The Next Crisis Has Begun

The Next Crisis Has Begun

Last year we predicted that the world had reached peak centralization and that going forward things would begin to fracture.

What is centralization?

Centralization is the process by which the world grows increasingly centralized, relying on Centralized organizations (Central Banks, sovereign governments, etc.) to determine the direction of capital and focus.

From an investment perspective, from 2008 to mid-2014, the primary driving force for the markets was Central Banks. In the US, the S&P 500 tracked the expansion of the Fed’s balance sheet closely.

-1

However, once the US Dollar carry trade began to blow up in mid-2014, this period ended. From that point onwards, the US Dollar was the driving force in the financial system.

How is this possible?

The US Dollar carry trade is $9 trillion in size. To put this in perspective, it is as large as the economies of Japan and Germany combined.

If you’re unfamiliar with the concept of a carry trade, it occurs when you borrow in one currency, usually at a very low interest rate, and then invest the money in another security, whether it be a bond, stock or what have you, that is denominated in another currency.

Everyone from currency traders to emerging market corporations were doing this from 2008 onwards. Emerging Market corporations alone have over $3 trillion in US Dollar dominated bonds outstanding. It those bonds were a country it would be the fifth largest in the world.

Now, a carry trade only works if the currency you borrow stays flat or falls in value. If the currency begins to rally, you blow up VERY quickly as the debt (the money you borrowed) quickly becomes more expensive or less serviceable.

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As a result of this, when a carry trade begins to blow up, a feedback loop quickly hits as those who borrowed in the original currency either A) default B) restructure or C) return the money, forcing the currency even higher which triggers more defaults, restructuring and margin calls.

This is why when the US Dollar began to rally in mid-2014, it went nearly vertical.

sc-5

The first wave of the US Dollar carry trade blowing up crushed commodities and the emerging markets that rely on them for growth. I’m talking about Brazil, Russia, and the like.

However, it is the second wave that will be even more damaging. That wave began last year in August when China was forced to devalue the Yuan against the US Dollar. At that point the US Dollar bull market was no longer forcing individual asset classes to collapse… it was imploding one of the largest economies on the planet.

This crisis has only just begun.

The 1997 Asian Crisis was triggered by Thailand devaluing the baht. Thailand’s economy is the 30th largest in the world. And it nearly blew up all of Asia.

China, by way of contrast, is either the second or third largest economy in the world depending on how you measure it. And it is now actively devaluing the Yuan. Just based on this alone, you can expect this crisis to be significantly larger than the 1997 Asian Crisis.

However, this is just China. Remember there are $9 trillion in US Dollars floating around in various carry trades. So China’s devaluation will be just the tip of the iceberg as every fiat currency in the world derives a portion of its value based on where the US Dollar trades. What’s happening in China will be rippling throughout the system taking down entire countries/ currencies/ and stock markets.

Another Crisis is coming. Smart investors are preparing now.

If you’re an investor who wants to make big money from the markets, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

Over the last 14 months we’ve closed out 61 winning trades. That’s an average of more than FOUR winners per month.

And throughout this period, we’ve not closed a SINGLE loser.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

If you have not seen significant returns from Private Wealth Advisory during those 30 days, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

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Best Regards

Graham Summers

Phoenix Capital Research

 

 

Posted by Phoenix Capital Research in stock collapse?

A Central Banking Insider Just Admitted QE CANNOT Generate Growth…

Last week a Central Banker made the most incredible admission in the history of banking.

It came from the Bank of Japan.

The Bank of Japan has been the leader in global Keynesian insanity. The US Federal Reserve launched its first QE program in 2008. The European Central Bank launched its first QE program in 2015.

The Bank of Japan first launched QE back in 2001.

Since that time the Bank of Japan has implemented QE programs equal to over 50% of Japan’s GDP. This includes its “Shock and Awe” program launched in April 2014: the single largest QE program in history, equal to over 25% of Japan’s GDP.

Suffice to say, Japan and its Central Bankers know more about QE than anyone else in the world. Which is why what happened last week was absolutely incredible.

On Friday, the head of the Bank of Japan, Haruhiko Kuroda stated that Japan has a “potential growth rate of 0.5% or lower.”

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Here is the Head of the Bank of Japan, admitting, in public that QE has little if any ability to generate growth. This is a man who has personally overseen the single largest QE program in history admitting that QE cannot boost GDP growth.

It’s absolutely incredible, particularly coming from a Central Banker.

Throughout the last seven years, whenever the financial markets or global economy began to weaken, the world has looked to Central Bankers to solve the problem. Faith in Central Banking omnipotence was so great, that ECB President “saved” Europe simply by vowing to “do whatever it takes.”

The underlying view here is that there were no problems so great that Central Bankers could not solve them. Even the Central Bankers themselves believed this: Mario Draghi’s next sentence after promising to do “whatever it takes” was “and believe me, it will be enough.”

The Head of the Bank of Japan has just admitted this is untrue.

Haruhiko Kuroda has admitted that there is a limit to potential GDP growth regardless of how much QE and Central Bank employs. He has admitted that Central Bankers might not have the tools required to generate growth.

Investors have yet to realize this because it runs completely contrary to their faith in Central Banks. The illusion of Central Banking omnipotence is so great, that it is going to take months for the world to begin to digest what Haruhiko Kuroda admitted last week.

But when they do, the financial system will adjust. And it will make 2008 look like a picnic.

Remember, in 2008, everyone had 100% confidence in Central Bankers. Moreover, at that time, most Central Banks had only just begun to employ ZIRP and QE to combat the financial crisis.

Today, Central Bankers have engaged in ZIRP and NIRP for years. And they’ve also spent over $14 trillion in QE. And one of them has just admitted he’s virtually out of options… right as the financial system begins to crack under the weight of a debt bubble that is now $20 trillion larger than it was in 2008.

Another Crisis is coming. Smart investors are preparing now.

If you’re an investor who wants to make big money from the markets, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

Over the last 14 months we’ve closed out 54 winning trades. That’s an average of more than FOUR winners per month.

And throughout this period, we’ve not closed a SINGLE loser.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

If you have not seen significant returns from Private Wealth Advisory during those 30 days, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

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Best Regards

Graham Summers

Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?

The Bursting of the Bond Bubble Has Begun Pt 2

As we wrote earlier this week, bursting of the bond bubble has begun.

The decision by Central Banks to “inflate” the system’s debts away post-2008 has resulted in the misallocation of trillions of Dollars of capital.

The worst offenders were Chinese corporates. China has created the single largest mountain of bad debt in the world. Indeed, things are so out of control in China that 45% of all proceeds from new bond issuance are being used just to pay off interest on old loans.

china corps

Chinese firms might be the most out of control when it comes to bond issuance, but they are hardly unique. In the US where corporates have posted four straight years of record bond issuance.

