The financial markets are currently waiting for the Fed to announce QE 3 or Operation Twist 2 either today or tomorrow. I don’t think either of these are coming. In fact, I think they’re not even on the table.

For starters, QE 3 is off the table unless we see a market collapse or a major bank go under. That’s the truth, though the financial media refuses to accept it.

The reasons for this are both political and financial. From a political standpoint, the Fed particularly Ben Bernanke, has become politically toxic

Indeed, Bernanke and his loose money policies are now virtually synonymous with current President Barrack Obama’s spending and stimulus programs.  Neither of these men or their policies are popular with the American people today. And it’s clear that both will be campaign issues going forward into the 2012 Presidential election.

Indeed, we’ve already seen one round of spending conflicts between the GOP and the President. True, it was mainly smoke and mirrors. However, the fact that the topic of Government spending is now being debated at all indicates that the political environment has shifted from one in which the Government was seen as the savior of the economy (as it was from March 2009 to the end of 2010) to one in which Government spending and deficits are perceived as a problem/ campaign issue.

That is a massive shift in political perspective. Only two years ago the Federal Reserve and Obama were thought to have saved capitalism and the US economy. Today Obama’s polls are at new lows and the Fed has been openly criticized by three of the Republican frontrunners for the 2012 Presidential election (Perry, Bachmann, and Paul).

This is hardly a climate in which the Fed can unveil QE 3 without some catastrophe striking first. On top of this, the Fed is also going to be facing increased political and likely even legal pressure from Wall Street in the near future.

First off, Goldman Sachs CEO Lloyd Blankfein has hired a criminal defense attorney… and not just any attorney, but Reid Weingarten. I’ll let the following portion of a Bloomberg article speak for this man and his track record.

Weingarten won the acquittal in May of Lauren Stevens, a former GlaxoSmithKline Plc (GSK) attorney accused of impeding a U.S. Food and Drug Administration investigation. He also represented Elizabeth Monrad, the former chief financial officer at General Reinsurance Corp. who was convicted in an accounting fraud scandal. She won a retrial earlier this month.

Weingarten previously represented former WorldCom CEO Bernard Ebbers, who was sentenced to 25 years in prison after he was convicted of an $11 billion fraud. He defended former Enron Chief Accounting Officer Richard Causey, who was sentenced to 5 1/2 years in prison.

If Blankfein is under investigation and hiring someone of Weingarten’s caliber, a massive legal storm is about to begin on Wall Street. These lawsuits will involve the US Federal Reserve. And when push comes to shove, Blankfein (and other Wall Street executives who broke the law) will be blaming Bernanke and the Fed.

After all, the easiest defense is for Blankfein and his kind to simply say that they were pressured into defrauding investors and the public by Bernanke and the Fed when the financial system imploded in 2008.

Given that the Fed is run by spineless academics while Goldman Sachs and other Wall Street firms are run by those who make a career out of profiting at other’s expense, who do you think will be going down when the legal dust settles?

Bernanke and the Fed.

The Fed already senses this and is moving to defend itself and shift the blame for the Financial Crisis to Wall Street. Consider that not long after Blankfein hired Weingarten, the Fed actually sued Goldman Sachs:

The Federal Reserve announced an enforcement action against Goldman Sachs Group Inc., saying the company’s mortgage-servicing unit had engaged in “a pattern of misconduct and negligence” in its handling of home-mortgage loans.

The Fed’s action on Thursday seeks changes in mortgage-servicing practices and unspecified monetary damages. It came as Goldman reached an agreement with New York state banking regulators over wrongful foreclosures, allowing it to complete the Sept. 1 sale of its Litton Loan Servicing unit to Ocwen Financial Corp.

The significance of this development cannot be overstated. Goldman Sachs used to be one of the Fed’s favorite firms. Indeed, it could easily be argued that Goldman received the most preferential treatment from the Fed during the Financial Crisis.

Given just how close Goldman was to the Fed previously, the Fed/ Goldman relationship would only breakdown if an external threat meant that either group is going to be in MAJOR legal trouble (possible jail time). In light of Blankfein’s recent moves as well as the Fed’s lawsuit against Goldman, I fully believe that this is the case and that the relationship between the Fed and Wall Street will be deteriorating further in the coming months.

In a climate of increased legal pressure such as this, the bar for QE 3 is going to be much, much higher.  It’s one thing if the Fed and Goldman Sachs were simply making critical statements about one another in public. But lawsuits/ legal actions are a totally different matter. In plain terms things are now getting very serious behind the scenes. And Bernanke will not be able to simply do as he pleases without consequence.

For this reason, it will take another catastrophe for the Fed to implement QE 3. The days of the Fed implementing QE just for the sake of raising the stock market or affecting a “recovery” are over. It is clear now, even to those who have little financial understanding that Obama and Bernanke have essentially spent trillions of Dollars and accomplished next to nothing.

As a result of this, the Fed will be implementing large-scale moves ONLY in reaction to crises. Imagine the political impact it would have if the Fed were to unveil QE 3 today or tomorrow two with Oil already at $86 a barrel and food prices skyrocketing.

Indeed, I fully believe the Fed will disappoint in a BIG way today and tomorrow. With every one and their mother expecting QE 3 or some other major program today and tomorrow, the potential for MAJOR market upset is higher than ever before.

Indeed, I fully believe that we may be on the verge of a market Crash. Behind the scenes, the market is on DEFCON Red Alert. Ignore what the mainstream media and White House are saying, we are in BIG TROUBLE.

So if you’ve not already take steps to prepare for what’s coming, you need to do so NOW while the markets are still holding up.

Because once the selling pressure comes back into the markets… it’s going to be far FAR too late.

To take action to insure you don’t get crushed in the coming Collapse…

Click Here Now!!!

Best Regards

Graham Summers

 

The financial markets are literally standing on the ledge of a cliff looking down into the abyss. The fact we’ve had a coordinated Central Bank intervention in the last week should tell you just how desperate things are getting.

The one hope for the bulls is that the Fed will announce some massive new program at its September meeting which takes place tomorrow and Wednesday. I fully believe the Fed will disappoint in a big way as Bernanke and his loose money policies have become politically toxic: see the GOP debate in which all frontrunners united in their criticism of the Fed.

The market looks to be agreeing with me. The bearish flag formation I warned about last week remains in play. The ultimate downside target for this is 1,000 on the S&P 500.

Within the bearish flag formation, we’ve also got the makings of a Head and Shoulders pattern: another very bearish formation. The drop Sunday night has made this pattern even more probable.

Neither of these formations predict a massive rally on QE 3 or some other new Fed program. Indeed, how can the Fed announce something new? A record number of Americans say they are paying more for their food. Oil is close to $90 per barrel. And Gold is north of $1,800, having touched $1,920 earlier this month.

Aside from this, the Fed has already instigated several new moves this month including the coordinated Central Bank intervention of last week and the opening of FX swap lines last month. I view these moves as preparation for a Greek default, which is most certainly in the near future.

Indeed, having staged two bailouts of Greece and talking down the possibility of a Greek default non-stop over the last 18 months, the ECB and political leaders in Europe seem to have done a complete 180, with the notion of a Greek default now a matter of “when” not “if.”

In early 2010, a Greek default was never even considered to be on the table. At that time, the entire discussion focused on whether or not Greece even needed a bailout. Today, the words “Greek Default” show up in almost every headline pertaining to Europe.

Greece Has 98% Chance of Default on Euro-Region Sovereign Woes

Potential Greek Default Worries European Politicians

Greece default ‘virtually 100 percent

Scenarios: Potential market impact of a Greek default

I fully believe that behind the scenes, the groundwork has already been laid for Greece to default. The market is already pricing this as a 100% certainty. France has its own problems and won’t be able to provide another Greece bailout. Germany is now in another round of elections in which voters are destroying Angela Merkel and her party for supporting the bailouts… at a time when it’s revealed that even German banks needs tens of billions more in capital.

In simple terms, the “bailout” madness is ending in Europe. What will follow will be a Greek default followed by debt collapses and restructurings in Italy and Spain. Europe is already aware of this, which is why liquidity has dried up to the point that the world’s Central Banks had to stage a coordinated intervention last week.

