The Fed has now cut rates THREE times this year.

That’s THREE rate cuts at a time when the stock market is at all-time highs, unemployment is below 4% and the US economy is growing.

The last Fed Chair to do this was Alan Greenspan in 1998. And those rate cuts were what ignited the great stock market bubble of the late ’90s.

 Stocks rose ~60% over the next two years.

GPC1111194.png

A similar run from today’s levels would mean the S&P 500 approaching 5,000.

Interestingly enough, the long-term chart suggests this is possible  especially with that recent breakout to the upside.

GPC11519.png

Let’s be clear here… what the Fed is doing today is going to create the MOTHER of All Bubbles.

Stocks are already up 300% from the 2009 bottom in one of the greatest bull markets of all time… And the Fed is now cutting rates AND printing $60 billion in new money every single month.

Again, this is going to be the MOTHER of All Bubbles.

The key now is to determine the best means of profiting from this.

With that in mind, we’ve just published an investment report titled Triple Your Money With the Mother of All Bubbles.

It outlines what the Fed is doing, why it’s doing it, and a unique investment that could easily triple, if not quadruple, as the Fed unleashes a tsunami of liquidity pushing stocks to nosebleed levels.

The last time the Fed began an easing cycle, this investment rose over 1,439%. And this time around we could see similar gains.

To pick up your copy of Triple Your Money With the Mother of All Bubbles go to:

https://phoenixcapitalmarketing.com/MOAB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Last Time the Fed Did This, Stocks Rose 60% in Two Years

The Fed has now cut rates THREE times this year.

That’s THREE rate cuts at a time when the stock market is at all-time highs, unemployment is below 4% and the US economy is growing.

The last Fed Chair to do this was Alan Greenspan in 1998. And those rate cuts were what ignited the great stock market bubble of the late ’90s.

 Stocks rose ~60% over the next two years.

GPC1111194.png

A similar run from today’s levels would mean the S&P 500 approaching 5,000.

Interestingly enough, the long-term chart suggests this is possible  especially with that recent breakout to the upside.

GPC11519.png

Let’s be clear here… what the Fed is doing today is going to create the MOTHER of All Bubbles.

Stocks are already up 300% from the 2009 bottom in one of the greatest bull markets of all time… And the Fed is now cutting rates AND printing $60 billion in new money every single month.

Again, this is going to be the MOTHER of All Bubbles.

The key now is to determine the best means of profiting from this.

With that in mind, we’ve just published an investment report titled Triple Your Money With the Mother of All Bubbles.

It outlines what the Fed is doing, why it’s doing it, and a unique investment that could easily triple, if not quadruple, as the Fed unleashes a tsunami of liquidity pushing stocks to nosebleed levels.

The last time the Fed began an easing cycle, this investment rose over 1,439%. And this time around we could see similar gains.

To pick up your copy of Triple Your Money With the Mother of All Bubbles go to:

https://phoenixcapitalmarketing.com/MOAB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Fed Has Unleashed the Greatest Investing Environment in 20+ Years

The Fed is Going to Push Stocks to Levels You Won’t Believe

Here’s a crazy fact…

The Fed just expanded its balance sheet by $250 BILLION in eight weeks.

Yes, a quarter of a TRILLION dollars… in two months.

The last time the Fed was expanding its balance sheet at this pace was when Lehman Brothers failed in September 2008.

The only difference is that back then the financial system was in the depths of the worst crisis in 80 years… unemployment was over 6% and rising every months… and the U.S. was in the middle of a deep recession.

This time around, stocks are at new all time highs… unemployment is 3.6%… and the U.S. economy is growing at 2%.

And the Fed’s putting $250 BILLION in liquidity into the system in just eight weeks.

We can disagree with this. We might even think it’s outright offensive. But it’s a fact. And it means stocks are going to explode to levels you won’t believe.

Liquidity is what drives stocks. Not the economy. Not earnings. Liquidity.