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Over the same time period, the S&P 500 is 0%.

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The bond market is booming again, a sign of investors’ faith in the resilience of the U.S. economy.

U.S. bond sales by companies with good credit ratings hit $103 billion in October, a record for the month, according to deal tracker Dealogic. Corporate-bond sales in the U.S. are on track for their fourth straight annual record, according to data from the Securities Industry and Financial Markets Association.

Source: Wall Street Journal.

Today corporates are more leveraged than they were in 2007. Thus, the Bond Bubble not only encapsulates sovereign nations, but even individual companies. And now that bubble is bursting.

Companies have defaulted on $95bn worth of debt so far this year, with 2015 set to finish with the highest number of worldwide defaults since 2009, according to Standard & Poor’s.

The figures are the latest sign financial stress is beginning to rise for corporate borrowers, led by US oil and gas companies. The rising tide of defaults comes as investors reassess their exposure to companies that borrowed heavily in recent years against the backdrop of central bank policy suppressing interest rates…

Based on the number of defaults in the first three quarters of the year, S&P expects 109 defaults by year-end, the largest total since 268 borrowers ran into problems in 2009. There were only 60 defaults worldwide in 2014.

      Source: Financial Times

The high yield bond or junk bond market was the first to go. It’s already taken out its bull market trendline and is collapsing.

sc

This is just the beginning. The bond bubble will take months to completely implode. And eventually it will consume even sovereign nations. Globally the bond bubble is $100 trillion in size: larger than even global GDP.

Another Crisis is coming. Smart investors are preparing now.

If you’re an investor who wants to make big money from the markets, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

Over the last 14 months we’ve closed out 54 winning trades. That’s an average of more than FOUR winners per month.

And throughout this period, we’ve not closed a SINGLE loser.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

If you have not seen significant returns from Private Wealth Advisory during those 30 days, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

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Best Regards

Graham Summers

Phoenix Capital Research

Posted by Phoenix Capital Research in Debt Bomb
The Bond Bubble Has Begun Bursting

The Bond Bubble Has Begun Bursting

The bursting of the bond bubble has begun.

As I’ve outlined previously the primary concern for Central Banks is the bond bubble. CNBC and other financial media focus on stocks because the asset class is more volatile and so makes for better content, but the foundation of the financial system is bonds. And bonds are THE focus for Central Banks.

In the simplest of terms, the world is awash in too much debt. The bond bubble was close to $80 trillion in size going into 2008. The Central Banks had a choice to either let the defaults hit and clear out the garbage debt from the financial system or attempt to inflate the debts away.

They chose to attempt to inflate the debts away. Put differently, all of their policies were aimed at containing debt deflation… or the process through which debt becomes less and less serviceable leading to eventual insolvency and default.

To whit:

  • Central Banks cut interest rates to zero to make bond payments smaller.
  • Central Banks launched QE and other programs to put a floor beneath bond prices (when bond prices rise, bond yields fall and debt payments become smaller and easier to service).
  • Central Banks provided verbal intervention promising to do “more” or “whatever it takes” whenever bonds came close to ending their bull market.

As a result of this, the financial system has become even more leveraged than it was in 2007 at the beginning of the last debt crisis.

Globally the bond bubble has grown by more than $20 trillion since 2008. Today it is north of $100 trillion, with an additional $555+ trillion in derivatives trading based on it.

Yes, $555 TRILLION, more than seven times global GDP, and more than 10 times the Credit Default Swap market ($50 trillion), which triggered the 2008 Crisis.

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Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is 0%.

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By not allowing the bad debts to clear in 2008, the Central Banks conditioned everyone from consumers to corporations to believe that business cycles could be contained and that the bond bubble/ bull market had not ended.

As a result of this, TRILLIONS of dollars of capital have been misallocated. The evidence is everywhere you look. Corporates around the globe have been issuing record amounts of debt, much of it in US Dollars.

Few of these bonds were high quality. Indeed, globally over 50% of all corporate bonds are now “junk.”

Chinese firms might be the most out of control when it comes to bond issuance, but they are hardly unique. As the below chart reveals, the pace of corporate debt issuance in Emerging Markets worldwide has been extraordinary relative to economic growth.

Today, the Emerging Market corporate bond market is equal to nearly 75% of total Emerging Market GDP. It was at just 50% in 2007 during the last peak!

EM-corp-bonds

H/T Jeroen Blokland

This has also been the case in the US where corporates have posted four straight years of record bond issuance.

Moreover, most of US corporate bond issuance is going towards stock buybacks and financial engineering (massaging results to look better than they are) NOT legitimate expansion.

As a result of this, the financial system today is even more leveraged with more garbage debt than it was going into 2008.

Another Crisis is coming. Smart investors are preparing now.

If you’re an investor who wants to make big money from the markets, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

Over the last 14 months we’ve closed out 48 straight winning trades. That’s an average of nearly FOUR winners per month.

And throughout this period, we’ve not closed a SINGLE loser.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

If you have not seen significant returns from Private Wealth Advisory during those 30 days, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Phoenix Capital Research

 

Posted by Phoenix Capital Research in Debt Bomb
The Fed Continues Giving Money to Wall Street Even Without QE

The Fed Continues Giving Money to Wall Street Even Without QE

Stocks will likely rally this week for the simple reason that it is options expiration week.

 

The Fed almost always gives Wall Street extra money to play around with during options expiration.

 

  • On average the Fed expands its balance sheet by $9.1 billion during options expiration weeks (expansions means money flows into Wall Street banks).

 

  • During non-options expiration weeks, the Fed contracts its balance sheet by an average of $2.5 billion.

 

Below is a table charting changes in the Fed’s balance sheet. Options expiration weeks are gray.

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We have a success rate of 72% meaning we make money on more than seven out of 10 trades.

Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is 0%.

That’s correct, with minimal risk, we are outperforming the S&P 500 by 35%… and the year isn’t even over yet! Heck, we just closed out another 35% winner yesterday!

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fed balance sheet

Mind you, this is during a period in which the Fed is not engaged in Quantitative Easing or any other major monetary program. And yet… it still feels the need to hand off an average of $9 billion or so to Wall Street every time options expiration rolls around.

Note also, that the Fed gave Wall Street money almost every week during December. For some reason Janet Yellen felt the need to expand the Fed’s balance sheet by $18 billion during the last month of a year in which most fund managers had performed terribly.

Despite this obvious gift to Wall Street, stocks finished 2015 DOWN. It was the first down year stock have experienced since 2008. And by the looks of the below chart, it’s only going to get worse in 2016!

sc

If you’re an investor who wants to make big money from the markets, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

Over the last 14 months we’ve closed out 48 straight winning trades. That’s an average of nearly FOUR winners per month.

And throughout this period, we’ve not closed a SINGLE loser.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

If you have not seen significant returns from Private Wealth Advisory during those 30 days, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?
Are Stocks About to Crash?

