Month: January 2019

As I keep warning, the global economy is rapidly moving into a recession.

If you don’t believe me, consider that in the last two weeks, the following have been announced…

1)   South Korean exports, a critical measure for global growth, recorded a -1.2% drop year over year in December.

2)   China’s manufacturing PMI fell into outright contraction below 50. Car sales were negative for the first time in two decades. And Chinese exports fell 4.4% year over year.

3)   German Industrial Production fell 1.9% month over month and 4.6% year over year in November: the biggest drop since 2009. Real-time GDP trackers show the largest EU economy is already in a recession.

4)   US manufacturing ISM dropped sharply from 59% to 54% (not yet in contraction mode, but rapidly approaching it).

To top if off, we now have numerous companies issuing warnings: Apple, Samsung, LG, Fed Ex, Delta, Skyworks, Tailored Brand, Sherwin-Williams, Lindt, Macy’s, Kohl’s, and American Airlines have all lowered forward guidance.

So we’ve got everything from airlines to big tech to chocolate producers and paint manufacturers warning of a slowdown.

This is the slowdown that stocks began to discount in October.

Unfortunately it’s not over either. If you look at the long-term charts, it’s clear the market realizes that the credit cycle has turned and we are moving into a recession/ crisis.

The last two times this happened, a crisis hit within three to six months.

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on last week’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

The bounce is just about over.

Multiple interventions, and active buying by the PPT have juiced stocks higher, but the Powers That Be cannot make the Everything Bubble whole again.

The fact is that between higher inflation along with the Fed’s rate hikes/ draining of liquidity has burst the Everything Bubble. It doesn’t mean that we’re moving straight into a systemic crisis right now. But it does mean that debt deflation is appearing again and that eventually it will spread to systemic issues.

That process is already underway.

The ramp job in Junk Bonds was impressive, but it DID NOT reclaim its former bull market trendline (blue line). All it’s done is open a descending megaphone pattern that will see it crash to new lows shortly.

Similarly, Investment Grade bonds, which have been ramped higher, have just slammed into resistance (top blue line). They too suggest we’re going to new lows shortly.

Finally, the 10-Year Treasury yield has broken down from a falling wedge formation. This suggest Treasuries will be rallying HARD, meaning capital is fleeing into them.

What would drive a move into Treasuries?

This:

Unfortunately, after that comes the REALLY bad part.

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on last week’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

The bounce is just about over.

Multiple interventions, and active buying by the PPT have juiced stocks higher, but the Powers That Be cannot make the Everything Bubble whole again.

The fact is that between higher inflation along with the Fed’s rate hikes/ draining of liquidity has burst the Everything Bubble. It doesn’t mean that we’re moving straight into a systemic crisis right now. But it does mean that debt deflation is appearing again and that eventually it will spread to systemic issues.

That process is already underway.

The ramp job in Junk Bonds was impressive, but it DID NOT reclaim its former bull market trendline (blue line). All it’s done is open a descending megaphone pattern that will see it crash to new lows shortly.

Similarly, Investment Grade bonds, which have been ramped higher, have just slammed into resistance (top blue line). They too suggest we’re going to new lows shortly.

Finally, the 10-Year Treasury yield has broken down from a falling wedge formation. This suggest Treasuries will be rallying HARD, meaning capital is fleeing into them.

What would drive a move into Treasuries?

This:

Unfortunately, after that comes the REALLY bad part.

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on last week’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

The biggest black swan facing the financial system is China.

China has been the primary driver of growth for the global economy since the 2008 Crisis. Despite only accounting for 15% of global GDP, China accounts for 25%-30% of GDP growth.

Put simply, from an economic perspective,  if China catches cold, the world gets sick…  and if China goes into a coma…

Which is why anyone paying attention should be truly horrified by the latest round of data from China’s economy.

In December, China’s Manufacturing PMI came in below 50, signaling a contraction is underway.

This is a massive deal because this was an OFFICIAL data point, meaning one that China had heavily massaged to look better than reality.

Let me explain…

Over the last 30 years China’s economic data has ALWAYS overstated growth. The reason for this is very simple: if you are an economic minister/ government employee who lives in a regime in which leadership will have you jailed or executed for missing your numbers, the numbers are ALWAYS great.

Indeed, this is an open secret in China, to the degree that former First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”

With that in mind, we have to ask… how horrific is the situation in China’s financial system that even the heavily massaged data is showing a contraction is underway?

Think “systemic risk” bad.

I’ve already outlined how China is sitting atop 15% of all junk debt in the global financial system, resulting in the country’s “bad debt” to GDP ratio exceeding 80% (a first in history).

However, it now appears that even that assessment was too rosy.