This is especially true in the post-2008 era which has been defined by central bank intervention more than any other time in history.

So what does this mean for stocks?

Again, it means stocks are going to go parabolic to levels you won’t believe.

I’m talking 4,000 on the S&P 500.

The S&P 500 just broke out of an expanding pattern (purple lines) within its bullish channel (blue lines). The door is now open to 4,000.

We’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://gainspainscapital.com/

Best RegardsGraham Summers

Chief Market Strategist

Phoenix Capital Research

Posted in WHITE Swan | Comments Off on The Fed is Going to Push Stocks to Levels You Won’t Believe

Stocks broke above resistance to hit new all-time highs yesterday. This was a BIG move and one that opens the door to a truly massive rally in the coming weeks.

In the very near-term, stocks are overbought, but this move combined with the Fed’s three rates cuts and $60 billion in QE per month, opens the door to a massive bull run.

As I noted earlier this week, markets around the globe are breaking out to the upside. The Global Dow has just broken out of a mutli-year consolidation phase. The last time it staged a similar move was in 2014-2016 right before a MASSIVE bull market began.

Put simply, across the globe markets are signalling that a major bull run is about to begin. With the right investments, this move could make investors VERY rich indeed. I’ll detail one capable of producing quadruple digit gains during bull markets in tomorrow’s issue of Gains Pains & Capital published exclusively to our clients.

Join our list now to insure it’s delivered to your inbox. You can do so here: www.gainspainscapital.com

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on How to See Triple Digit Gains During the Next Bull Run

Stocks broke above resistance to hit new all-time highs yesterday. This was a BIG move and one that opens the door to a truly massive rally in the coming weeks.

In the very near-term, stocks are overbought, but this move combined with the Fed’s three rates cuts and $60 billion in QE per month, opens the door to a massive bull run.

As I noted earlier this week, markets around the globe are breaking out to the upside. The Global Dow has just broken out of a mutli-year consolidation phase. The last time it staged a similar move was in 2014-2016 right before a MASSIVE bull market began.

Put simply, across the globe markets are signalling that a major bull run is about to begin. With the right investments, this move could make investors VERY rich indeed. I’ll detail one capable of producing quadruple digit gains during bull markets in tomorrow’s issue of Gains Pains & Capital published exclusively to our clients.

Join our list now to insure it’s delivered to your inbox. You can do so here: www.gainspainscapital.com

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on With the Right Investments, This Move Could Make Investors VERY Rich Indeed

How to Play the Coming Explosive Move Higher

For those who have been following us the last few weeks, our running forecast is that the markets are entering another bullish stage.

The driving force for markets is liquidity. And central banks are again printing money to push markets higher. As I write this the Fed and the European Central Bank are both engaged in QE programs.

The Bank of Japan never really stopped QE and has been printing money virtually non-stop since 2014. And the Swiss National Bank prints money to buy stocks outright almost weekly.

Put simply, a TSUNAMI of liquidity is hitting the markets right now. And it’s about to ignite an explosive move higher.

On that note, the S&P 500 has broken out of a consolidation period to new all time highs.

However, the S&P 500 is not the only market breakout to the upside.

Brazil’s Bovespa has erupted higher to new all time highs.

Across the pond, the German DAX has ended its downtrend (blue line) and broken resistance (red line). New all-time highs are a stone’s throw away.

Japan’s Nikkei is about to attempt a similar move, breaking through its downtrend (blue line) and attempting a test of overhead resistance (red line). However, in this case stocks remain well below the all-time high of the 1980s.

Put simply, across the globe markets are signalling that a major bull run is about to begin

Now the question for investors is “how do play this for maximum gains?

I’ll answer that question tomorrow. You won’t want to miss it, so join our free e-letter at www.gainspainscapital.com to make sure it’s delivered to your inbox before the market’s open.