Are Stocks About to Crash?

The stocks futures markets are off the lows from last week as traders are playing for the usual Monday rally.

However, the fact remains that the technical damage from last week’s breakdown has been SEVERE. Stocks even violated the “neckline” on the Head and Shoulders pattern they’ve carved out since early 2014.

GPC110161

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The Single Best Options Trading Service on the Planet

Our options service THE CRISIS TRADER is absolutely KILLING it.

We have a success rate of 72% meaning we make money on more than seven out of 10 trades.

Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is 0%.

That’s correct, with minimal risk, we are outperforming the S&P 500 by 35%… and the year isn’t even over yet! Heck, we just closed out another 35% winner yesterday!

Our next goes out tomorrow morning… you can get it and THREE others for just 99 cents.

To take out a $0.99, 30 day trial subscription to THE CRISIS TRADER…

CLICK HERE NOW!!!

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In the very simplest of terms, stocks need to go almost vertical RIGHT NOW if the bull market started 2009 is not over.

I cannot stress this enough: stocks are in BIG trouble.

GPC110162

If you’re an investor who wants to make big money from the markets, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

Over the last 14 months we’ve closed out 47 straight winning trades. That’s an average of nearly FOUR winners per month.

And throughout this period, we’ve not closed a SINGLE loser.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

If you have not seen significant returns from Private Wealth Advisory during those 30 days, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Phoenix Capital Research

 

Posted by Phoenix Capital Research in It's a Bull Market
Stocks Are in BIG Trouble

Stocks Are in BIG Trouble

Stocks are rallying into the open. However, the technical damage of the last week has been severe.

The S&P 500 crashed through its trendline (blue line). It also crashed through critical support established by the bounces in September and October (green line).

18161

We might get a bounce here to retest that green line, but unless a major Central Bank launches a new monetary program stocks are heading DOWN.

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Our options service THE CRISIS TRADER is absolutely KILLING it.

We have a success rate of 72% meaning we make money on more than seven out of 10 trades.

Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is 0%.

That’s correct, with minimal risk, we are outperforming the S&P 500 by 35%… and the year isn’t even over yet! Heck, we just closed out another 35% winner yesterday!

Our next goes out tomorrow morning… you can get it and THREE others for just 99 cents.

To take out a $0.99, 30 day trial subscription to THE CRISIS TRADER…

CLICK HERE NOW!!!

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Indeed, in the BIG Picture it looks more and more like the bull market for stocks is over. The last hope for the bulls is that we hold critical support on the monthly S&P 500 (the green line). Otherwise it’s GAME OVER.

18162

Smart investors are preparing now.

If you’re an investor who wants to increase your wealth dramatically, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

To whit, over the last 12 months we’ve closed 47 straight winning trades.

That correct, during ALL of 2015, we’ve not closed a SINGLE LOSER.

And if you go back further, 53 of our last 54 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

During that time, you’ll receive over 50 pages of content… along with investment ideas that will help make you money… ideas you won’t hear about anywhere else.

If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

 

 

 

 

 

Posted by Phoenix Capital Research in stock collapse?
The Bull Market is Very Likely Over

The Bull Market is Very Likely Over

Dear Investor,

Stocks are crashing before the market’s

open.

As I warned earlier this week… it’s very

likely that the Bull Market in stocks is over.

Indeed, the breakdown is actually MUCH bigger than most investors

realize. We’ve actually broken THE bull market line that goes all

the way back to 2009!

1516.png

If you are not preparing for a bear market in stocks, you

NEED to do so NOW.

I can show you how.

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WE HAVEN’T CLOSED A SINGLE
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Posted by Phoenix Capital Research in It's a Bull Market
Market Warning: the FANGs Are Beginning to Break Down…

Market Warning: the FANGs Are Beginning to Break Down…

The FANGs are beginning to break down.

FANG is an acronym that stands for Facebook, Amazon, Netflix, Google.

These are four of the top performing stocks of 2015. Netflix was the top stock for the S&P 500 returning 134% in 2015. Amazon was #2, returning 118%. Google returned 44% and Facebook returned 34%.

In very simple terms, these are the big market leaders. And now all of them are beginning to break down.

Facebook (FB) is testing critical support. Below this the long-term bull market trendline at sub-100.

FB

Amazon (AMZN) has just taken out support. We’re likely to test to the bull market trendline running back to early 2015.

AMZN

———————————————————————–

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Our options service THE CRISIS TRADER is absolutely KILLING it.

We have a success rate of 72% meaning we make money on more than seven out of 10 trades.

Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is 0%.

That’s correct, with minimal risk, we are outperforming the S&P 500 by 35%… and the year isn’t even over yet! Heck, we just closed out another 30% winner yesterday!

Our next goes out tomorrow morning… you can get it and THREE others for just 99 cents.

To take out a $0.99, 30 day trial subscription to THE CRISIS TRADER…

CLICK HERE NOW!!!

———————————————————————–

Netflix (NFLX) has broken its bull market trendline and is coming up against key support.

NFLX

And finally Google (GOOG) is testing key support. Below this is nothing until 700.

GOOG

All four of these are sporting ugly charts. Keep an eye on them as former market leaders (and hedge fund darlings) they have critical importance for gauging the general market’s momentum.

Speaking of which, I’ll leave you with this long-term chart of the S&P 500.

sc

If you’re an investor who wants to increase your wealth dramatically, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

To whit, over the last 12 months we’ve closed 45 straight winning trades.

That correct, during ALL of 2015, we’ve not closed a SINGLE LOSER.

And if you go back further, 51 of our last 52 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

During that time, you’ll receive over 50 pages of content… along with investment ideas that will help make you money… ideas you won’t hear about anywhere else.

If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

Posted by Phoenix Capital Research in It's a Bull Market

THREE Reasons Stocks Will Crater in 2016

Happy New Year!

Last year (2015) likely will represent the top for the bull market that began in 2009. Stocks finished the year down, representing the first down year since the March 2009 bottom.

Many analysts will point to the August sell-off as the reason stocks performed so badly, however, looking at the chart, stocks struggled throughout the year, long before the August sell-off. Indeed, at best the S&P 500 was up 3% for the year!

GPC1416

Things are only going to worsen from here.

Firstly, the US Federal Reserve is now tightening. From 2009-2015, the Fed was always implementing loose monetary policies whether it by through QE, Operation Twist, or simply juicing the markets during options expiration weeks.

No longer. The Fed is now raising rates. This will be a major issue for stocks going forward.

Secondly, the US economy is back in recession.

———————————————————————–

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I don’t care what the Mainstream media says, based on the cold hard data points stripped of accounting gimmicks, the US entered a recession last year. This is backed up by:

  • The High Yield Bond market is pricing in a recession.
  • The Credit Markets are pricing in a recession.
  • US inventories hit levels associated with recessions.
  • The ISM manufacturing index is at recession levels.