Indeed, I fully believe that we may in fact be on the verge of a Crash in the markets. All the Red Flags are there. Europe’s entire banking system is on the verge of systemic collapse. Take a look at European banks and you’ll see what I mean.

This is Agricole, the mega-French Bank. Does this look like a solvent financial institution to you? Do you really think that Europe has a chance when even French and German banks are collapsing?

Let’s be blunt, the global financial system is now on DEFCON Red Alert. If you have not already prepared your portfolio for a possible CRASH, you NEED to move now! Because by the time the selling pressure comes back into the markets in a BIG way (next week or so) it will be too late.

I can show you how to turn this into a time of profits, NOT pain. My Private Wealth Advisory subscribers MADE money during the Crash of 2008 as well as the Euro Crisis of May 2010. And we’ve already locked in gains of 7%, 8%, and 9% during the first leg down in this latest collapse.

In fact, 8 of our last 9 trades have made money. And we’ve taken action (and trading positions) to profit in a BIG way from the very REAL potential of systemic risk with my Crisis Trades: the very trades I used to make triple digit returns during the 2008 Crash.

If you’d like to find what they are… and take action to profit from the Great Crash of 2011 which has already begun…

Click Here Now!

Graham Summers

 

 

 

 

The market is rallying on short-covering and the usual options expiration manipulation. It’s now obvious traders are gunning for 1,200 on the S&P 500. We were at 1,140 o the S&P 500 only three days ago. A 5% move in just two days is not healthy nor is it good for the market as a whole.

The economic and fundamental backdrop today is absolutely terrible. Retails sales were negative when you account for inflation. The Philly Fed index missed again. Last month we didn’t add a single job for the first time since 1945. And on and on.

The bond and credit markets are now pricing in an economic depression while stocks are roaring as though the recovery is fully in place and we’re going into another period of sustained economic growth. Which one are you going to believe?

Given that stocks mis-read the 2007 recession, the 2008 liquidity Crisis, the Euro Crisis, Greece, and the ongoing US depression, we’d suggest not betting on stocks being right this time.

The primary problem is that the world Central Banks continue to intervene to prop the markets up. We had a global intervention earlier today… forcing the US Dollar to collapse while the Euro soared.

This is an act of desperation. It is essentially an admission on the part of the Central Banks that Europe is in a full-scale liquidity crisis a la pre-Lehman.

Indeed, what’s truly amazing is to see stocks rallying on news concerning Greece… at the same time that Greece bonds are pricing in a default with 100% certainty. Makes you wonder just who is buying stocks at these levels.

Could the Fed be forcing stocks higher in anticipation of a Greek default just as it bought the market following its disappointing August 9 and Jackson Hole announcements? Or could the Fed be juicing the market higher because no QE 3 is coming next week at its FOMC meeting?

The primary point is this: stocks have been notoriously wrong on most economic developments for well over 3 years. The larger, more liquid credit and bond markets are forecasting an absolute disaster is about to unfold.

Indeed, I fully believe we‘re on the eve of another 2008-style Crash. All the signs are there. Whether it’s a Greece default, Societe General going under, or some other event, the markets are on DECON Red Alert.

On that note, if you’re looking for actionable advice to help you navigate the coming carnage, my Private Wealth Advisory newsletter has been showing investors how to profit from any market environment.

To whit, my clients MADE money in 2008. They also made money during the Euro Crisis of 2010. And they’re making money now, while 99% of investors lose their shirts.

If you’d like to join us, you can take out a “trial” subscription to Private Wealth Advisory… and join my list of private clients in receiving my bi-weekly market updates and real-time trading alerts… if you…

Click Here Now!

Graham Summers

 

 

 

 

 

 

 

If you believe that our leaders have even the slightest clue of how to solve the economy’s problems, Obama’s jobs proposal should rid you of your delusion.

This is not a matter of political affiliation nor is it an attack of Obama as a person. It’s a simple matter of basic math.

Obama wants to spend roughly $500 billion to create two million jobs (that’s the claim at least). Put another way, Obama would spend roughly $250,000 to create a single job. That’s a heck of a lot of money in an economy in which the average income is $50K or so.

That’s just the basic math. I’m not even bothering to assess the fact that the Government is already spending over $1 TRILLION per year and hasn’t created a sustainable job recovery.

So how exactly will another $500 billion change things?

Also, where is the Government going to come up with this money exactly? Didn’t we just say we needed to hike the debt ceiling by another $500 billion? Aren’t we already running Debt to GDP and Deficit numbers that are on par with Greece: a country that is guaranteed to default in the near future?

Folks, this is the hard truth: the US is broke and our leaders have no clue how to solve any of the structural issues our economy and markets are facing. They’ve spent TRILLIONS propping up the stock market but haven’t created new jobs nor have they improved Americans’ quality of life in the last two years.

In other words, we’re at the End Game for Government Intervention in the economy and marketplace. Greece has already shown us what’s coming: default and debt restructuring.

After all, there are only two ways to deal with a debt problem:

1)   Pay it off

2)   Default

The US has no chance at all of ever paying off its debts, which means some form of default and restructuring is coming our way in the future. And when this hits, it will make 2008 look like a picnic.

On that note, if you’re looking for actionable advice to help you navigate the coming carnage, my Private Wealth Advisory newsletter has been showing investors how to profit from any market environment.

To whit, my clients MADE money in 2008. They also made money during the Euro Crisis of 2010. And they’re making money now, while 99% of investors lose their shirts.

If you’d like to join us, you can take out a “trial” subscription to Private Wealth Advisory… and join my list of private clients in receiving my bi-weekly market updates and real-time trading alerts… if you…

Click Here Now!

Graham Summers

 

 

 

 

 

 

 

The similarities between 2008 and today are getting scarier by the day. We’ve already seen the Hank Paulson mega-bazooka-bailout from the Emergency Fund in Europe. We’ve also seen short-selling bans, verbal interventions, the Warren Buffett bailout (recently BAC, though it was GS in 2008) and of course the “China saves the day” purchases (Morgan Stanley in 2008 and Europe today).

Now we have Societe General’s CEO doing his best Dick “we’re well capitalized” Fuld impersonation on CNBC, as well as yet another “China saves the day” rumor forcing the markets up nearly 2% in just one hour.

Does anyone remember how China’s 2008 “save the day” purchases turned out? How about Wall Street’s claims of being “well-capitalized” (including CEOs of Merrill Lynch, Lehman Brothers, even Goldman Sachs)? Have people really forgotten how that whole mess turned out in 2008?

Most importantly, does anyone REALLY think this situation will turn out differently this time around? Who exactly would want to buy the market based on rumors of China buying European bonds? How did China’s support of the Euro work out earlier this year?

Let’s be honest here. Neither China, nor the ECB, nor the Federal Reserve can stave off the collapse that’s coming. Indeed, the Fed spent $900 billion and nearly one year to prop the markets up… and we’ve wiped out ALL of those gains in just one month.

On top of this, the credit markets indicate that we are now heading rapidly into a full-scale Depression and market Crash that will make 2008 look like a picnic. Do you remember a time when stocks held up on rumors while the credit markets forecast a collapse?

That’s right… the last time stocks held up while Bonds and the Credit markets forecast disaster was right on the even of the 2008 Crash. They’re flashing the SAME warning signals this time too. Only this time the powers that be won’t be able to do anything about it.

Indeed, by the time the smoke clears on this thing we’re going to see civil unrest, bank holidays (no to mention hundreds of bank failures) systemic collapses, and even food shortages.

Do not be fooled by the mainstream media they’re completely behind the curve on this one (just as they were the 2008 Crash).

I’m not. Indeed, I’ve got investors already positioned for what’s coming with a number of concentrated Crisis Trades that will pay out HUGE returns as the Crash unfolds.

Case in point, while everyone else lost their shirts in the last month, my clients actually MADE money.

We’ve also prepared our families and personal finances for the systemic risk that will be soon hitting the markets thanks to my three Special Reports Protect Your Family, Protect Your Savings, and Protect Your Portfolio.

We’re literally ready for whatever may come, whether it be bank holidays, food shortages, civil unrest, markets Crashes and more.

And we’re going to make a lot of money from it too (my Crisis trades all paid out triple digit returns in 2008).

You can too. With a “trial” subscription to my Private Wealth Advisory newsletter.