Best Regards

Graham Summer

Chief Market Strategist

Phoenix Capital Research

 

 

Posted in Trading Opportunity | Comments Off on How to Play the Coming Explosive Move Higher

Central Banks Are About to Ignite an EXPLOSIVE Move Higher

For those who have been following us the last few weeks, our running forecast is that the markets are entering another bullish stage.

The driving force for markets is liquidity. And central banks are again printing money to push markets higher. As I write this the Fed and the European Central Bank are both engaged in QE programs.

The Bank of Japan never really stopped QE and has been printing money virtually non-stop since 2014. And the Swiss National Bank prints money to buy stocks outright almost weekly.

Put simply, a TSUNAMI of liquidity is hitting the markets right now. And it’s about to ignite an explosive move higher.

On that note, the S&P 500 has broken out of a consolidation period to new all time highs.

However, the S&P 500 is not the only market breakout to the upside.

Brazil’s Bovespa has erupted higher to new all time highs.

Across the pond, the German DAX has ended its downtrend (blue line) and broken resistance (red line). New all-time highs are a stone’s throw away.

Japan’s Nikkei is about to attempt a similar move, breaking through its downtrend (blue line) and attempting a test of overhead resistance (red line). However, in this case stocks remain well below the all-time high of the 1980s.

Put simply, across the globe markets are signalling that a major bull run is about to begin

Now the question for investors is “how do play this for maximum gains?

I’ll answer that question tomorrow. You won’t want to miss it, so join our free e-letter at www.gainspainscapital.com to make sure it’s delivered to your inbox before the market’s open.

Best Regards

Graham Summer

Chief Market Strategist

Phoenix Capital Research

 

 

Posted in Trading Opportunity | Comments Off on Central Banks Are About to Ignite an EXPLOSIVE Move Higher

A Tsunami of Liquidity Is About to Ignite An Explosive Move Higher

For those who have been following us the last few weeks, our running forecast is that the markets are entering another bullish stage.

The driving force for markets is liquidity. And central banks are again printing money to push markets higher. As I write this the Fed and the European Central Bank are both engaged in QE programs.

The Bank of Japan never really stopped QE and has been printing money virtually non-stop since 2014. And the Swiss National Bank prints money to buy stocks outright almost weekly.

Put simply, a TSUNAMI of liquidity is hitting the markets right now. And it’s about to ignite an explosive move higher.

On that note, the S&P 500 has broken out of a consolidation period to new all time highs.

However, the S&P 500 is not the only market breakout to the upside.

Brazil’s Bovespa has erupted higher to new all time highs.

Across the pond, the German DAX has ended its downtrend (blue line) and broken resistance (red line). New all-time highs are a stone’s throw away.

Japan’s Nikkei is about to attempt a similar move, breaking through its downtrend (blue line) and attempting a test of overhead resistance (red line). However, in this case stocks remain well below the all-time high of the 1980s.

Put simply, across the globe markets are signalling that a major bull run is about to begin

Now the question for investors is “how do play this for maximum gains?

I’ll answer that question tomorrow. You won’t want to miss it, so join our free e-letter at www.gainspainscapital.com to make sure it’s delivered to your inbox before the market’s open.

Best Regards

Graham Summer

Chief Market Strategist

Phoenix Capital Research

 

 

Posted in Trading Opportunity | Comments Off on A Tsunami of Liquidity Is About to Ignite An Explosive Move Higher

Stocks broke upwards last week from the consolidation pattern we’ve been watching.

Both breadth and credit suggested this move was coming. Stocks had some catching up to do and if you took our analysis from two weeks ago to go long, you’ve done well.

So where do we go from here?

The answer UP… Not in a straight line, but to 3,200 by year-end, and possibly 4,000 next year.

Stocks are in a clear upward channel (blue lines). And now that resistance (red line) has been taken out, the channel eventually leads to 3,200.

The key for investors is to find the right plays for this, and then “buy and hold”for the maximum gains. Those who do this correctly, with carefully targeted picks, could stand to generate literal fortunes.