With the Fed tightening, the recessionary drop is only going to accelerate.

Finally, corporate profits relative to GDP are at their record high and rolling over.

GPC14162

Corporate growth can be generated via three ways:

  • Economic growth
  • Financial Engineering (stock buybacks and other profit boosting gimmicks)
  • Increased productivity

With the US back in recession and the Fed tightening, both #s 1 and 2 are over. This leaves #3. And while productivity did increase marginally in first half of 2015, it’s now rolling over again towards 0%.

In short, the sources of growth for US corporates have all dried up. Stocks have yet to adjust to this, but when they do it’s going to be an all out collapse.

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To whit, over the last 12 months we’ve closed 40 straight winning trades.

That correct, during ALL of 2015, we’ve not closed a SINGLE LOSER.

And if you go back further, 46 of our last 47 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

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If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?

Will 2016 Bring Another 2008-Type Crash? Pt. 1

The world is lurching towards another Crash.

Japan, which has been ground zero for Keynesian insanity, is back in technical recession. This comes after the Bank of Japan launched the single largest QE program in history: a QE program equal to 25% of GDP launched in April 2013.

This program bought an uptick in economic growth for just six months before Japan’s GDP growth rolled over again. Similarly, an expansion of QE in October 2014 pulled Japan back from the brink, but GDP growth collapsed again soon after, plunging the country into technical recession earlier this year.

japan-gdp-growth

Japan is completely insolvent. The country has no choice but to continue to implement QE or else it will go crash in a matter of months. However, with the Bank of Japan already monetizing ALL of the country’s debt issuance, the question arises, “just what else can it buy?”

We’ll find out in 2016. But Japan is now officially in the End Game from Central Banking.

Europe is not far behind.

———————————————————————–

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The ECB has cut interest rates to negative, cut them further into negative, launched a QE program, and then cut interest rates even further into negative while extending its QE program.

EU GDP growth has flat-lined at barely positive.

european-union-gdp-growth

But the economy is having serious difficulty fending off deflation.

When your ENTIRE banking system is leveraged by 26 to 1, as is Europe’s, even a 4% drop in asset values renders the system insolvent. Without significant inflation, the EU’s banking system will crash.

european-union-inflation-rate-1

ECB President Draghi better have more in his bazooka that what he’s fired so far, or the EU’s $46 trillion banking system will crash. However, as is the case with the Bank of Japan, the ECB is facing a shortage of viable assets to buy.

Between these two banking systems alone, you’ve got the makings of a global financial crisis at least on par with 2008. Both countries are sinking into deflation at a time when their respective Central Banks have little if any ammo left.

If you’re an investor who wants to increase your wealth dramatically, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

To whit, we just closed out two new double digit winners yesterday, bringing us to 40 straight winning trades over the last 12 months.

That correct, during the last year, we’ve not closed a SINGLE LOSER.

And if you go back further, 46 of our last 47 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

During that time, you’ll receive over 50 pages of content… along with investment ideas that will help make you money… ideas you won’t hear about anywhere else.

If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

 

 

Posted by Phoenix Capital Research in stock collapse?

The Fed’s Academic-Based Theories Are Creating a BRUTAL Economic Reality

One of the most frustrating aspects of today’s financial system is the fact that the Fed is being lead by lifelong academics with no real world banking or business experience.

Consider the cases of Ben Bernanke and Janet Yellen.

Neither of these individuals has ever created a job based on generating sales of any kind. Neither of them has ever had to make payroll. Neither of them has ever run a business. What are economic realities for business owners (e.g. operating costs, capital and profits) are just abstract concepts for Bernanke and Yellen.

Moreover, there is a particular problem with academic economists. That problem is that a major percentage of their “research” is total bunk made up in order to make tenure.

This is not our opinion… it is fact based on research published by the Fed itself.

According to a paper published by researchers from THE FEDERAL RESERVE BOARD, it was not possible to replicate even HALF of the results found in economics papers EVEN WITH THE ASSISTANCE OF THE INDIVIDUALS WHO WROTE THE PAPER.

Let’s repeat that: even with the help of those who claimed to have found the results, the results were not replicable.

There is a word for a result that is not replicable. It’s imaginary.

This might go a long ways towards explaining how individuals like Ben Bernanke and Janet Yellen can continue to say with a straight face that they have a grip on the economy, when the results show that they are either completely lost or being dishonest.
———————————————————————–

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Consider the Fed’s unemployment target for raising rates.

Back in 2012, the Fed claimed it would start to raise rates when unemployment fell to 6.5%. We hit that target in April 2014. The Fed didn’t raise rates for another 20 months.

One wonders, just what was the legitimacy of the Fed’s “target” for raising rates. How on earth can you make a target, then move the target for nearly two more years and claim the target was even remotely accurate?

More importantly, if the Fed’s economic models suggested raising rates when unemployment was 6.5% and the Fed didn’t raise rates until unemployment was at 5% (a full 20 months later)… just how accurate are these models?

We might be nitpicking here, but if the models in question are being used to steer the US economy, there is an awful lot at stake here.

Let’s take a look at what happens when the Fed’s theories connect with the real world.

The Fed claims it cut rates to ZERO to boost the economy. The theory here is that if capital becomes cheaper, corporates and consumers will spend more, creating more jobs.

Unfortunately this is not how the real world works. For consumers, excessive debt is deflationary in nature in that at some point you are so in debt that making your debt load more serviceable accomplishes next to nothing in terms of solvency/ spending power.

Moreover, ZIRP is deflationary in nature for savers and those who rely on interest income because it makes them concerned about future returns on their capital. As a result of this, they tend to hoard their cash, not spend it.

The only individuals who benefit from ZIRP are the very wealthy and corporates, because both can use their assets to leverage up. And this is precisely what has happened.

We are currently on track for our FOURTH straight RECORD year for corporate bond issuance.

Why is this bad?

Because A) it means corporations are going massively in debt and B) they are doing this NOT to expand operations (economic growth doesn’t warrant this) but to issue buybacks and dividends.

With rates at zero, executives are leveraging up to generate shareholder returns. This works great in the short-term, but there is hell to pay down the road. And unfortunately we’re there.

Today US corporates are more leveraged than at any other point in history, including the Tech Bubble.

leverage

H/T Societe General

This is what happens when the Fed’s academic-based nonsense collides with economic realities: perversions of capital that lead to massive bubbles and eventually even more massive crises.

The Fed fueled the Tech Bubble, which lead to the Tech Crash.

It then fueled the Housing Bubble, which lead to the Housing Crash and 2008.

And now it’s created an ever bigger bubble that that.

Which means.,.

We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work. They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.

If you’re an investor who wants to increase your wealth dramatically, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

To whit, we just closed out two new double digit winners yesterday, bringing us to 40 straight winning trades over the last 12 months.

