Central Banks attempted to corner ALL risk by controlling the baseline against which it was valued.

This created bubbles in literally EVERYTHING: corporate bonds, state bonds, stocks, commodities, real estate, and even tertiary items like passive investing and shorting volatility.

Those who went “all in” on “free money” trades like shorting volatility or risk-parity funds, were in fact simply investing in a derivative of The Everything Bubble: a tertiary bubble in the idea that investing came without pain and was the equivalent of a free lunch.

Here’s the breakdown:

1)   Central Banks created a bubble in the risk-free rate or sovereign bonds, which lead to…

2)   A bubble in stocks as money was forced into risk to find higher returns (the “There Is No Alternative” or TINA) bubble, which lead to…

3)   A bubble in passive investing and shorting volatility… two sides of the same “stocks are never going to fall thanks to Centrals Banks” coin.

Yesterday, two these tertiary bubbles (the passive investing in risk-parity fund bubble and the short volatility bubble) blew up.

This is the beginning of a major market change.

I’m not saying that The Everything Bubble burst yesterday, I’m saying that volatility is back and that the tertiary bubble in passive investing and shorting volatility is over.

We now have to see how the secondary bubble in stocks holds up.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The markets just changed.

Few understand what happened to the financial system after 2008. What happened was that the debt based financial system began to implode as debt deflation took hold. The scary thing is that it wasn’t even a large amount of debt deflation.

Remember the 2008 Crisis? That time when everyone thought the world was literally going to end? It’s that small dip in the dotted line below:

 US Gross Domestic Product vs. US Total Debt Securities, Trillions US Dollars (1945-2016).

Note: Data adapted from Federal Reserve Bank of St. Louis (2017).

To stop a full-scale collapse, Central Banks attempted to corner the sovereign bond market via interest rates and QE programs. I realize that many will fail to grasp the significance of this so let me explain.

In our current financial system, in which no major currency is backed by Gold or any other finite asset, sovereign bonds represent the bedrock for the system. They are the “risk-free” rate of return or the standard against which all risk assets are valued.

Put simply, Central Banks attempted to corner ALL risk by controlling the baseline against which it was valued.

This created bubbles in literally EVERYTHING: corporate bonds, state bonds, stocks, commodities, real estate, and even tertiary items like passive investing and shorting volatility.

Those who went “all in” on “free money” trades like shorting volatility or risk-parity funds, were in fact simply investing in a derivative of The Everything Bubble: a tertiary bubble in the idea that investing came without pain and was the equivalent of a free lunch.

Here’s the breakdown:

1)   Central Banks created a bubble in the risk-free rate or sovereign bonds, which lead to…

2)   A bubble in stocks as money was forced into risk to find higher returns (the “There Is No Alternative” or TINA) bubble, which lead to…

3)   A bubble in passive investing and shorting volatility… two sides of the same “stocks are never going to fall thanks to Centrals Banks” coin.

Yesterday, two these tertiary bubbles (the passive investing in risk-parity fund bubble and the short volatility bubble) blew up.

This is the beginning of a major market change.

I’m not saying that The Everything Bubble burst yesterday, I’m saying that volatility is back and that the tertiary bubble in passive investing and shorting volatility is over.

We now have to see how the secondary bubble in stocks holds up.

The time to prepare your portfolio is NOW before things really get ugly.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research