We recently told our clients about a unique way to play the coming blow off top. In the last 10 years this investment has more than tripled the markets returns. And we expect it to absolutely EXPLODE higher as the S&P 500 rises to new all time highs.

To find out more swing by www.gainspainscapital.com

Best
Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Run to 3,200 is Now Underway

Stocks broke upwards last week from the consolidation pattern we’ve been watching.

Both breadth and credit suggested this move was coming. Stocks had some catching up to do and if you took our analysis from two weeks ago to go long, you’ve done well.

So where do we go from here?

The answer UP… Not in a straight line, but to 3,200 by year-end, and possibly 4,000 next year.

Stocks are in a clear upward channel (blue lines). And now that resistance (red line) has been taken out, the channel eventually leads to 3,200.

The key for investors is to find the right plays for this, and then “buy and hold”for the maximum gains. Those who do this correctly, with carefully targeted picks, could stand to generate literal fortunes.

We recently told our clients about a unique way to play the coming blow off top. In the last 10 years this investment has more than tripled the markets returns. And we expect it to absolutely EXPLODE higher as the S&P 500 rises to new all time highs.

To find out more swing by www.gainspainscapital.com

Best
Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on How to Play the Coming Blow Off Top

Stocks broke upwards last week from the consolidation pattern we’ve been watching.

Both breadth and credit suggested this move was coming. Stocks had some catching up to do and if you took our analysis from two weeks ago to go long, you’ve done well.

So where do we go from here?

The answer UP… Not in a straight line, but to 3,200 by year-end, and possibly 4,000 next year.

Stocks are in a clear upward channel (blue lines). And now that resistance (red line) has been taken out, the channel eventually leads to 3,200. 

The key for investors is to find the right plays for this, and then “buy and hold”for the maximum gains. Those who do this correctly, with carefully targeted picks, could stand to generate literal fortunes.

We recently told our clients about a unique way to play the coming blow off top. In the last 10 years this investment has more than tripled the markets returns. And we expect it to absolutely EXPLODE higher as the S&P 500 rises to new all time highs.

To find out more swing by www.gainspainscapital.com

Best
Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Three Charts Every Investor Needs to See This Morning

Stocks hit upper resistance on Friday and rolled over. The decline wasn’t particularly strong however so the door remains open to a breakout to the upside here.

Support (blue line) is key here. If we hold it, the odds of a breakout to the upside greatly improve. But if the blue line break, we could see some truly intense selling down into the 2,800s.

Big picture, I remain convinced a blow off top is coming. A breakout to the upside means stocks rising well above 3,100 and possibly running as high as 3,400.

We recently told our clients about a unique way to play the coming blow off top. In the last 10 years this investment has more than tripled the markets returns. And we expect it to absolutely EXPLODE higher as the S&P 500 rises to new all time highs.

To find out more swing by www.gainspainscapital.com

Best
Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Posted on by The Phoenix | Comments Off on The S&P 500 is Going to 3,400 If Not 4,000

Stocks hit upper resistance on Friday and rolled over. The decline wasn’t particularly strong however so the door remains open to a breakout to the upside here.

Support (blue line) is key here. If we hold it, the odds of a breakout to the upside greatly improve. But if the blue line break, we could see some truly intense selling down into the 2,800s.

Big picture, I remain convinced a blow off top is coming. A breakout to the upside means stocks rising well above 3,100 and possibly running as high as 3,400.

We recently told our clients about a unique way to play the coming blow off top. In the last 10 years this investment has more than tripled the markets returns. And we expect it to absolutely EXPLODE higher as the S&P 500 rises to new all time highs.

To find out more swing by www.gainspainscapital.com

Best
Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Posted on by The Phoenix | Comments Off on A Big Blow Off Top Is Coming… Here’s How to Play It

Stocks broke the all-important level of 3,000 on the S&P 500 yesterday. The market is now forming a triangle formation.