Last Friday, China’s Central Bank, called the People’s Bank of China, or PBOC, released its Financial Stability Report for 2018. Nestled amidst the various accounting gimmicks was the following:

H/T Deep Throat IPO

What you are looking at is a table in which China’s Central Bank admits that China has added $50 TRILLION in new financial assets to its financial system in the last FOUR years.

Bear in mind, China’s entire economy is only $12 trillion… so you are talking about it adding over 400% of its GDP in financial assets… in less than FIVE years. From 2013-2017, China added $25 in new financial assets for every $1 in GDP.

Never in history has a country done this. NEVER.

Oh and nearly all of this (78%) was in SHADOW financial assets… or assets that are completely unregulated with the WORST underwriting standards.

To put this into perspective, imagine if the US Federal Reserve revealed in 2007 that the banking industry had created $56 TRILLION in subprime mortgages from 2003-2007.

THAT is the equivalent of what China has done.

As I have maintained time and again, China is one gigantic financial fraud fueled by garbage debt. It is the #1 risk to the global financial system today. And by the look of things it’s about to Collapse.

The market knows it too. Take a look at the below chart:

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

The biggest black swan facing the financial system is China.

China has been the primary driver of growth for the global economy since the 2008 Crisis. Despite only accounting for 15% of global GDP, China accounts for 25%-30% of GDP growth.

Put simply, from an economic perspective,  if China catches cold, the world gets sick…  and if China goes into a coma…

Which is why anyone paying attention should be truly horrified by the latest round of data from China’s economy.

In December, China’s Manufacturing PMI came in below 50, signaling a contraction is underway.

This is a massive deal because this was an OFFICIAL data point, meaning one that China had heavily massaged to look better than reality.

Let me explain…

Over the last 30 years China’s economic data has ALWAYS overstated growth. The reason for this is very simple: if you are an economic minister/ government employee who lives in a regime in which leadership will have you jailed or executed for missing your numbers, the numbers are ALWAYS great.

Indeed, this is an open secret in China, to the degree that former First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”

With that in mind, we have to ask… how horrific is the situation in China’s financial system that even the heavily massaged data is showing a contraction is underway?

Think “systemic risk” bad.

I’ve already outlined how China is sitting atop 15% of all junk debt in the global financial system, resulting in the country’s “bad debt” to GDP ratio exceeding 80% (a first in history).

However, it now appears that even that assessment was too rosy.

Last Friday, China’s Central Bank, called the People’s Bank of China, or PBOC, released its Financial Stability Report for 2018. Nestled amidst the various accounting gimmicks was the following:

H/T Deep Throat IPO

What you are looking at is a table in which China’s Central Bank admits that China has added $50 TRILLION in new financial assets to its financial system in the last FOUR years.

Bear in mind, China’s entire economy is only $12 trillion… so you are talking about it adding over 400% of its GDP in financial assets… in less than FIVE years. From 2013-2017, China added $25 in new financial assets for every $1 in GDP.

Never in history has a country done this. NEVER.

Oh and nearly all of this (78%) was in SHADOW financial assets… or assets that are completely unregulated with the WORST underwriting standards.

To put this into perspective, imagine if the US Federal Reserve revealed in 2007 that the banking industry had created $56 TRILLION in subprime mortgages from 2003-2007.

THAT is the equivalent of what China has done.

As I have maintained time and again, China is one gigantic financial fraud fueled by garbage debt. It is the #1 risk to the global financial system today. And by the look of things it’s about to Collapse.

The market knows it too. Take a look at the below chart:

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

The biggest black swan facing the financial system is China.

China has been the primary driver of growth for the global economy since the 2008 Crisis. Despite only accounting for 15% of global GDP, China accounts for 25%-30% of GDP growth.

Put simply, from an economic perspective,  if China catches cold, the world gets sick…  and if China goes into a coma…

Which is why anyone paying attention should be truly horrified by the latest round of data from China’s economy.

In December, China’s Manufacturing PMI came in below 50, signaling a contraction is underway.

This is a massive deal because this was an OFFICIAL data point, meaning one that China had heavily massaged to look better than reality.

Let me explain…

Over the last 30 years China’s economic data has ALWAYS overstated growth. The reason for this is very simple: if you are an economic minister/ government employee who lives in a regime in which leadership will have you jailed or executed for missing your numbers, the numbers are ALWAYS great.

Indeed, this is an open secret in China, to the degree that former First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”

With that in mind, we have to ask… how horrific is the situation in China’s financial system that even the heavily massaged data is showing a contraction is underway?

Think “systemic risk” bad.

I’ve already outlined how China is sitting atop 15% of all junk debt in the global financial system, resulting in the country’s “bad debt” to GDP ratio exceeding 80% (a first in history).

However, it now appears that even that assessment was too rosy.