You’ll immediately be given access to my Prepare Your Family, Prepare Your Savings, and Prepare Your Portfolio reports.

You’ll also join my private client list in receiving my bi-weekly market reports and real-time investment alerts.

And all the market insights, special reports and trade triggers you learn from me are yours to keep… even if you decide to cancel your subscription and request a full refund during the first 30 days of your subscription.

To join us… and start preparing your loved ones and personal finances for the Great Crisis (2008 was the warm up)…

Click Here Now!!!

Best Regards

Graham Summers

 

 

 

 

 

I’ve been warning that the markets were on the verge of another round of Deflation. By the looks of things, it’s here with the US Dollar breaking out of its massive wedge pattern:

The ultimate target for this pattern is the mid-80s. So consider this latest breakout the first leg up of a much larger move that will affect all other asset classes in a big way.

In order for a move of that caliber to occur in the US Dollar, we’ll need to see a full-scale crisis to hit the markets (the last two US Dollar rallies occurred during the 2008 collapse and the 2010 Euro Crisis). So expect greater downside risk in stocks in the near future.

On that note, the S&P 500 has broken out of its bearish flag formation to the downside. The ultimate target for this pattern is at 1,000: 13% DOWN from here. Considering that we’ve already wiped out a year’s worth of gains in one month, this should be a MAJOR warning that we’re not done yet.

On that note, if you’re looking for actionable advice to help you navigate the coming carnage, my Private Wealth Advisory newsletter has been showing investors how to profit from any market environment.

To whit, my clients MADE money in 2008. They also made money during the Euro Crisis of 2010. And they’re making money now, while 99% of investors lose their shirts.

If you’d like to join us, you can take out a “trial” subscription to Private Wealth Advisory… and join my list of private clients in receiving my bi-weekly market updates and real-time trading alerts… if you…

Click Here Now!

Graham Summers

 

 

 

 

I’ve said many times before that QE 3 won’t be coming any time soon unless the market Crashes or a major bank goes under. The reason is that QE (and Ben Bernanke for that matter) have been politically toxic: we’ve already seen that the Fed will be a major political issue in the 2012 Presidential election.

The Fed is aware of this; at least the more astute members who have an interest in preserving their careers.

Kocherlakota-need for more Fed easing ‘unlikely’

A top Federal Reserve official who opposed the U.S. central bank’s move last month to ease monetary policy signaled Tuesday he may balk again if fellow policymakers opt for still more stimulus this month.

“The data in August did not justify the additional accommodation provided at that meeting,” Minneapolis Federal Reserve Bank President Narayana Kocherlakota said in remarks prepared for delivery at the University of Minnesota’s Carlson School of Management. “It is unlikely that the data in September will warrant adding still more accommodation.”

http://www.reuters.com/article/2011/09/06/usa-fed-kocherlakota-idUSN9E7J700J20110906

Kockerlakota now joins Dallas Fed President Fisher in establishing himself as a hawk: one who opposes additional easing. I fully believe Bernanke will be stepping down within 18 months (even Obama won’t shelter him). When that happens, a more hawkish Fed Chairman will be picked. Looks like Kockerlakota is putting himself in the running for the job.

So all claims that QE 3 is just around the corner needs to consider what will happen if QE 3 isn’t announced in September. What happens if the markets DON’T get the additional easing that the bulls are hoping for?

Have a look at what happened in early August and you’ve got your answer. Indeed, I fully believe we have reached the End Game for Fed Intervention: a time when the Fed can no longer maintain control of the markets. What will follow will make 2008 look like a picnic.

Indeed, I fully believe that the financial system is now more in danger of systemic collapse than at any point in history (including 2008). Do NOT be fooled by the rally of the last few days. We saw rallies of 8%, 11%, even 17% during 2008. Those investors who bought into them got taken to the cleaners.

Things are so dangerous that I’ve had Private Wealth Advisory subscribers open our Crisis Trades: the trades we used to produce triple digit gains during the 2008 Crash.

We’ve also prepared our personal finances and loved ones for what’s coming (Crashes, civil unrest, food shortages, bank holidays and more) with my Prepare Your Family, Prepare Your Savings, and Prepare Your Portfolio reports.

If you’ve yet to take steps to prepare your portfolio and your loved ones for what’s coming, NOW is the time to do so while the markets are still holding up.

Because once the selling pressure comes back into the markets (a matter of days) it will be too late.

To take action now, pick up your copies of my Prepare Your Family, Prepare  Your Savings, and Prepare Your Portfolio reports and join my private client list in receiving my bi-weekly market analyses and real-time investment alerts, all you need to do is take out a “trial” subscription to Private Wealth Advisory…

To do so… and start preparing for a Crisis that will make 2008 look like a picnic (heck just look at the first leg down that occurred in early August)…

Click Here Now!!!

Best Regards

Graham Summers

 

Now that the Swiss have pegged the Franc to the soon-to-be-broken-up Euro, the US Dollar is now the primary “flight to safety” paper currency for the world. With that in mind, we need to consider that the greenback appears to be forming a massive wedge pattern:

This pattern predicts a possible target of the mid-80s. Remember, the last two major US Dollar rallies were caused by Crises (2008 and the Euro Crisis of 2010). So if the greenback explodes again here, it will be based on another round of deflation/ systemic risk.

However, in order for us to get there, we need to take our resistance at 76:

This is the line to watch. When we take out 76, the financial system will be in BIG TROUBLE again.

Indeed, I fully believe that the financial system is now more in danger of systemic collapse than at any point in history (including 2008). Do NOT be fooled by the rally of the last few days. We saw rallies of 8%, 11%, even 17% during 2008. Those investors who bought into them got taken to the cleaners.

Things are so dangerous that I’ve had Private Wealth Advisory subscribers open our Crisis Trades: the trades we used to produce triple digit gains during the 2008 Crash.

We’ve also prepared our personal finances and loved ones for what’s coming (Crashes, civil unrest, food shortages, bank holidays and more) with my Prepare Your Family, Prepare Your Savings, and Prepare Your Portfolio reports.

If you’ve yet to take steps to prepare your portfolio and your loved ones for what’s coming, NOW is the time to do so while the markets are still holding up.

Because once the selling pressure comes back into the markets (a matter of days) it will be too late.

To take action now, pick up your copies of my Prepare Your Family, Prepare  Your Savings, and Prepare Your Portfolio reports and join my private client list in receiving my bi-weekly market analyses and real-time investment alerts, all you need to do is take out a “trial” subscription to Private Wealth Advisory…

To do so… and start preparing for a Crisis that will make 2008 look like a picnic (heck just look at the first leg down that occurred in early August)…

Click Here Now!!!

Best Regards

Graham Summers

The European banking implosion has now shifted into hyper-drive. We’ve now broken out of the triangle pattern of the last few months in a big way to the downside. I’ve added the movements made in the overnight futures session to the chart below.

German courts are scheduled to rule whether Germany can even participate in European bailouts this Wednesday. Given the action in the Euro it looks like the answer won’t be positive. Indeed, there are rumors swirling that Germany may in fact even pull out of the EU altogether (I’ll believe this when I see it).

One thing is for sure, the European markets are in a free-fall. Germany and France’s stock markets fell 5% and 4% respectively. By the looks of things, they’re heading straight into their version of a 2008 type event.  Given how interconnected the global banking system has become, this could very well spill over into the US in short order.

Indeed, the US stock markets have collapsed in the overnight session. I’ve added the drop  to the below chart. One more hard down day and we’re at new lows for this collapse (as I forecast a week ago).

We have now wiped out almost all of the gains of the last week and a half and it looks as though we are heading rapidly into the 2008-type Collapse I’ve been warning about for weeks.

If you’ve yet to take steps to prepare your portfolio and your loved ones for what’s coming, NOW is the time to do so. Because at the pace we are going, we could see a full-scale market Crash within the next week or two.

However, that’s not all we’re facing. If the European banking system collapses, we could very well see a Round of Systemic Risk that could involve bank holidays, food shortages, civil unrest, and more.

This is why I released my three special reports titled, Prepare Your Family, Prepare Your Savings, and Prepare Your Portfolio: to help my Private Wealth Advisory subscribers prepare these areas of their lives for a Crisis that will make 2008 look like a picnic.

In terms of specific investment strategies, I’ve also had my clients move into our Special Crisis Trades: the very same trades we used to make triple digit returns in 2008.