The breakout is likely to ultimately be up. Breadth leads stocks and breadth is in a clear rising channel, having recently risen to new all-time highs.

Until we get a breakdown from that channel, the likelihood of a severe breakdown remains small.

Big picture I believe stocks are preparing for a blow off top that will take the S&P 500 to 3,400 or even 4,000. After that, comes the bear market.

Best Regards  

Graham Summers  
Chief Market Strategist  
Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Stocks Are Preparing For a Blow Off Top

I want to take a moment to discuss what’s happening politically in the U.S.

The focus of our research is on the markets, and I make every effort to avoid bringing up politics unless the subject has a direct impact on the markets.

Unfortunately for us, today politics are playing a major role in how the market trades. The fact is that whether you like it or not, President Trump has effectively “branded” the stock market as indicative of his success as a President.

With that in mind, the market is now closely linked to the Trump administration. I’m not saying I like this. I’m simply pointing out a fact.

So, if the Democrats do succeed in moving forward with impeachment of the President you can expect the markets to crash. And I do mean CRASH.

We’ve had a taste of this a few times already when various issues arose that threatened the Trump administration. Every single time stocks nose-dived.

So if a legitimate impeachment effort arises that could result in President Trump leaving office, the markets will implode.

Currently the odds of this are very low. Thus far it appears as if the Democrats efforts to launch an impeachment effort are more for show than a legitimate political move.

However, if this changes, all bets are off.

The bad news is that politically it might be in President Trump’s best interests for the markets to crash based on the Democrats attempting to impeach him. If this were the case, he could blame the crash on the Democrats, rally his base, and likely also gain votes from centrists who are angry at seeing their retirement accounts drop.

The big “tell” for us will be if the President and his proxies stop verbally intervening to prop the markets up. If this happens, we’ll know that the Trump administration has decided to “let the markets go” to tie the ensuing crash to his political opponents and their efforts to unseat him.

Again, I absolutely HATE politics. But this is the reality we’re dealing with. As I mentioned before, the odds of this are low right now. But if this changes, we’ll have to pay greater attention to it.

For more insights, swing by www.gainspainscapital.com. We offer three investment reports (a $99) value that you can grab for FREE.

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

Posted on by The Phoenix | Comments Off on Could Impeachment Crash the Trump Stock Market?

I want to take a moment to discuss what’s happening politically in the U.S.

The focus of our research is on the markets, and I make every effort to avoid bringing up politics unless the subject has a direct impact on the markets.

Unfortunately for us, today politics are playing a major role in how the market trades. The fact is that whether you like it or not, President Trump has effectively “branded” the stock market as indicative of his success as a President.

With that in mind, the market is now closely linked to the Trump administration. I’m not saying I like this. I’m simply pointing out a fact.

So, if the Democrats do succeed in moving forward with impeachment of the President you can expect the markets to crash. And I do mean CRASH.

We’ve had a taste of this a few times already when various issues arose that threatened the Trump administration. Every single time stocks nose-dived.

So if a legitimate impeachment effort arises that could result in President Trump leaving office, the markets will implode.

Currently the odds of this are very low. Thus far it appears as if the Democrats efforts to launch an impeachment effort are more for show than a legitimate political move.

However, if this changes, all bets are off.

The bad news is that politically it might be in President Trump’s best interests for the markets to crash based on the Democrats attempting to impeach him. If this were the case, he could blame the crash on the Democrats, rally his base, and likely also gain votes from centrists who are angry at seeing their retirement accounts drop.

The big “tell” for us will be if the President and his proxies stop verbally intervening to prop the markets up. If this happens, we’ll know that the Trump administration has decided to “let the markets go” to tie the ensuing crash to his political opponents and their efforts to unseat him.

Again, I absolutely HATE politics. But this is the reality we’re dealing with. As I mentioned before, the odds of this are low right now. But if this changes, we’ll have to pay greater attention to it.