Last Friday, China’s Central Bank, called the People’s Bank of China, or PBOC, released its Financial Stability Report for 2018. Nestled amidst the various accounting gimmicks was the following:

H/T Deep Throat IPO

What you are looking at is a table in which China’s Central Bank admits that China has added $50 TRILLION in new financial assets to its financial system in the last FOUR years.

Bear in mind, China’s entire economy is only $12 trillion… so you are talking about it adding over 400% of its GDP in financial assets… in less than FIVE years. From 2013-2017, China added $25 in new financial assets for every $1 in GDP.

Never in history has a country done this. NEVER.

Oh and nearly all of this (78%) was in SHADOW financial assets… or assets that are completely unregulated with the WORST underwriting standards.

To put this into perspective, imagine if the US Federal Reserve revealed in 2007 that the banking industry had created $56 TRILLION in subprime mortgages from 2003-2007.

THAT is the equivalent of what China has done.

As I have maintained time and again, China is one gigantic financial fraud fueled by garbage debt. It is the #1 risk to the global financial system today. And by the look of things it’s about to Collapse.

The market knows it too. Take a look at the below chart:

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

This is getting old.

The PPT is now juicing Oil higher, because doing so relieves stress in the junk bond market (a large percentage of junk bond issuers are shale companies that require higher Oil prices to be profitable).

This, in turn, is sending a “all clear” signal to stocks, inducing algos to buy indiscriminately.

Put simply, the formula for this market rig is:

Buy Oil futures, because it will drive Junk Bonds higher, and stocks will follow.

You can see the rig right here in plain sight… Oil (black line) pulling Junk Bonds higher (blue line) almost tick for tick.

Critical market internals suggest this rig is now coming to an end. Two major market leaders (Goldman Sachs and the Semiconductor index) have not only been lagging on this latest bounce, but both were DOWN yesterday despite stocks rising 1%.

Sure, stocks might bounce a little higher, but at the end of the day, it is clear that corporate profits have peaked, the economy is rolling over, and the Fed is tightening.

Which of these is likely to be better six months from now? What exactly makes stocks an attractive investment right now?

In chart form… what has changed about this?

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

This is getting old.

The PPT is now juicing Oil higher, because doing so relieves stress in the junk bond market (a large percentage of junk bond issuers are shale companies that require higher Oil prices to be profitable).

This, in turn, is sending a “all clear” signal to stocks, inducing algos to buy indiscriminately.

Put simply, the formula for this market rig is:

Buy Oil futures, because it will drive Junk Bonds higher, and stocks will follow.

You can see the rig right here in plain sight… Oil (black line) pulling Junk Bonds higher (blue line) almost tick for tick.

Critical market internals suggest this rig is now coming to an end. Two major market leaders (Goldman Sachs and the Semiconductor index) have not only been lagging on this latest bounce, but both were DOWN yesterday despite stocks rising 1%.

Sure, stocks might bounce a little higher, but at the end of the day, it is clear that corporate profits have peaked, the economy is rolling over, and the Fed is tightening.

Which of these is likely to be better six months from now? What exactly makes stocks an attractive investment right now?

In chart form… what has changed about this?

A Crash is coming… and 99% of investors will panic when it hits… but not those who have downloaded our 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Investors have to choose which of the two forces that are driving all stock market action they believe:

1)    The approaching global economic collapse.

2)   Desperate intervention to prop up the bursting bubble.

Regarding #1, in the last two weeks Apple, Samsung and Fed Ex have issued EXTREMELY negative guidance. If you think these three represent isolated corporate issues, think again. German Industrial Production collapsed the most since the 2008 crisis, while it’s just been revealed that REAL China GDP growth is somewhere below 3% and possibly even negative.

This is the global economic collapse the market began to discount in October. It is the reason why we had that major stock market drop. And it’s why the smart money has been selling stocks for months.

Against this backdrop of horrible fundamentals and massive selling pressure, we have a desperate series of interventions underway ranging from the President tweeting, US economic advisors saying there’s now chance of a recession, Fed Chair Powell suddenly suggesting that the Fed’s policies are indeed subject to change, and the Treasury Secretary calling the Plunge Protection Team to ramp stocks higher.

This is why stocks have erupted over the last three days. No real buyer invests BILLIONS of dollars indiscriminately all at once; REAL buyers enter large orders that take weeks to complete.

As investors we now have to choose which one of these we side with. Do we side with the fact that the credit cycle has turned and the bubble has burst… or do we believe that the Fed/ PPT can somehow hold the markets up despite this?

This chart seems pretty clear: we’ve broken the monthly bull market trendline for the first time EVER. Even if the S&P 500 rallies to 2,600, it won’t change anything from a chart perspective.

And what comes after that?

99% of investors will panic when this CRASH hits…

On that note we just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research