So we’re positioned for whatever may come. In fact, the worse things get, the greater our profits will be.

If you’re ready to take action now, prepare your personal finances and loved ones for what’s coming, and potentially even lock in triple digit winners when the Crash come, you NEED to take our a trial subscription to my Private Wealth Advisory newsletter.

You’ll immediately be given access to my Prepare Your Family, Prepare Your Savings, and Prepare Your Portfolio reports telling you in pain-staking detail how to prepare these areas of your life for what’s coming.

You’ll also join my private client list (including executives at some of the largest corporations in the world as well as every major financial firm on Wall Street) in receiving my bi-weekly market analyses and real-time investment alerts, devoted to helping you profit in any market environment.

To do so… and start preparing for a Crisis that will make 2008 look like a picnic (heck just look at the first leg down that occurred in early August)…

Click Here Now!!!

Best Regards

Graham Summers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“The bottom is in! Stocks are in a new bull market. QE 3 is just seconds away!”

These are the taglines being tossed around by the mainstream financial media as stocks get rammed higher into month’s end. As usual these folks are both clueless and wrong.

We had the exact same move at the end of June when the market exploded over 8% due to end of the month (and quarter) performance gaming and start of the month/ quarter buying.

Here’s what followed:

So here we are again…  it’s the end of the month, volume is extremely light because of the upcoming weekend… and SURPRISE! Stocks are exploding higher again. In fact, we’re up 9%, quite similar to the 8% rally at the end of June.

Folks, this current move is just another trader game occurring on next to no volume. It will end precisely as the end of June rally did: in misery.

Indeed, the credit markets haven’t budged from being on DEFCON 1 throughout this rally. The European banking system continues to implode with Germany and France now being drawn into the mess. And the US economy is an absolute disaster no matter what the fudged data says.

QE 3 won’t solve this mess (assuming it even arrives). Neither will the European bailout fund. We’re already in the Second Round of the Great Crisis which will see the EU broken up, the US economy implode, and a market collapse that will make 2008 look like a joke.

 

Take a look at what happened in Greece earlier this year. That’s what’s coming to the US: market crashes, bank holidays, civil unrest, shortages, and more. Many people are going to see their portfolios get completely destroyed.

But you don’t have to be one of them.

Indeed, I can show you how to turn this period into a time of profits, NOT pain. To whit, my clients actually made money in 2008, having been warned a full three weeks in advance of the Crash to get out the market and go short.

I believe we could see another 2008 situation unfold in the near future, which is why I just unveiled six specific trades to subscribers… all of which will pay off HUGE returns as the current stock market collapse accelerates.

We’ve also taken steps to prepare ourselves sand our loved ones for what’s coming to the US economy (bank holidays, food shortages, stock Crashes, debt defaults, civil unrest and more) with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports: 40+ pages of material devoted to showing individual investors how to prepare these areas of their lives in great detail.

So we’re ready for whatever may come. And the worse things get… the more profitable our strategy will be.

If you’ve yet to take these steps yourself, it’s not too late… in fact, you’ve still got time to get your financial “house” in order to not only survive what’s coming… but potentially even make serious money from it.

All you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter. You’ll immediately be given access to the Private Wealth Advisory archives. You’ll also receive copies of the reports I detail above… and you’ll also be on my private client list to receive my bi-weekly investment reports as well as real-time trade updates on when to buy and sell various investments.

And if you should decide that Private Wealth Advisory is not for you, you can ask for a full refund during the first 30 days and I’ll return every cent of your subscription cost.

The reports you’ve downloaded during your “trial” period are yours to keep, even if you choose to cancel.

To get started with you Private Wealth Advisory subscription today, download the Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports and start taking action to prepare for what’s coming…

Click Here Now!

Good Investing!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The financial world is swirling with numerous claims that the Fed telegraphed QE 3 will be coming at its September FOMC meeting. I don’t see this at all. All that Fed did was admit that its September meeting will be two days instead of one so it can have a “fuller discussion” about things.

A “fuller discussion” doesn’t mean anything. This was just Bernanke throwing the markets a bone so they wouldn’t implode with no QE 3. The majority of his speech was devoted to blaming Congress for his complete and utter lack of understanding of finance and capital markets.

Of course I get what Bernanke’s doing (it was just revealed that he funneled $1,2 trillion to Wall Street behind the scenes). The guy’s going to want to divert attention (and blame) to someone else. And with various Wall Street CEOs now hiring defense lawyers for the REAL wave of litigation, you better believe Bernanke’s getting worried about what’s coming his way in the future.

As for the Fed’s “fuller discussion” in September coming up with QE 3 or something else, give me a break. Do you really think the Fed hasn’t already discussed QE 3 and every other insane intervention you can imagine over since the Financial Crisis began in 2008? Do you really think that the Fed’s magically going to come up with something new that will fix the Financial System?

Let’s be blunt here, the only thing that will cause QE 3 to come out will be :

1. Another market Crash (S&P 500 sub-100) or
2. A major bank collapsing.

That’s it. QE 3 is not going to be some “let’s push stocks higher” move. It’s going to be a “desperately trying to hold the system together” move.

Now, about the stock rally that began on Friday.

This is not the first market rally that’s occurred as an insane reversal after a disappointing Fed statement. We had the exact same move occur after the Fed’s disappointing August 9^th FOMC. That move had “market intervention” written all over it.

This one did too. Indeed, it’s just a little odd that both of the last two Fed announcements saw the markets sell off hard then suddenly stage insane rallies.

What’s even stranger is that the credit markets haven’t bought into either of these moves at all. Do you really think that QE 3 is coming in a few weeks?

Another thing… shouldn’t Gold be exploding higher if QE 3 was just around the corner? Would it really be forming a Head and Shoulders if more monetization was coming?

 

Let’s just call this latest rally for what it is: end of the month performance gaming aided by clear Fed intervention in the markets last Friday. This will end badly just as the last rally did (we wiped out ALL of its gains in a few days).

To me, the message is clear. The Fed won’t be unleashing QE 3. And the markets remain on Red Alert. Indeed, we’ve had several insane snapback rallies during the 2008 collapse. Indeed, in the span of two months we saw three rallies of 11%, 17% and 20%.

These last few rapid rallies have the exact same feeling to them. And they will very likely end the same way: in disaster. Many people are going to see their portfolios get completely destroyed.

But you don’t have to be one of them.

Indeed, I can show you how to turn this period into a time of profits, NOT pain. To whit, my clients actually made money in 2008, having been warned a full three weeks in advance of the Crash to get out the market and go short.

I believe we could see another 2008 situation unfold in the near future, which is why I just unveiled six specific trades to subscribers… all of which will pay off HUGE returns as the current stock market collapse accelerates.

We’ve also taken steps to prepare ourselves sand our loved ones for what’s coming to the US economy (bank holidays, food shortages, stock Crashes, debt defaults, civil unrest and more) with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports: 40+ pages of material devoted to showing individual investors how to prepare these areas of their lives in great detail.

So we’re ready for whatever may come. And the worse things get… the more profitable our strategy will be.

If you’ve yet to take these steps yourself, it’s not too late… in fact, you’ve still got time to get your financial “house” in order to not only survive what’s coming… but potentially even make serious money from it.

All you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter. You’ll immediately be given access to the Private Wealth Advisory archives. You’ll also receive copies of the reports I detail above… and you’ll also be on my private client list to receive my bi-weekly investment reports as well as real-time trade updates on when to buy and sell various investments.

And if you should decide that Private Wealth Advisory is not for you, you can ask for a full refund during the first 30 days and I’ll return every cent of your subscription cost.

The reports you’ve downloaded during your “trial” period are yours to keep, even if you choose to cancel.

To get started with you Private Wealth Advisory subscription today, download the Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports and start taking action to prepare for what’s coming…

Click Here Now!

Good Investing!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

 

The market rally that began on Friday and continues today is largely based on end of the month performance gaming. Normal market action doesn’t involve every asset under the sun rallying together. And given that the Fed didn’t announce QE 3 (and despite many claims to the contrary, didn’t telegraph it either), there was no reason for stocks to explode higher on Friday.