For more insights, swing by www.gainspainscapital.com. We offer three investment reports (a $99) value that you can grab for FREE.

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Posted on by The Phoenix | Comments Off on Could Impeachment Crash the Trump Stock Market?

Yesterday’s drop did a lot of damage to the rally.

Stocks broke down in a big way. As I write this, they’ve broken their bearish rising wedge (blue lines) and have crashed through support (red line).

This is very bad news.

Throughout all of August and most of early September I warned that stocks would only hold up until roughly the Fed’s September meeting (September 17th-18th). Those days formally appears to have marked the recent top.

So what comes next?

Momentum stocks are all suggesting a major breakdown is coming. Netflix, Wayfair and Tesla, all of them Wall Street darlings suggest the market could collapse 2,600 or lower.

Unfortunately that’s not the worst of it either.

Real world economic indicators say the market could go even lower.

Fed Ex, a major global bell-weather says the market could drop 2,400. And copper and Treasuries suggest the markets could crash to 2,000 or lower.

A Crash is coming… and smart investors are preparing NOW before it hits.

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

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

Today is the last day this report will be available to the general public.

To pick up one of the last remaining copies…

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

Posted on by The Phoenix | Comments Off on Is the Bloodbath Finally Here in Stocks?

Yesterday’s drop did a lot of damage to the rally.

Stocks broke down in a big way. As I write this, they’ve broken their bearish rising wedge (blue lines) and have crashed through support (red line).

 

This is very bad news.

Throughout all of August and most of early September I warned that stocks would only hold up until roughly the Fed’s September meeting (September 17th-18th). Those days formally appears to have marked the recent top.

So what comes next?

Momentum stocks are all suggesting a major breakdown is coming. Netflix, Wayfair and Tesla, all of them Wall Street darlings suggest the market could collapse 2,600 or lower.

Unfortunately that’s not the worst of it either.

Real world economic indicators say the market could go even lower.

Fed Ex, a major global bell-weather says the market could drop 2,400. And copper and Treasuries suggest the markets could crash to 2,000 or lower.

A Crash is coming… and smart investors are preparing NOW before it hits.

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

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

Today is the last day this report will be available to the general public.

To pick up one of the last remaining copies…

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

Posted on by The Phoenix | Comments Off on The Market Is a Sea of Red… Here’s How to Profit From the Collapse.

That’s THREE strikes against the Fed.

The Fed cut rates again in September.

At this point, trying to keep track of the Fed’s reasoning for monetary policy is all but impossible. There is no logic or reason behind anything they do.

A year ago, the Fed told us that hiking rates four times a year while running $50 billion in Quantitative Tightening (QT) per month would have no effect on the economy or financial system.

At that time, the Fed told us that even if the financial markets did drop because of Fed policy, the Fed would not change course.

Then, in the span of six weeks, from late November to early January the corporate bond market imploded, and the Fed abandoned its entire strategy for normalization.  Stocks suffered a crash and the Treasury had to step in to prop the system up.

That’s Strike #1: the Fed proved its models for projecting the impact of monetary policy on the financial system had no connection to actual reality.

Moreover, anyone who was monitoring the financial system would have seen as early as last July that the Fed’s policy was destroying global growth and would result in a crash (I certainly did).

Strike #2 came later after the Fed spent six months (January to July of this year) pushing for extreme monetary policy including:

1)   Introducing Negative Interest Rates

2)   Making Quantitative Easing (QE) a permanent, normal policy instead of one used during crises.

3)   Targeting bond yields to corner the bond market even more.

4)   Using QE to buy assets other than Treasuries (corporate debt, stocks, etc.).

It’s odd because throughout this time period, the U.S. economy was growing and unemployment was falling. And yet, for six months the Fed claimed it was data dependent, while suggesting it should start using these various monetary tools.

