stock collapse?

For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis.

All of the arguments claiming this defied common sense. A 5^th grader would tell you that you cannot solve a debt problem by issuing more debt. Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can’t “save” the economy.

However, there is an AWFUL lot of money at stake in believing these lies. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.

So it’s little surprise that no one would admit the facts: that the Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so.

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So here are the facts:

1)   The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.

2)   The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.

3)   Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.

4)   Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.

5)   The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.

6)   The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.

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.

The situation is clear: the 2008 Crisis was the warm up. The next Crisis will be THE REAL Crisis. The Crisis in which Central Banking itself will fail.

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Last week we closed three more winners including gains of 36%, 69% and a whopping 118% bringing us to 75 straight winning trades. 

And throughout the last 14 months, we’ve not closed a SINGLE loser.

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Graham Summers

Phoenix Capital Research

The Central Banks are getting desperate. The interventions are so obvious now you’d have to be on drugs not so notice them.

On Monday afternoon, at 3PM “someone” stepped in to prop up stocks. They did it again yesterday at 10AM. These were obvious interventions.

How do we know this was intervention and not real buying?

Because no real buyer guns the markets 20+ points higher in a matter of minutes.

Real investors carefully try to buy stock without gunning the market higher. If the market explodes higher, you get a worse entry point.

Why are Central Banks desperately trying to “save” stocks?

Because the markets have lost faith in their abilities.

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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 finished 2015 UP 35%

Over the same time period, the S&P 500 was DOWN.

This continues this year. Already we’ve closed out FIVE double digit winners in 2016. Including a 43% gain closed within 24 hours of us opening it!

Our next trade goes out this 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...

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The Bank of Japan launched Negative Interest Rate Policy or NIRP two Fridays ago. Japanese stocks rolled over and crashed just one day later. They’ve since lost over 6%.

Consider that for a moment. The Bank of Japan, launched NIRP for the first time in history, and instead of exploding higher, stocks collapse.

Japan ALSO had to cancel a bond auction for the first time in history because investors didn’t want to buy bonds at negative rates.

The End Game has begun for Central Banks. Desperate interventions may push stocks higher temporarily, but the next Crisis has officially begun.

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.

Yesterday we closed out THREE more double digit winners (all of them opened just two weeks ago) bringing our current winning streak to 71 straight winning trades,

And throughout the last 14 months, we’ve not closed a SINGLE loser.

With a track record like this, we’re getting a LOT of attention, so we’re going to be raising the price of a Private Wealth Advisory in the next few weeks.

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Best Regards

Graham Summers

Phoenix Capital Research

Stocks are rallying this morning.

They are not rallying because of a change in fundamentals.

They are not rallying because of a significant debt restructuring.

They are not rallying because of great quarterly results from key economic bell-weathers.

They are rallying because of hope for more Central Bank stimulus.

This is the game traders have played for weeks now. Every time it has ended in failure.

From a technical perspective, the S&P 500 could bounce to 1925 as a retest of former support.

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

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However, the damage from the collapse has been severe. All told, $17 trillion in wealth has been erased in the last six months.

The Wilshire 5000 (the broadest stock index) has broken a clear Head and Shoulders pattern. It has erased two years’ worth of gains in a matter of days. BIG trouble.

The S&P 500 has broken a clear rising wedge pattern. This is a classic topping pattern and tells us that the bull market started 2009 is probably over.

In simple terms, bounces and rallies may provide relief but the trend is now DOWN.

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…

CLICK HERE NOW!

Best Regards

Graham Summers

Phoenix Capital Research

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.

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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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!

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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.

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 30^th 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…

CLICK HERE NOW!

Best Regards

Graham Summers

Phoenix Capital Research