Regardless of the reasons for the move, stocks are now coming up against resistance at 1,200 on the S&P 500:

What happens here will go a long ways towards explaining what’s to come. It’s worth noting that the credit markets have shown no indication of bullishness (nor of QE 3 coming for that matter).

Similarly, Gold has the makings of a Head and Shoulders top:

This pattern, if confirmed, will see Gold at $1,600 in short order. Given how overstretched the precious metal had become, this is quite possible.

On a final note, the Euro could be in the final stages of intervention/ bailouts. On September 8, a German court will be ruling whether it is constitutional for Germany to participate in EU bailouts. Consider that 6% of Germans feel the Euro has brought economic disadvantages and that the German elections are scheduled for just a few weeks later, and we could very well see the court rule to end Germany’s participation in the bailouts.

Which would mean Game. Set. Match. for the Euro and the EU in its current form. Indeed, judging from the credit markets and the ongoing liquidity Crisis in Europe,

I fully believe we could see another catastrophic Crash similar to 2008 in the coming months.

The similarities between this environment and 2008 are striking. We have a major bank on the brink of collapse (Bank of America). The credit markets are in major disarray. Liquidity is drying up. And so on.

Many people are going to see their portfolios get completely destroyed.

But you don’t have to be one of them.

Indeed, I can show you how to turn this period into a time of profits, NOT pain. To whit, my clients actually made money in 2008, having been warned a full three weeks in advance of the Crash to get out the market and go short.

I believe we could see another 2008 situation unfold in the near future, which is why I just unveiled six specific trades to subscribers… all of which will pay off HUGE returns as the current stock market collapse accelerates.

We’ve also taken steps to prepare ourselves sand our loved ones for what’s coming to the US economy (bank holidays, food shortages, stock Crashes, debt defaults, civil unrest and more) with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports: 40+ pages of material devoted to showing individual investors how to prepare these areas of their lives in great detail.

So we’re ready for whatever may come. And the worse things get… the more profitable our strategy will be.

If you’ve yet to take these steps yourself, it’s not too late… in fact, you’ve still got time to get your financial “house” in order to not only survive what’s coming… but potentially even make serious money from it.

All you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter. You’ll immediately be given access to the Private Wealth Advisory archives. You’ll also receive copies of the reports I detail above… and you’ll also be on my private client list to receive my bi-weekly investment reports as well as real-time trade updates on when to buy and sell various investments.

And if you should decide that Private Wealth Advisory is not for you, you can ask for a full refund during the first 30 days and I’ll return every cent of your subscription cost.

The reports you’ve downloaded during your “trial” period are yours to keep, even if you choose to cancel.

To get started with you Private Wealth Advisory subscription today, download the Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports and start taking action to prepare for what’s coming…

Click Here Now!

Good Investing!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

 

One of the primary arguments that the world is in “recovery” comes from the decoupling argument: namely that emerging market economies have grown to the point that they will hold up even if there’s a downturn in the US economy.

For certain, emerging market economies have indeed experienced economic growth and stock market gains far exceeding those of the US and other developed countries. Possibly, the best example of this is Brazil which has seen an inflow of fresh capital from investors looking for greater returns that those proffered by developed nations and increased domestic growth courtesy of commodity prices rising (Brazil is the largest exporter of many commodities).

In simple terms, the fundamentals in Brazil were much better than those in the US in the post-2008 Crash period. As a result of this, the Brazilian market bottomed in November 2008 (compared to March 2009 for the S&P 500), and more than tripled from its market bottom vs. a 95% rally in the S&P 500.

Given this relative strength, many bulls believe that Brazil (and other emerging markets like it) have “decoupled” from the US economy, meaning that these emerging market economies are strong enough to stand on their own two legs and will hold up regardless of what happens in the US.

However, this whole belief came crashing down earlier this year when the Brazilian market first peaked out before falling further than the S&P 500 in this latest market rout: the Brazilian ETF is now 23% off its highs compared to 16% for the S&P 500.

Moreover, Brazil’s growth forecasts have now been lowered for three weeks in a row as inflation soars and the global economy slows. Indeed, even Brazilian economists have noted that the global economy slowing is impacting Brazil:

Forecasts for Brazil’s economic growth are being driven lower by its tighter monetary policy and a slowing global economy, a central bank survey showed on Monday, signaling a steeper-than-expected slowdown is looming.

The central bank survey found that forecasts for economic growth this year fell for a third week to a median 3.84 percent in the week ended Aug. 19.

The situation holds true for China (the emerging market “darling”) as well: the Chinese market is over 20% off its highs and Chinese GDP estimates are falling. So right off the bat we see the “emerging market decoupling” thesis being refuted by both the markets AND mainstream economists.

Indeed, it is quite telling that the S&P 500 has fallen far less than the BRIC markets: the S&P 500 is 16% off its highs, while Brazil is off 23%, Russia is off 22%, China is off 20%, and India is off 28%.

So right off the bat, the “emerging market decoupling” argument falls flat on its face. So scratch that as a reason that the global economy and financial markets will improve in the near future.

Indeed, I fully believe we have entered the Second Round of the Great Crisis: the Sovereign Default Round. What’s coming will involve stock crashes, civil unrest, food shortages, bank holidays and more. Many people are going to see their portfolios get completely destroyed.

You don’t have to be one of them.

I can show you how to turn this period into a time of profits, NOT pain. To whit, my clients actually made money in 2008, having been warned a full three weeks in advance of the Crash to get out the market and go short.

I believe we could see another 2008 situation unfold in the near future, which is why I just unveiled six specific trades to Private Wealth Advisory subscribers… all of which will pay off HUGE returns as the current stock market collapse accelerates.

We’ve also taken steps to prepare ourselves sand our loved ones for what’s coming to the US economy (bank holidays, food shortages, stock Crashes, debt defaults, civil unrest and more) with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports: 40+ pages of material devoted to showing individual investors how to prepare these areas of their lives in great detail.

So we’re ready for whatever may come. And the worse things get… the more profitable our strategy will be.

If you’ve yet to take these steps yourself, it’s not too late… in fact, you’ve still got time to get your financial “house” in order to not only survive what’s coming… but potentially even make serious money from it.

All you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter. You’ll immediately be given access to the Private Wealth Advisory archives. You’ll also receive copies of the reports I detail above… and you’ll also be on my private client list to receive my bi-weekly investment reports as well as real-time trade updates on when to buy and sell various investments.

And if you should decide that Private Wealth Advisory is not for you, you can ask for a full refund during the first 30 days and I’ll return every cent of your subscription cost.

The reports you’ve downloaded during your “trial” period are yours to keep, even if you choose to cancel.

To get started with you Private Wealth Advisory subscription today, download the Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports and start taking action to prepare for what’s coming…

Click Here Now!

Good Investing!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

 

I’ve warned many times that QE 3 will not be coming any time soon and that stocks are on very VERY thin ice.

With that in mind, I wanted to alert you to the following news story:

Those looking for a clear and unambiguous green light for QE3 from Fed Chairman Ben Bernake’s much anticipated speech in Jackson Hole on Friday could be disappointed.

There are three reasons that add up to Bernanke likely falling short of market expectations for an all-out endorsement of additional Fed [cnbc explains] action at the annual meeting of central bankers in Wyoming the way he telegraphed QE2 [cnbc explains] last year.

It’s also rare for a Fed chairman, especially one this consensus-oriented, to get too far out front of his committee. The August policy statement clearly showed a willingness of the committee to conduct additional asset purchases.

This article was written by Steve Liesman of CNBC. Liesman is known to have extremely close ties to the Fed. So for him to write this sort of story before the Fed’s Jackson Hole meeting (Friday) is EXTREMELY significant.

Consider that the only reason the market is holding up is due to the bulls desperately hoping the Fed will unleash QE 3 this Friday. Now consider that Bank of America is close to collapsing at the very same time that the European debt contagion is threatening to take down the entire European banking system (Germany is increasingly unlikely to give the “greenlight” to more bailouts).

In this environment, for the Fed to NOT unleash QE3 on Friday could cause a full-scale market collapse. So it would make plenty of sense for the Fed to try and do some damage control ahead of time with stories similar to Liesman’s.

Now, have a look at Gold’s action this morning: the precious metal is down over 3% in just a few hours. Do you think perhaps some “well-connected” investors might know that Bernanke isn’t going to unveil QE 3 tomorrow (the Fed has a precedent for leaking information to the “chosen” few).