That correct, during the last year, we’ve not closed a SINGLE LOSER.

And if you go back further, 46 of our last 47 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

During that time, you’ll receive over 50 pages of content… along with investment ideas that will help make you money… ideas you won’t hear about anywhere else.

If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?

Deflation is Back… Will It Lead to Another Crash?

Central Bankers are flummoxed.

Having cut interest rates over 600 times since 2009 (and printed over $15 trillion), they’ve yet to generate the expected economic growth.

Despite these failures, the ECB, and the Bank of Japan are currently engaging massive QE programs. The Fed is the only major Central Bank not rapidly expanding its balance sheet.

Why, after six years, are we still seeing such aggressive policies?

Because deflation, the bad kind, is once again lurking around the corner.

Anyone with a functioning brain knows that deflation is a good thing. No one complains when they are able to buy something at a lower price, whether it is a home, gasoline, or computer.

However, debt deflation is a different story. Debt deflation means that future debt payments are becoming more expensive. This means that debt servicing will become more difficult, eventually leading to default and debt restructuring.

It is debt deflation that remains the primary focus for the global Central Banks. Indeed, if you consider the threat of debt deflation, every Central Bank move makes sense. ZIRP, NIRP, and QE all have the same goal in mind: to lower interest rates and push bonds higher (thereby making sovereign debt loads more serviceable).

With this in mind, even a whiff of debt deflation is enough to give Central Bankers nightmares. It’s also why they are so fond of inflation via currency devaluation, as it permits them to render massive debt loads more serviceable.

Unfortunately, the great “reflation experiment” is failing. Indeed, as Societe General has noted, it appears the developed world may be “turning Japanese” i.e. moving into a long-term deflationary cycle similar to that which has plagued Japan for the last 20 years.

———————————————————————–

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Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is FLAT (0%).

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———————————————————————–

To whit, inflation expectations are collapsing globally.

In Europe, despite three cuts into NIRP, the announcement of QE and an extension of QE, inflation is barely positive at 0.2%.

euro-area-inflation-cpi-1

Then of course there is the US.

There, one of the better measures of inflation expectations is the 5 Year, 5-Year Forward Inflation Expectation Rate. That is simply a long way of saying that this chart measures where investors expect inflation to be in five years… and running for five years after that date.

GPC1221152
As you can see, inflation expectations have collapsed in the latter half of 2015. Post-2008, any time this measure has fallen below the Fed’s desired threshold of 2%, it has launched a new monetary policy. In 2010 it was QE 2. In 2011 it was Operation Twist.

We’re now well below that level. And this is AFTER six years of ZIRP and $4 trillion in QE!

Deflation is back… and as it rears its head again in the west, Western Central Banks will soon be forced to answer the question.

Can we actually stop deflation?

Unfortunately for them, the answer is likely no.

Consider Japan.

Japan has engaged in NINE QE programs since 1990. Since that time, the country’s GDP growth has been anemic at best. Indeed, even its latest MASSIVE QE program (a single monetary program equal to 25% of Japan’s GDP) only boosted Japan’s GDP for two quarters before growth rolled over again. Indeed, Japan is once again back in technical recession as of our writing this.

japan-gdp-growth

The reality is slowly beginning to sink in that Central Banks cannot put off the business cycle. They’ve spent over $15 trillion and cut interest rates over 600 times and all they’ve generated is one of the weakest recoveries on record.

What happens the next time global GDP takes a nosedive when Central Banks have already used up all of their ammunition?

Two works: Markets Crash.

If you’re an investor who wants to increase your wealth dramatically, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

To whit, we just closed out two new double digit winners yesterday, bringing us to 40 straight winning trades over the last 12 months.

That correct, during the last year, we’ve not closed a SINGLE LOSER.

And if you go back further, 46 of our last 47 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

During that time, you’ll receive over 50 pages of content… along with investment ideas that will help make you money… ideas you won’t hear about anywhere else.

If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

Posted by Phoenix Capital Research in Debt Bomb, stock collapse?

Take Note: Globally Bull Markets Are Ending

Central Banks are beginning to lose control.

Indeed, despite recent promises to do more by the Bank of Japan, the Nikkei is rapidly losing momentum.
GPC 1218151
In Europe, the situation is worse. There the ECB has already cut interest rates to negative THREE times, launched QE and already extended said QE.

Still, EU stocks are rolling over and testing their bull market trendline.

GPC1218152

———————————————————————–

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Our options service THE CRISIS TRADER is absolutely KILLING it.

We have a success rate of 72% meaning we make money on more than seven out of 10 trades.

Even if you include ALL of our losers, we are up 35% year to date.

Over the same time period, the S&P 500 is FLAT (0%).

That’s correct, with minimal risk, we are outperforming the S&P 500 by 35%… and the year isn’t even over yet! Heck, we just closed out another 30% winner earlier this week!

Our next goes out shortly… you can get it and THREE others for just 99 cents.

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CLICK HERE NOW!!!

———————————————————————–

Finally, there’s the US where the Central Bank is no longer easing but is in fact raising rates. There the markets have ALREADY taken out their bull market trendline.

GPC1218153
Are you ready for a bear market?

If you’re an investor who wants to increase your wealth dramatically, then you NEED to take out a trial subscription to our paid premium investment newsletter Private Wealth Advisory.

Private Wealth Advisory is a WEEKLY investment newsletter with an incredible track record.

To whit, we just closed out two new double digit winners yesterday, bringing us to 40 straight winning trades over the last 12 months.

That correct, during the last year, we’ve not closed a SINGLE LOSER.

And if you go back further, 46 of our last 47 trades have made money.

In fact, I’m so confident in my ability to pick winning investments that I’ll give you 30 days to try out Private Wealth Advisory for just 98 CENTS.

During that time, you’ll receive over 50 pages of content… along with investment ideas that will help make you money… ideas you won’t hear about anywhere else.

If you have not seen significant returns from Private Wealth Advisory during those 30 day, just drop us a line and we’ll cancel your subscription with no additional charges.

All the reports you download are yours to keep, free of charge.

To take out a $0.98, 30-day trial subscription to Private Wealth Advisory…

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist
Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?

The Fed Rate Hike Will Trigger a $9 Trillion Meltdown

Yesterday, the Fed has hiked interest rates from 0.25% to 0.5%.

It is the first rate hike in 10 years. And it is now clear that the Fed is not only behind the ball in terms of raising rates… but that it has now primed the financial system for another 2008-type meltdown.

By way of background we need to consider the relationship between the US Dollar and the Euro.

The Euro comprises 56% of the basket of currencies against which the US Dollar is valued. As such, the Euro and the Dollar have a unique relationship in which whatever happens to the one will have an outsized impact on the other.

Here’s why the Fed’s decision to raise rates will implode the financial system.