Strike #2 hit when the Fed then cut rates in July despite unemployment being below 4%, the economy growing by at least 2% and stocks being within spitting distance of all time highs.

If you’re going to claim you’re data dependent and can’t be influenced politically, why would you then cut rates when ALL of the data is ranging from strong to very strong? The only reason the Fed is that the Fed buckled to political pressure from the Trump administration. So there goes its claim that it is politically independent as well as its claim it focuses on the data.

That’s Strike #2 for the Fed.

Which brings us to late September, in which the Fed cut rates again despite both economic data and the financial markets strengthening since July, while also ignoring the worst liquidity crisis since 2007.

You’ve probably heard about the “repo crunch” or “liquidity crisis” occurring at the Fed over the last few weeks. A detailed explanation of these issues would require an entire book, so for simplicity’s sake, the best explanation is as follows:

1)   Banks park money with the Fed on a daily basis.

2)   If banks have extra capital, they lend it to other banks that need it at a particular interest rate.

3)   This interest rate is THE interest rate the Fed targets with its rate cuts/rate increases.

4)   Banks have suddenly started charging one another a rate of interest that is HIGHER than the Fed’s desired rate. This means capital is in high demand “behind the scenes” which suggests banks are in trouble.

How bad was it?

Overnight lending facilities hit rates as high as 5%+ (remember the Fed’s current desired rate is 2.25%) for capital.

All of this indicates that “someone” or “someones” are in SERIOUS need of money. To address this situation, the Fed has had to stage its first liquidity injections since the 2008 crisis. All told, the Fed will put $275 BILLION into the financial system at the end of September.

So when I saw “someone “ or “someones” are in trouble, I’m not talking about a small hedge fund, I’m talking about large financial institutions that need nearly a over quarter of a trillion dollars in funding over a four day period.

If this sounds a little familiar it is exactly what happened in 2007 during the first phase of the credit crisis.

From August 2007:

The Fed garnered attention last week by adding billions of dollars to the money market to relieve upward pressure on interest rates. How do these operations work? Here’s a primer.

The Fed influences growth and inflation by controlling short-term interest rates. It controls those rates in turn via its monopoly over the supply of reserves to the banking system.

Source: Wall Street Journal

Put simply, the Fed is currently facing the worst funding issue in over a decade. Again, we’re talking $275 billion in liquidity injections occurring.

How did the Fed address this in its FOMC meeting and Powell’s Q&A session?

It didn’t.

There was little if any mention of any of the above issues by the Fed. Fed Chair Jerome Powell completely avoided the topic during his prepared remarks. And during the Q&A portion of his appearance he ducked every question concerning it, instead suggesting that this issue was related to the U.S.’s fiscal condition, which are the “Treasury’s job and Congress’s job.”

Strike 3.

At this point it is clear the Fed no clue what it’s doing. Between this and the desperate efforts to pump money into the system I’d say we’re in “late 2007” when it comes to the next crisis.

A Crash is coming… and smart investors are preparing NOW before it hits.

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

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

Today is the last day this report will be available to the general public.

To pick up one of the last remaining copies…

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

Posted on by The Phoenix | Comments Off on The Fed Is Losing Control of the System Again

That’s THREE strikes against the Fed.

The Fed cut rates again in September.

At this point, trying to keep track of the Fed’s reasoning for monetary policy is all but impossible. There is no logic or reason behind anything they do.

A year ago, the Fed told us that hiking rates four times a year while running $50 billion in Quantitative Tightening (QT) per month would have no effect on the economy or financial system.

At that time, the Fed told us that even if the financial markets did drop because of Fed policy, the Fed would not change course.

Then, in the span of six weeks, from late November to early January the corporate bond market imploded, and the Fed abandoned its entire strategy for normalization.  Stocks suffered a crash and the Treasury had to step in to prop the system up.

That’s Strike #1: the Fed proved its models for projecting the impact of monetary policy on the financial system had no connection to actual reality.