If QE 3 were coming, Gold shouldn’t correct. The same is true if BAC were going to be bailed out suddenly: Gold should keep rallying. But instead Gold is falling sharply.

The same goes for Brazil: THE commodity player and one of the emerging market darlings for the Bulls. Does this chart look like we’re about to see QE 3 (which would send commodities through the roof)?

Again, this is a major signal that QE 3 is not coming. Those who are hoping it will need to look at what the markets are telling us. Ignore stocks and pay attention to the credit markets: they’re on DEFCON 1 RED ALERT.

I fully believe we’re about to see another catastrophic Crash similar to 2008. Many people are going to see their portfolios get completely destroyed.

You don’t have to be one of them.

I can show you how to turn this period into a time of profits, NOT pain. To whit, my clients actually made money in 2008, having been warned a full three weeks in advance of the Crash to get out the market and go short.

I believe we could see another 2008 situation unfold in the near future, which is why I just unveiled six specific trades to subscribers… all of which will pay off HUGE returns as the current stock market collapse accelerates.

We’ve also taken steps to prepare ourselves sand our loved ones for what’s coming to the US economy (bank holidays, food shortages, stock Crashes, debt defaults, civil unrest and more) with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports: 40+ pages of material devoted to showing individual investors how to prepare these areas of their lives in great detail.

So we’re ready for whatever may come. And the worse things get… the more profitable our strategy will be.

If you’ve yet to take these steps yourself, it’s not too late… in fact, you’ve still got time to get your financial “house” in order to not only survive what’s coming… but potentially even make serious money from it.

All you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter. You’ll immediately be given access to the Private Wealth Advisory archives. You’ll also receive copies of the reports I detail above… and you’ll also be on my private client list to receive my bi-weekly investment reports as well as real-time trade updates on when to buy and sell various investments.

And if you should decide that Private Wealth Advisory is not for you, you can ask for a full refund during the first 30 days and I’ll return every cent of your subscription cost.

The reports you’ve downloaded during your “trial” period are yours to keep, even if you choose to cancel.

To get started with you Private Wealth Advisory subscription today, download the Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports and start taking action to prepare for what’s coming…

Click Here Now!

Good Investing!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

Now that the market has rolled over and erased most of the gains from last week, I can’t help but wonder just why the market rallied at all. True, it was oversold… but the FOMC announcement wasn’t exactly bullish (Seriously… ZIRP for another year was reason for an 8% rally in four days?).

I found it interesting that the New York Post published a story containing the following quote just 3 hours before the post-FOMC market ramp job started.

Back in October 1989, a guy named Robert Heller, who had just quit his post as a Fed governor, suggested that the government should purchase stock index futures contracts to calm the markets in times of distress.

“The Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole,” Heller wrote in an op-ed piece in The Wall Street Journal after saying the same thing in a little-noticed speech. “The stock market is certainly not too big for the Fed to handle.”…

This is a rather odd turn of events… a former Fed official urges the Fed to step in and buy the stock market… just three hours before the markets mysteriously reverses and rallies hard on no real news of note.

This begs the question… did the Fed buy the market to put a floor under the collapse? There’s no telling for sure. But it’s rather odd that this article came out just three hours before the market magically reversed and exploded higher

If the Fed did actively buy the stock market to try and put a floor under it, we can assume three things:

1. The Fed is becoming truly desperate
2. The Fed realizes QE isn’t helping
3. QE 3, if it arrives, will be coming later down the line

If the Fed did in fact buy the market two weeks ago, then the Fed is getting extremely desperate. We know the Fed has been supplying juice to key Wall Steet firms who then bought the market, but never before has it been so obvious that the Fed itself may have been buying the market.

Remember since March 2009, QE has been the primary tool the Fed used to deal with the Financial Crisis. QE 1 was something of a success in that in restored investor confidence in the system. However, as I’ve noted in previous articles, by the time we got to QE 2, the negative consequences of QE (inflation) far outweighed the positive consequences (stocks rising).

So the fact the Fed did not announce QE 3 two weeks ago but chose to buy the market (at least it looks that way), indicates then we’re are DEFCON 1 RED ALERT for the entire financial system as it indicates that the Fed is abandoning its more traditional monetary tools and simply trying to buy the market it means the Fed is losing control of the system in a big way.

It also indicates that the Fed realizes that the benefits of QE come at too high of a cost for it to engage in more of this for now. Instead, the Fed will save QE 3 for a little further down the road as a final Hail Mary pass.

Which brings me to the most important point from yesterday’s Fed FOMC: there were three dissenting votes (an 18 year high). This tells us that Bernanke’s “inflate or bust” mentality is coming up against serious friction at the Fed. And it also tells us that there will be fierce resistance to QE 3 if the Fed chooses to unveil it down the road.

The take home point here is that the Fed is not as market friendly as before. There is growing dissent amongst Fed officials. And we’re beginning to see signs of desperation.

In plain terms, the situation in the markets right now is very VERY dangerous. It is easily the most dangerous market I’ve ever seen. We are going to see greater losses and sharp rallies. But the overall trend is now down.

I warned to get defensive several weeks ago. That warning is even more important now. I would avoid stocks and Treasuries as neither are particularly safe. I’d have increased exposure to cash and PHYSICAL bullion (Gold and Silver). If you have to remain long stocks shift into large-caps and companies that will exist a year from now (brands and industries people will need regardless of how bad the economy gets).

However, if you’re looking for actionable investment ideas and in-depth market analysis that will not only get you through this mess, but actually help you make some money, you NEED to get in on my Private Wealth Advisory newsletter.

Over the last two weeks, while 99% of investors got crushed, Private Wealth Advisory subscribers locked in seven winners including gains of 6%, 7%, and 9% in as little as one day (no we were not using options, just stocks and ETFs).

My readers made money in 2008 and the Euro Crisis of 2010. They’re making money now. Almost all of our portfolio rose double digits last week.

My readers are also taking steps to prepare their families and loved ones for what’s coming with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports, which are also included with every Private Wealth Advisory subscription.

To join them…take action to get your financial house in order… and start making this Crisis grow your portfolio instead of crushing it…

Click Here Now!!!

Good Investing!

Graham Summers

 

 

 

 

Looking out on the markets before the week begins the mood is very, very tense.

The European debt crisis continues to intensify with Greece moving to save one of its smaller banks (Proton) from failure. The Greek bank system does not have FDIC-style insurance, so a bank failure there means that the possibility of losing all of one’s money is in fact very real.

Elsewhere in the Eurozone, Spain and Italy are increasingly coming under fire with the ECB revealing it has purchased 34 billion Euros worth of their debt in the last two weeks. As I’ve noted in previous pieces, these two countries are the REAL problem for the Eurozone: they’re too big to be bailed out.

How this particular mess will play out all depends on Germany. No German support for the ECB’s moves and you’ve got no EU. And German politicians are becoming increasingly negative about further aid.

Indeed, over the weekend Angela Merkel announced that Euro-bonds (the new idea of floating bonds backed by… the EU?!?) wouldn’t solve the EU’s problems. Germany’s Finance Minister said the same thing, pointing out that Germany would be required to make $3.6 billion in interest payments for Euro-bonds in the first year alone, with the amount likely to increase to over $36 billion per year after the first decade.

Merkel’s party got slammed in the March 2011 German elections. With the next round of elections coming up in roughly one month’s time (and 56% of Germans saying the Euro has brought them disadvantages), the fate of the Euro will likely be decided within the next four months.

The market seems to be sensing this with the Euro coiling tighter and tighter in a triangle pattern. When this pattern breaks (likely to the downside) the Euro will take out critical support at 140 and begin its break to new lows (below the May 2010 lows of 118):

Aside from the European situation, the world is experiencing a global liquidity crisis that is now bordering on a “2008” situation. I’ve been warning about this to my Private Wealth Advisory subscribers since early July. However, we’re now beginning to see even Goldman Sachs and other large institutions publicly calling for a Crash. In other words, BUCKLE UP.

The S&P 500 has now wiped out a year’s worth of gains, bringing stocks back to roughly where they were when the Fed announced QE lite. The snapback rally of early last week proved to be exactly what I thought it was: a bounce from oversold conditions.