In June 2014 the ECB cut interest rates to negative. Before this, the interest rate differential between the Euro and the US Dollar was just 0.25% (the US Dollar was yielding 0.25% while the deposit rate on the Euro was at exactly zero).

While significant, the interest rate differential was not enough to kick off a complete flight of capital from the Euro to the US Dollar. However, when the ECB launched NIRP, cutting its deposit rate to negative 0.1%, the rate differential (now 0.35%) and punitive qualities of NIRP (it actually cost money to park capital in the Euro) resulted in vast quantities of capital fleeing Euros and moving into the US Dollar.

Soon after, the US Dollar erupted higher, breaking out of a multiyear triangle pattern and soaring over 25% in a matter of nine months.

GPC1217151To put this into perspective, this move was larger in scope than the “flight to safety” that occurred in 2008 when everyone thought the world was ending.

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———————————————————————–

The reason this is problematic?

There are over $9 trillion in borrowed US Dollars sloshing around the financial system. And much of it is parked in assets that are denominated in emerging market currencies (the very currencies that have imploded as the US Dollar rallied).

This is the US Dollar carry trade… and it is larger in scope that the economies of Germany and Japan… combined.

In short, when the ECB cut rates to negative, the US Dollar carry trade began to blow up. The situation only worsened when the ECB cut rates even further into negative territory in September 2014 and again last week bringing the rate differential between the US Dollar and Euro to 0.55%.

Now, the Fed has raised interest rates to 0.5%. This has made the interest rate differential between the Euro and the US Dollar 0.75%. This will trigger a complete implosion of the $9 trillion US Dollar carry trade.

This is a long-term, multi-decade chart of the US Dollar.

GPC121715As you can see it has just broken out of the largest falling wedge pattern in monetary history. The chart predicts that during the next leg up, the US Dollar will rally to 120 or even 130.

At that point, the $9 trillion US Dollar carry trade will implode triggering a 2008-type event. Our timeline for this is within the next 12 months.

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Private Wealth Advisory subscribers are already profiting from the markets, having just closed THREE more winners yesterday, bringing us to a FORTY THREE trade winning streak…

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Private Wealth Advisory is a WEEKLY investment newsletter that can help you  profit from the markets. Every week you get pages of high quality editorial presenting market conditions and outlining the best trades to make to profit from them.

It is the only newsletter to have closed 72 consecutive winning trades in a 12 month period (ZERO losers during that time). And we just began another winning streak last year, already racking up 43 straight winners.

And we’ve only closed ONE loser in the last FOURTEEN MONTHS.

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CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted by Phoenix Capital Research in Debt Bomb, stock collapse?

Stocks Could HALVE Based on the True State of the Economy

Since 2009, the global markets have been largely steered by Central Bank policy, NOT organic economic growth. With the debt-based monetary system dangerously close to shutting down during the 2008 meltdown, Central Banks stepped in as the “buyers of last resort” to provide a backstop to the system.

The problem is that the individuals running the Central Banks are prone to human hubris, specifically overconfidence in the validity of their opinions and abilities. Since most Central Bankers are Keynesian economists at heart, they believe that granting Central Banks MORE power is always a good thing.

Thus, rather than stepping back once the Crisis had passed (2011-2012), Central Banks continued to prop up the markets and push for greatest Centralization of the global economy.

As a result of this, the initial distortions in the capital markets induced by QE and Zero Interest Rate Policy (ZIRP) became systemic in nature. Investors no longer bought assets based on perceived value relative to the real economy. Rather, they bought based on perceived Central Bank actions and promises.

The most egregious example of this pertains to the sovereign bond market where investors began to front-run Central Bankers QE programs.

Indeed, the promise of “more QE” was one of the most powerful tools in Central Banks’ belts. Mind you, it was the promise of QE, not the QE itself that had the biggest impact on bonds.

Consider what happened in 2010.

QE 1 ended in June 2010. Soon after, the Fed began to hint at launching a new program, QE 2. Bonds rallied hard throughout this period as investors bought bonds to front-run the upcoming program. Once QE 2 was actually launched, bonds FELL.

UST1———————————————————————–

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For that reason, we’ve launched a special options trading service designed specifically to profit from the coming crisis.

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To take out a $0.99, 30 day trial subscription to THE CRISIS TRADER...

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———————————————————————–

This was a classic case of “buy the rumor, sell the fact.”

In plain terms, the bond market’s risk profile was skewed not only by Central Bank policy… it was skewed by the promise and hope of additional policy. Indeed, the largest bond moves occurred BEFORE QE 2 and Operation Twist were announced.

Below is a chart showing the performance of the 10-Year Treasury. Periods in which the Fed was actively engaged in QE or Operation Twist are white. Periods in which the Fed was hinting at or promising additional policies are in green. Note that the largest bond rallies (meaning yields fell) occurred during periods in which the Fed was PROMISING to do more, as opposed to actually DOING anything.

UST

And since the Fed began hinting at additional policy soon after any actual policy ended, the bond markets became permanently skewed as investors were continuously reacting to hype and hope more than economic realities.

The implications of this are tremendous. Modern financial theory dictates that sovereign bonds, particularly, US Treasuries, are the only true “risk free” rate of return in the current financial system. ALL other asset classes trade based on where sovereign bonds, particularly US Treasuries trade.

So if the US Treasury market’s risk profile becomes skewed by Central Bank policy (and verbal interventions in the form of promises of additional monetary policy), the entire financial system’s risk profile becomes skewed.

Stocks (both developed and emerging), commodities, corporate bonds, muni bonds… EVERYTHING was skewed based on the fact that the sovereign bond market was pricing risk based on Central Bank policy rather than economic reality.

We’ve already gotten a taste of what happens when asset classes finally “adjust” to underlying “demand” with the commodity markets: having operated based on Central Bank money printing for five years, they then wiped out ALL of those gains in six months as they adjusted to the economic realities of a weak global economy.

CRB

Developed stock markets have yet to make a similar adjustment, but they will… and when they do, it will be a DOOZY.

sc

Smart investors are preparing now.

Private Wealth Advisory subscribers are already profiting from the markets, having just closed THREE more winners yesterday, bringing us to a FORTY THREE trade winning streak…

What is Private Wealth Advisory?

Private Wealth Advisory is a WEEKLY investment newsletter that can help you  profit from the markets. Every week you get pages of high quality editorial presenting market conditions and outlining the best trades to make to profit from them.

It is the only newsletter to have closed 72 consecutive winning trades in a 12 month period (ZERO losers during that time). And we just began another winning streak last year, already racking up 43 straight winners.

And we’ve only closed ONE loser in the last FOURTEEN MONTHS.

You can try Private Wealth Advisory for 30 days (1 month) for just $0.98 cents.

However, this offer will be expiring tomorrow at midnight. I cannot maintain a track record of over a YEAR of straight winners with thousands and thousands of investors following these recommendations.