Moreover, anyone who was monitoring the financial system would have seen as early as last July that the Fed’s policy was destroying global growth and would result in a crash (I certainly did).

Strike #2 came later after the Fed spent six months (January to July of this year) pushing for extreme monetary policy including:

1)   Introducing Negative Interest Rates

2)   Making Quantitative Easing (QE) a permanent, normal policy instead of one used during crises.

3)   Targeting bond yields to corner the bond market even more.

4)   Using QE to buy assets other than Treasuries (corporate debt, stocks, etc.).

It’s odd because throughout this time period, the U.S. economy was growing and unemployment was falling. And yet, for six months the Fed claimed it was data dependent, while suggesting it should start using these various monetary tools.

Strike #2 hit when the Fed then cut rates in July despite unemployment being below 4%, the economy growing by at least 2% and stocks being within spitting distance of all time highs.

If you’re going to claim you’re data dependent and can’t be influenced politically, why would you then cut rates when ALL of the data is ranging from strong to very strong? The only reason the Fed is that the Fed buckled to political pressure from the Trump administration. So there goes its claim that it is politically independent as well as its claim it focuses on the data.

That’s Strike #2 for the Fed.

Which brings us to late September, in which the Fed cut rates again despite both economic data and the financial markets strengthening since July, while also ignoring the worst liquidity crisis since 2007.

You’ve probably heard about the “repo crunch” or “liquidity crisis” occurring at the Fed over the last few weeks. A detailed explanation of these issues would require an entire book, so for simplicity’s sake, the best explanation is as follows:

1)   Banks park money with the Fed on a daily basis.

2)   If banks have extra capital, they lend it to other banks that need it at a particular interest rate.

3)   This interest rate is THE interest rate the Fed targets with its rate cuts/rate increases.

4)   Banks have suddenly started charging one another a rate of interest that is HIGHER than the Fed’s desired rate. This means capital is in high demand “behind the scenes” which suggests banks are in trouble.

How bad was it?

Overnight lending facilities hit rates as high as 5%+ (remember the Fed’s current desired rate is 2.25%) for capital.

All of this indicates that “someone” or “someones” are in SERIOUS need of money. To address this situation, the Fed has had to stage its first liquidity injections since the 2008 crisis. All told, the Fed will put $275 BILLION into the financial system at the end of September.

So when I saw “someone “ or “someones” are in trouble, I’m not talking about a small hedge fund, I’m talking about large financial institutions that need nearly a over quarter of a trillion dollars in funding over a four day period.

If this sounds a little familiar it is exactly what happened in 2007 during the first phase of the credit crisis.

From August 2007:

The Fed garnered attention last week by adding billions of dollars to the money market to relieve upward pressure on interest rates. How do these operations work? Here’s a primer.

The Fed influences growth and inflation by controlling short-term interest rates. It controls those rates in turn via its monopoly over the supply of reserves to the banking system.

Source: Wall Street Journal

Put simply, the Fed is currently facing the worst funding issue in over a decade. Again, we’re talking $275 billion in liquidity injections occurring.

How did the Fed address this in its FOMC meeting and Powell’s Q&A session?

It didn’t.

There was little if any mention of any of the above issues by the Fed. Fed Chair Jerome Powell completely avoided the topic during his prepared remarks. And during the Q&A portion of his appearance he ducked every question concerning it, instead suggesting that this issue was related to the U.S.’s fiscal condition, which are the “Treasury’s job and Congress’s job.”

Strike 3.

At this point it is clear the Fed no clue what it’s doing. Between this and the desperate efforts to pump money into the system I’d say we’re in “late 2007” when it comes to the next crisis.

A Crash is coming… and smart investors are preparing NOW before it hits.

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

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

Today is the last day this report will be available to the general public.

To pick up one of the last remaining copies…

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

Posted on by The Phoenix | Comments Off on The Fed Has Admitted It Screwed Up… the Next Crisis is Coming