The tell-tale sign is that we’ve since had a sharp reversal erasing all of those gains. One more down day and we’re on to new lows and officially into a bear market in the US (20% off the peak). Which would put us up there with Spain, Switzerland, Russia, Germany, Brazil, Italy, India, and nearly every other major market in the world.

I’ve said before that stocks are the last to “get it.” What I mean by this is that the bond and credit markets typically adjust to changes in the world much faster than stocks. This is definitely true today as the US stock market has held up relatively well. However, Treasuries have rallied beyond even their May 2010 highs and are now approaching their 2008 highs:

In plain terms, the market’s are in full-scale Crisis mode. While stocks have bounce hard temporarily the rest of the financial system is in a complete and utter panic.

I warned to get defensive several weeks ago. That warning is even more important now. I would avoid stocks and Treasuries as neither are particularly safe. I’d have increased exposure to cash and PHYSICAL bullion (Gold and Silver). If you have to remain long stocks shift into large-caps and companies that will exist a year from now (brands and industries people will need regardless of how bad the economy gets).

However, if you’re looking for actionable investment ideas and in-depth market analysis that will not only get you through this mess, but actually help you make some money, you NEED to get in on my Private Wealth Advisory newsletter.

Over the last two weeks, while 99% of investors got crushed, Private Wealth Advisory subscribers locked in seven winners including gains of 6%, 7%, and 9% in as little as one day (no we were not using options, just stocks and ETFs).

My readers made money in 2008 and the Euro Crisis of 2010. They’re making money now. Almost all of our portfolio rose double digits last week.

My readers are also taking steps to prepare their families and loved ones for what’s coming with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports, which are also included with every Private Wealth Advisory subscription.

To join them…take action to get your financial house in order… and start making this Crisis grow your portfolio instead of crushing it…

Click Here Now!!!

Good Investing!

Graham Summers

 

 

 

We’re introducing a new component to Gains Pains & Capital: an editorial focus on successful business practices and entrepreneurialism. Too much economic commentary focuses strictly on the markets… which, as we all know, is not the same thing as the economy.

So once a week, we’re going to be focusing on entrepreneurs, businesspeople, and artists from all walks of life who are using their talents to create high quality products and services that sell, potentially create jobs, and ultimately put the economy back on track.

This week we’re talking to Mark Courseille, head pastry chef at Michel, the newest restaurant to be opened by food legend and all around culinary genius Michel Richard (you’ll hear more about him in a week or two) in Tyson’s Corner Virginia.

I first met Courseille after my wife and I enjoyed one of the best meals of our lives at Michel. The highlight of the night was the “chicken” we had for dessert, one of Courseille’s signature dishes.

See for yourself.

This is a meringue, shaped like a hen, filled with luscious ice cream and sitting atop a nest of brittle sugar “straw,” whipped cream, and a pool of caramel syrup.

The combination of textures and flavors was absolutely incredible. In each bite you had the sweet but brittle meringue combined with the soft, cold ice cream, as well as the caramel and sugar “nest.” Add to these unbelievable flavors the sheer fun of having “chicken” for dessert and this was hands down the most memorable dessert my wife and I have ever shared.

However, this was more than just a dessert, it was almost a marketing tool for the restaurant as a whole: as soon as our order came out, every table around us ordered one too. By the time we’d left I counted six others being served… all based solely on the appearance of our initial order.

Needless to say, Courseille had created something that was not only delicious, but an additional revenue stream for his employer (the “chicken” sells for $12, and to be honest, I would have paid $20 for it, it’s that good). Whether the guy knows it or not, he’s a marketing genius (on top of a master pastry chef). I had to meet him.

We recently sat down for coffee and talked desserts, the restaurant industry and more. The first thing I asked him was what inspired the “chicken” dessert.

“When people eat desert, they do it for pleasure, not out of hunger. So I try to create something that will make them happy, not just something that tastes great. I want my desserts to be fun, desserts that remind them of their childhood, something they will remember after they’ve left the restaurant and will tell their friends about.”

How do you do this?

“For me pastry is about presentation as much as it is about taste. If you are just going to go for taste, people will enjoy it, but it will not stand out in their minds. So for my desserts, I really try to be very precise and meticulous in the presentation. I try to make something people enjoy seeing as well as eating.”

But your desserts aren’t simply interesting to look at; they’re almost funny or playful. You make everything from Christmas Trees to Clowns.

“That is something I learned from Michel (Richard, 2007 James Beard winner for outstanding chef and owner of Michel where Courseille works). He was also a pastry chef before he became a chef. And he’s one of the masters of creativity in the kitchen. For instance, he designed a crème-caramel cheesecake. Normally when you eat American cheesecake, it’s heavy and leaves you very full.

So Michel combined a crème-caramel, a light French dessert, with cheesecake, a heavy American dessert, to make something that was both familiar and yet completely new. So when people ordered it, they get something that surprised them and made them laugh. It was not only delicious, but it created a very strong reaction for people so they remembered it. That’s the same impact I want my desserts to have.”

It’s also a unique hybrid of French and American cuisine. You’re combining two traditions into making something new.

“Exactly. This is the future of pastry and the restaurant industry in general. People don’t want just traditional French or American pastry. They can get this anywhere. Instead, you have to merge those two cuisines or find some other unique approach to creating food that people cannot find anywhere else. You need to make yourself stand out in some way, not just in terms of quality, but in terms of perspective.

This is a big focus for us at Michel: giving people something delicious that they cannot get anywhere else so they will remember it and hopefully come back for more of.”

It sounds like you aren’t making desserts, you’re making experiences.

“Yes. I am trying to make something that will make people feel good. As I said earlier, it’s not just taste. That is a big part of French culture that I’ve kept with me. In France you don’t rush cooking or eating. You don’t mind spending a lot of time cooking something that is really good. Eating good food especially with family and friends is a big part of my culture.”

And now you’re sharing that with the US.

“Yes. The restaurant industry has changed a lot in the last ten years. Before then, restaurants served either traditional food at a moderate price or very fancy food that was very expensive. But today you find that food and cooking are more celebrated in the US. People no longer go out just to eat all the time. More and more they go out to have something good. So the spectrum has become much wider allowing for many new perspectives.”

Has the recession changed this at all?

“A little bit. In the last few years, people went out more to celebrate things like a birthday or an anniversary than just to eat dinner. But if you focus on quality and offer something unique and memorable, people will come to eat at your restaurant even if they eat out less.”

So the economy makes them more selective.

“Exactly. That’s why I try to be creative with my desserts at Michel. People are now more careful about how they spend their money. So I have to really create something great that they will remember and want more of.”

This is the future of restaurants as you put it.

“Yes. People will pay for quality. But you cannot just charge any price. If you charge like $40 for a dessert, even if it’s an amazing dessert, people think to themselves, “That was good, but was it $40 good?” Price is not that flexible. So you need to create something of quality, that is memorable, and doesn’t cost too much. You don’t want the person to feel anything other than good at the end of the meal.”

That’s exactly what I thought when I ate the “chicken.” I only remember that it was amazing and how fun it looked. To be honest I didn’t even remember what it cost.

“Then I’ve done my job well.”

You know it’s interesting… without saying it explicitly, you’ve touched on three of the most important attributes of any businessman or entrepreneur. They are 1) to master a talent or skill. 2) Use that talent to create or offer something people value 3) Figure out the “sweet” spot for pricing.

“That is exactly how restaurants work, at least the ones that will succeed going forward. Chefs will have to be creative and original. They will have to create an experience that is memorable. That is what I try to do every day in the kitchen.”

Thanks for the thoughts Mark. We wish you and the rest of the folks at Michel great success.

“Thank you.”

My advice to readers and investors: do yourself a favor… consider what Mark is saying from the perspective of your own business or work. How can you do things in a way that will make people remember you and your work? What kind of experience are you making or selling with your product or service? And if you’re not selling an experience… why not? How could you create one for your clients?

Finally, to anyone who enjoys fine dining, I highly suggest swinging by Michel in Tyson’s Corner if you’re ever near the DC area. Anything you eat there will be amazing. Just make sure you save room for dessert. Who knows, you may find yourself whipping up a business idea of your own.

At the very least, you’ll have eaten one of the best meals of your life.