To take out a $0.98 30-day trial subscription to Private Wealth Advisory… and lock in one of the few remaining slots….

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?

The Fuse on the Global Debt Bomb Has Just Been Lit

The global bond bubble has begun bursting.

This process will not be fast by any means.

Central Banks and the political elite will fight tooth and nail to maintain the status quo, even if this means breaking the law (freezing bank accounts or funds to stop withdrawals) or closing down the markets (the Dow was closed for four and a half months during World War 1).

There will be Crashes and sharp drops in asset prices (20%-30%) here and there. However, history has shown us that when a financial system goes down, the overall process takes take several years, if not longer.

By way of example let us consider the details surrounding the Tech Bubble: the single largest stock market bubble of the last 100 years. In this case, the Bubble pertained to just one asset class (stocks). In fact, the bubble was relatively isolated to one specific sector, Tech Stocks.

And to top if off, it was absolutely obvious to anyone that it was a Bubble: note that the Cyclical Adjusted Price to Earnings or CAPE ratio for the Tech Bubble dwarfed all other bubbles dating back to 1890.

CAPEStocks were so obviously overvalued that it was truly absurd.

And yet, despite the fact that this bubble was absolutely obvious and involved only one asset class, it still took investors well over six months after the initial 20% crash to realize that the top was in and the bubble had burst.

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Let that sink in for a moment. Stocks were clearly in a bubble. Indeed, it was literally THE stock bubble of the last 100 years. And yet, when it burst, there was no clear consensus as to where the market was heading.

My point with all of this is that even when the bubble was both very specific AND obvious, the collapse was neither quick nor clean. There were several large 20%+ crashes, but overall, it was a roller coaster with jarring rallies than gradually wore its way down.

And when you extend the collapse from peak to bottom, the whole collapse took nearly three years.

To return to my initial point: the coming collapse in the financial markets will take its time. This is particularly true this time around because the bubble pertains to bonds: the senior-most asset class in the financial system.

By way of explanation, let’s consider how the current monetary system works…

The current global monetary system is based on debt. Governments issue sovereign bonds, which a select group of large banks and financial institutions (e.g. Primary Dealers in the US) buy/sell/ and control via auctions.

These financial institutions list the bonds on their balance sheets as “assets,” indeed, the senior-most assets that the banks own.

The banks then issue their own debt-based money via inter-bank loans, mortgages, credit cards, auto loans, and the like into the system. Thus, “money” enters the economy through loans or debt. In this sense, money is not actually capital but legal debt contracts.

Because of this, the system is inherently leveraged (uses borrowed money).

Consider the following:

  • Total currency (actual cash in the form of bills and coins) in the US financial system is little over $1.2 trillion.
  • If you want to include money sitting in short-term accounts and long-term accounts the amount of “Money” in the system is about $10 trillion.
  • In contrast, the US bond market is well over $38 trillion.
  • If you include derivatives based on these bonds, the financial system is north of $191 trillion.

Bear in mind, this is just for the US.

Again, debt is money. And at the top of the debt pyramid are sovereign bonds: US Treasuries, German Bunds, Japanese Government Bonds, etc. These are the senior most assets used as collateral for interbank loans and derivative trades. THEY ARE THE CRÈME DE LA CRÈME of our current financial system.

So, this time around, when the bubble bursts, it won’t simply affect a particular sector or asset class or country… it will affect the entire system.

So…. the process will take considerable time. Remember from the earlier pages, it took three years for the Tech Bubble to finally clear itself through the system. This time it will likely take as long if not longer because:

  • The bubble is not confined to one country (globally, the bond bubble is over $100 trillion in size).
  • The bubble is not confined to one asset class (all “risk” assets are priced based on the perceived “risk free” valuation of sovereign bonds… so every asset class will have to adjust when bonds finally implode).
  • The Central Banks will do everything they can to stop this from happening (think of what the ECB has been doing in Europe for the last three years)
  • When the bubble bursts, there will very serious political consequences for both the political elites and voters as the system is rearranged.

The size of the bond bubble alone should be enough to give pause.

However, when you consider that these bonds are pledged as collateral for other securities (usually over-the-counter derivatives) the full impact of the bond bubble explodes higher to $555 TRILLION.

To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).

On that note, we should point that the fuse is already lit on the global debt bomb. Emerging Market bonds taking out their bull market trendline.

GPC1215151Junk bonds are also in the process of ending their multi-year bull market.

GPC1215152The bursting of the bond bubble has begun. This process will take months to unfold and it will culminate in a stock market crash.

Private Wealth Advisory subscribers are already profiting from the markets, having just closed THREE more winners yesterday, bringing us to a FORTY THREE trade winning streak…

What is Private Wealth Advisory?

Private Wealth Advisory is a WEEKLY investment newsletter that can help you  profit from the markets. Every week you get pages of high quality editorial presenting market conditions and outlining the best trades to make to profit from them.

It is the only newsletter to have closed 72 consecutive winning trades in a 12 month period (ZERO losers during that time). And we just began another winning streak last year, already racking up 43 straight winners.

And we’ve only closed ONE loser in the last FOURTEEN MONTHS.

You can try Private Wealth Advisory for 30 days (1 month) for just $0.98 cents.

However, this offer will be expiring tomorrow at midnight. I cannot maintain a track record of over a YEAR of straight winners with thousands and thousands of investors following these recommendations.

To take out a $0.98 30-day trial subscription to Private Wealth Advisory… and lock in one of the few remaining slots….

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted by Phoenix Capital Research in Debt Bomb, stock collapse?

Stocks Will Fall Anywhere From 17%-50% Depending on the Fed’s Response

A major long-term momentum indicator is flashing, “sell.”

Based on the historical significance of this indicator we may be putting in a top and possibly THE top for the bull market that began 2009.

The indicator concerns the monthly moving average convergence divergence or MACD.

For those of you who like technical analysis, this indicator is formed by two interweaving lines.

The first line (usually black on the chart) is formed by subtracting the 26-month exponential moving average (EMA) from the 12-month EMA.

So if the 26-month EMA is 12 and 12-month EMA is 10, the black line would be at 2 for that particular day.

The second line (usually red on the chart) is formed by the 9-month exponential moving average.

The “signals” come when the two lines connect:

  1. Anytime the black line breaks above the red line, it triggers a “buy” signal.
  1. Anytime the black line breaks below the red line, it triggers a “sell” signal.

“Sell” signals usually coincide with market tops forming. They also trigger when bull markets END.

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The Opportunity to Make Triple If Not QUADRUPLE Digit Gain is Here

The largest investor fortunes in history were made during crises.

For that reason, we’ve launched a special options trading service designed specifically to profit from the coming crisis.

It’s called THE CRISIS TRADER and already it’s locking in triple digit winners including gains of 151%, 182%, 261% and even 436%!