You can read more about Michel at:

http://www.michelrichardva.com/

Graham Summers

As much as the mainstream financial media likes to pretend that the financial crisis is over, unfortunately it isn’t. In fact, what’s going to happen next will very likely make 2008 look like a joke.

There is one simple reason for this: the “Fed” safety net that pulled the markets back from the brink is gone.

As noted in an earlier piece, the Fed is not going to be able to unleash QE 3 at any point in the near future. Indeed, the Fed is going to find it harder and harder to unveil any new program as we go into the election by virtue of the fact that it’s already become a political target for candidates (Perry, Paul, and Bachmann).

Given that the financial system is now more leveraged than during the Tech Bubble, that mutual funds are more heavily invested in stocks than at any point in the last 40 years (hello redemptions), that the derivatives market has not been reined in, that the global economy is once again turning sharply downward, that the EU and European banking system are collapsing, that the US economy is now clearly in a double dip (within the confines of an ongoing DE-pression), and that China is heading into a hard landing… the fact that the Fed will not be able to do much to stop the Crisis should have everyone freaking out.

Remember, for EVERY Crisis in the last 80 years, the answer was always “the Fed will fix it.”

However, with the Second Round of the Great Crisis at our doorstep, this time around it will be CLEAR the Fed DIDN’T “fix it.”  You don’t get a second collapse within three years of an allegedly one in 100-year event and come up with “yeah, the problem was fixed.”

We entered this Round in earnest in late July 2011. It isn’t over. The fact that the proposed solutions now involve floating bonds for entities that don’t even really exist (Eurobonds) should tell you how desperate it’s getting.

I hold by my former statements: this is the time to be defensive, moving into cash and non-cyclical sectors. Gold and Silver are a little too hot right now, so I wouldn’t be adding to positions there. The same goes for US Treasuries.

However, if you’re looking for actionable investment ideas and in-depth market analysis that will not only get you through this mess, but actually help you make some money, you NEED to get in on my Private Wealth Advisory newsletter.

Over the last two weeks, while 99% of investors got crushed, Private Wealth Advisory subscribers locked in seven winners including gains of 6%, 7%, and 9% in as little as one day (no we were not using options, just stocks and ETFs).

My readers made money in 2008 and the Euro Crisis of 2010. They’re making money now.

They’re also taking steps to prepare their families and loved ones for what’s coming with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports, which are also included with every Private Wealth Advisory subscription.

To join them…take action to get your financial house in order… and start making this Crisis grow your portfolio instead of crushing it…

Click Here Now!!!

Good Investing!

Graham Summers

 

 

According to French President Nicolas Sarkozy, he and Angela Merkel share an “absolute determination” to defend the Euro. I find that hard to believe as:

• 86% of Germans think the Euro is at risk.
• 71% of Germans are doubtful about the common currency.
• 56% of Germans say the Euro has brought them economic disadvantages.

The European bailouts were always ultimately about Germany. Without German support, you have no bail out and no EU either.

So with that in mind, we need to consider that Angela Merkel’s party was absolutely destroyed in the German March 2011 elections, largely because she had been pro-bailouts and pro-the Euro. She’s not out of the woods yet either.

The next round of German elections comes in September (the 4^th, 11^th, and 18^th). Is Merkel (and her party) really going to commit political suicide to support the Euro? After all, she would literally have to change the German constitution to participate in the creation of Eurobonds (the latest deranged ECB idea). You think the German people will go for that?

Me neither. Especially considering that the German economy is starting to roll over: GDP growth was only 0.1% (0.5% was expected). Both exports and imports fell upwards of 4%. It’s hard to believe the German people will want to continue bailing out Greece and other weaker EU countries when Germany itself is contracting.

However, in the very short-term, the Euro has been rallying for three primary reasons:

1. Shorts covering (Dealers were heavily short the Euro)
2. The Fed (QE 2 and most Fed action is aimed at bailing out European banks)
3. Political influence (hype and hope on Euro-bonds, Swiss pegs, etc)

Short term, the Euro might be the most heavily manipulated investment on the planet today. The dynamic between the US Federal Reserve, European Central Bank, and Swiss National Bank makes this situation nearly untradeable in the short-term.

However, the political/ economic/ monetary backdrop behind this mess remains the same: Germany cannot and will not be able to bail out all of Europe. The short-term moves are nothing more than drama. The EU in its current form has entered the End Game.

Whether we see weaker players kicked out (Greece and Portugal), some kind of larger EU split (North and South), or a complete dissolution (possible but highly unlikely), the EU will be breaking apart within the next year to 18 months.

Howe precisely this plays out remains to be seen. Right now the Euro looks to have broken out of a wedge pattern within a larger upward trading channel. Once we break the lower trendline (black) we’re going DOWN.

Which returns to a theme I’ve been expounding on for months now, that the Great Crisis has now entered its second round: the Sovereign Debt round, in which entire countries and regions will be going bust (rather than just private banks).

We entered this Round in earnest in late July 2011. It isn’t over. The fact that the proposed solutions now involve floating bonds for entities that don’t even really exist (Eurobonds) should tell you how desperate it’s getting.

I hold by my former statements: this is the time to be defensive, moving into cash and non-cyclical sectors. Gold and Silver are a little too hot right now, so I wouldn’t be adding to positions there. The same goes for US Treasuries.

However, if you’re looking for actionable investment ideas and in-depth market analysis that will not only get you through this mess, but actually help you make some money, you NEED to get in on my Private Wealth Advisory newsletter.

Over the last two weeks, while 99% of investors got crushed, Private Wealth Advisory subscribers locked in seven winners including gains of 6%, 7%, and 9% in as little as one day (no we were not using options, just stocks and ETFs).

My readers made money in 2008 and the Euro Crisis of 2010. They’re making money now.

They’re also taking steps to prepare their families and loved ones for what’s coming with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports, which are also included with every Private Wealth Advisory subscription.

To join them…take action to get your financial house in order… and start making this Crisis grow your portfolio instead of crushing it…

Click Here Now!!!

Good Investing!

Graham Summers

 

The action of the last few days has created rising bearish wedges in Brazilian ETF, S&P 500, and the Russell 2000.

Let’s start with Brazil as it’s become THE international “risk” market, leading all the other BRIC countries in the market (Brazil is blue, Russia green, China red, and India purple).

With that in mind, have a look at Brazil’s ETF which is forming something of a rising bearish wedge pattern. This is a termination pattern which means when it breaks it will likely be down and wipe out most of the gains of the last week.

Now, this pattern does have a bit of upside left in it. But we could just as easily take out the bottom trendline in which case, we’re on our way to new lows.

In the case of the S&P 500, this pattern is far more pronounced and rapidly nearing its apex.

As for the Russell, we’re right at the apex.

When you combine these patterns with the light volume that has occurred throughout this latest move upwards as well as the fact it’s moving on rumors (seriously, Eurobonds? You think Germans are going to support this?), we’re very likely going to see a reversal in the near future culminating in new lows for the year.

Remember, while all the focus is on the Fed and its response to the markets, the US economy continues to worsen. This morning’s Empire Manufacturing numbers were terrible. Add to this the recent market rout (which will impact sentiment surveys going forward) as well the all but guaranteed terrible 3Q earnings we’ll be seeing soon, and we’ve got a real economic downturn on our hands.

And people are viewing stocks as a great buy today?

We went for this same scheme back in 2008. At that time the US economy was clearly breaking down, the banking system was collapsing, and yet people were buying every dip and viewing every negative announcement with rose colored glasses.

We all know how that turned out.

On that note, if you’re looking for actionable investment ideas and in-depth market analysis that will not only get you through this mess, but actually help you make some money, you NEED to get in on my Private Wealth Advisory newsletter.

Over the last two weeks, while 99% of investors got crushed, Private Wealth Advisory subscribers locked in seven winners including gains of 6%, 7%, and 9% in as little as one day (no we were not using options, just stocks and ETFs).

My readers made money in 2008 and the Euro Crisis of 2010. They’re making money now.

They’re also taking steps to prepare their families and loved ones for what’s coming with my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports, which are also included with every Private Wealth Advisory subscription.

To join them…take action to get your financial house in order… and start making this Crisis grow your portfolio instead of crushing it…

Click Here Now!!!

Good Investing!

Graham Summers