And the REAL crisis hasn’t even started yet!

We have an success rate of 72%(meaning you make money on more than 7 out of 10 trades)…and thanks to careful risk control, we’re outperforming the S&P 500 by over 50%!

Our next trade is going out shortly… you can get it and THREE others for just 99 cents.

To take out a $0.99, 30 day trial subscription to THE CRISIS TRADER...

CLICK HERE NOW!!!

———————————————————————–

I’ve labeled the “sell” signals on the monthly chart of the S&P 500 below. We are using the monthly chart because we’re most concerned with timing when a multi-year bull market ends, NOT intermediate swings in price.

MACDAs you can see, this signal has been fairly accurate for picking tops.

Of course it’s more of an art than a science when it comes to timing the end of a bull market (two of the “sell” signals hit on short-term tops in 1998 and 2011, as opposed to the ultimate market tops which came later).

However, it is worth noting that even during those periods in which “sell” signals only coincided with temporary tops (1998 and 2011), BOTH times stocks staged a dramatic collapse before beginning their next leg up.

In 1998, when the “sell” signal triggered, stocks dropped nearly 20%.

In 2011, when the “sell” signal triggered, stocks fell 17% and the Fed announced Operation Twist to try and prop the markets up.

Moreover, the other times that this indicator registered a “sell signal” (the times when it coincided with THE top for stocks) the markets fell 50% and 57% respectively.

So the fact a “sell” signal is hitting now is of massive importance. It tells us that momentum is falling and we can expect a sizable correction in stocks at the very least and a Crash at the very worst.

Smart investors are preparing now.

Private Wealth Advisory subscribers are already profiting from the markets, having just closed THREE more winners yesterday, bringing us to a FORTY THREE trade winning streak…

What is Private Wealth Advisory?

Private Wealth Advisory is a WEEKLY investment newsletter that can help you  profit from the markets. Every week you get pages of high quality editorial presenting market conditions and outlining the best trades to make to profit from them.

It is the only newsletter to have closed 72 consecutive winning trades in a 12 month period (ZERO losers during that time). And we just began another winning streak last year, already racking up 43 straight winners.

And we’ve only closed ONE loser in the last FOURTEEN MONTHS.

You can try Private Wealth Advisory for 30 days (1 month) for just $0.98 cents.

However, this offer will be expiring tomorrow at midnight. I cannot maintain a track record of over a YEAR of straight winners with thousands and thousands of investors following these recommendations.

To take out a $0.98 30-day trial subscription to Private Wealth Advisory… and lock in one of the few remaining slots….

CLICK HERE NOW!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Posted by Phoenix Capital Research in stock collapse?

The Coming Economic Collapse Will Crash Stocks

In 2008, the world experienced the worst economic collapse in 80+ years. This collapse triggered a stock market crash that erased $30 trillion in wealth.

Since that time, collectively Central Banks have cut interest rates over 600 times and have printed over $15 trillion in new money… money that has failed to generate sustained economic growth… money that has set the stage for another stock market crash.

Consider the measures of GDP growth in the US for instance.

The mainstream media likes to present the “official” GDP numbers as though they are gospel… but the reality is that the number you hear in the press is not even close to accurate.

One of the simplest means of hiding the real economic collapse is to use a bogus measure for inflation. If GDP growth is 10%, and inflation is 10%, then real GDP growth is 0%.

But what if GDP growth is 10%, real inflation is 10%, but you claim inflation is just 6%?

Boom! You can promote GDP growth of 4% to support your claim that printing trillions of dollars has boosted the economy.

To remove this accounting gimmick, you can use Nominal GDP and look at the rate of growth from a year ago. Doing this presents a VERY different view of the economy: one of economic collapse, not growth. I’ve circled periods in which the current level of “growth” occurred in the past.

———————————————————————–

The Opportunity to Make Triple If Not QUADRUPLE Digit Gain is Here

The largest investor fortunes in history were made during crises.

For that reason, we’ve launched a special options trading service designed specifically to profit from the coming crisis.

It’s called THE CRISIS TRADER and already it’s locking in triple digit winners including gains of 151%, 182%, 261% and even 436%!

And the REAL crisis hasn’t even started yet!

We have an success rate of 72%(meaning you make money on more than 7 out of 10 trades)…and thanks to careful risk control, we’re outperforming the S&P 500 by over 50%!

Our next trade is going out shortly… you can get it and THREE others for just 99 cents.

To take out a $0.99, 30 day trial subscription to THE CRISIS TRADER...

CLICK HERE NOW!!!

———————————————————————–

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As you can see, the “recovery” of the last six years has largely involved a “growth” rate that was closely associated with recessions over the last 30 years. At best the US economy has been flatlining. At worst we’ve had bouts of economic collapse comparable to a recession.

Also, note that the previous periods in which we’ve experienced this rate of economic collapse have been associated with stock market crashes.

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The media can try to hide reality all it wants. But an economic collapse is here. It will trigger another stock market crash just as it did in the early ’90s, the Tech Bubble, and the Housing Bubble. And this time Central Banks won’t be able to stop it: they’ve used up all of their ammo in the last six years trying to create  recovery.

Smart investors are preparing now.

Private Wealth Advisory subscribers are already profiting from the markets, having just closed THREE more winners yesterday, bringing us to a FORTY THREE trade winning streak…

What is Private Wealth Advisory?

Private Wealth Advisory is a WEEKLY investment newsletter that can help you  profit from the markets. Every week you get pages of high quality editorial presenting market conditions and outlining the best trades to make to profit from them.

It is the only newsletter to have closed 72 consecutive winning trades in a 12 month period (ZERO losers during that time). And we just began another winning streak last year, already racking up 43 straight winners.

And we’ve only closed ONE loser in the last FOURTEEN MONTHS.

You can try Private Wealth Advisory for 30 days (1 month) for just $0.98 cents.

However, this offer will be expiring tomorrow at midnight. I cannot maintain a track record of over a YEAR of straight winners with thousands and thousands of investors following these recommendations.

To take out a $0.98 30-day trial subscription to Private Wealth Advisory… and lock in one of the few remaining slots….

CLICK HERE NOW!

Best Regards

Graham Summers

Phoenix Capital Research

Posted by Phoenix Capital Research in stock collapse?

Buckle Up, It’s Very Likely the Bull Market in Stocks is Over

As I warned last week… it’s very likely that the
Bull Market in stocks is over.

Stocks have broken their bull market trendline.
Not only that, but they’ve been rejected by this line
TWICE, indicating that the momentum is GONE.

The next move will be SHARPLY DOWN.

Indeed, the breakdown is actually MUCH bigger than most investors
realize. We’ve actually broken THE bull market line that goes all
the way back to 2009!

If you are not preparing for a bear market in stocks, you
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I can show you how.

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Posted by Phoenix Capital Research in stock collapse?