Gains Pains & Capital

By Graham Summers, MBA

The stock market is finally waking up to fact that a recession is already here.

The first sign was copper.

Copper is commonly referred to as “Dr. Copper, the commodity with a PhD in economics.” The reason for this silly name is that the commodity is extremely economically sensitive due to it having so many industrial uses. When the economy is booming copper rallies and when the economy contracts, copper falls.

Copper has collapsed, wiping out half of its pandemic gains. That is correct, copper erased HALF of the entire move from the 2020 lows… a move that was fueled by over $15 trillion in global stimulus. And it did it in the span of two months.

Now it’s oil’s turn. 

Oil is used in practically everything you wear, eat, touch, or drive.

Oil or oil derivatives are present in lipstick, Vaseline, solar panels, polyester (stain resistant clothes), chewing gum, crayons, Aspirin, pantyhose, sneakers, detergent, CDs, concrete/cement, plastics of any kind, food additives, fertilizers, pesticides, candles, milk cartons, pen ink, and more.

Put simply, oil is extremely economically sensitive. And yesterday it was annihilated,

dropping over 9% in a single day to below $100 per barrel. The uptrend is broken here and the commodity is barely clinging to support.

Both of these commodities… which are HIGHLY associated with economic growth, are collapsing. What does this tell you about the true state of the economy today?

Worst of all, this spells BIG TROUBLE for the stock market. The last three recessions involved stock market crashes… will this one be any different?

Take a look at the following chart and tell me what you think…

If you’re looking for someone to help you navigate this mess, few analysts have the ability to navigate crises like I do.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

We are making just 100 copies available to the general public. And they are going fast.

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Yesterday I outlined that the Fed is once again lying to Americans about the risks they face.

The big lie of 2021 was that inflation was non-existent or “transitory.” We all know how that turned out. Inflation is at a 40-year high, gas is over $5 a gallon, and Americans have never spent more of their incomes on gas and food.

Now the Fed is back with another big lie. It’s the big lie of 2022: that the U.S. won’t enter a recession. For most Americans, the economy has been in recession for months.

The National Bureau of Economic Research (NBER) released a trove of data yesterday with its highly massaged GDP results. And BOY did it have some worrying stuff in it. Most worrying of all was the following:

Real Disposable Personal Income collapsed an incredible 12% in the first quarter of 2022. Even more incredibly, it has fallen in THREE of the last four quarters.

Unfortunately, it’s even worse than that. Look at the below table. Yes, you are reading that correctly, the collapse in Real Disposable Personal Incomes is larger than that which occurred during the 2008 recession.

This is why inflation is so devastating… because it destroys Americans’ pocketbooks. It’s also why every time inflation rises above 5%, a recession hits.

Remember, 75% of GDP is consumer spending. But if consumers have to cut back on their disposable spending because the basic cost of living (gas, food, etc.) is through the roof… you get a recession.

Like today.

So again, the Fed is LYING about the recession, just like it lied about inflation in 2021.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Over the last two days, I’ve been explaining how inflation has triggered a recession in the U.S.

By quick way of review:

1. The Fed lied about inflation throughout 2021, claiming it was non-existent or “transitory” meaning it would go away by itself.

• Once inflation, as measured by the Consumer Price Index (CPI), breaks above 5% a recession has followed every time in the last 50 years.

• CPI broke above 5% in September 2021.

• Inflation triggers a recession because it means consumers have to cut back spending (75% of GDP is consumer spending).

All of this is really bad news for stocks.

As I’ve written many times before, U.S. bonds, called Treasuries, are the bedrock of our current financial system. The yields on these bonds represent the “risk free” rate of return against which all risk assets are valued.

With that in mind, the ENTIRE drop in stocks thus far has been due to the “Price” in Price to Earnings, being adjusted to Treasury yields rising. With Treasury yields at 0.25%, investors were willing to pay 20 to 22 times forward earnings for stocks. But now that Treasury yields have risen to 3%, investors are only willing to pay 15-16 times forward earnings.

Put simply, the bear market in stocks thus far was ENTIRELY based on inflation… NOT on a recession. As I write this, the consensus Wall Street Earnings Per Share (EPS) in 2022 is around $230. A stock market valuation of 16 times earnings give us a fair value of 3,680 for the S&P 500.

And that’s roughly where stocks have fallen to thus far in this bear market.

Unfortunately for Wall Street and its delusional forecasts…The average recession results in EPS falling 25%. This would mean 2022 EPS is actually $172, NOT $230.

A stock market valuation of 16 times this new much lower EPS means the S&P 500’s fair value drops to 2,760.

That’s the blue line in the chart below.

The Fed lied about inflation… and it wiped out 30% of the stock market. The Fed is now lying about a recession… and it’s going to send stocks to levels most investors can’t imagine.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

We are making 100 copies of this report available to the public.

To pick up your copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By Graham Summers, MBA

The Fed’s lying again.

One of the BIGGEST LIES in financial history was the Fed’s claim that there was no inflation or that inflation was transitory in 2021.

How do I know this was a lie?

Because the Fed’s own research contradicted its claim!

If you’re unfamiliar with the Fed’s Beige Book, it’s a report the Fed publishes eight times per year.

In it, the 12 regional banks that comprise the Fed present anecdotal information on the U.S. economy. The Fed retrieves this information via interviews and conversations with business leaders, market experts and other people at the frontlines of the economy.

And throughout 2021, all of these people were SCREAMING that inflation was a major problem. In fact, the complaints about “rising costs” and “needing to raise prices” started as early as March 2021.

Despite this, the Fed argued that inflation was non-existent or would disappear shortly for another six months. We all know how that turned out. The Fed capitulated, inflation is roaring, and we’re all suffering as a result.

And unfortunately for us, the Fed is now pushing another WHOPPER of a lie.

That lie?

That the economy won’t enter recession later this year or the next.

How do I know this is a lie?

You guessed it… because the Fed’s own research contradicts it!

A recession is denoted by a prolonged period of economic contraction. And as everyone knows, the U.S. economy contracted in the first quarter of 2022. So if it contracts again in the second quarter… we’d be in recession.

The Fed runs a service called GDPNow that measures the economy in real time. According to this measure, the economy is flatlining in the second quarter. Sure, the beancounters might be able to massage the data to make it look as if the economy grew by a little bit… but look around you… does the economy feel like it’s booming to you?

It sure doesn’t to me. If anything it feels as if things took a major turn for the worse months ago.

And why wouldn’t they? After all, history has shown us that ANY TIME inflation breaks above 5%, the U.S. economy enters a recession. And inflation cleared 5% in September of last year!

Let’s cut through the BS here. We all know the U.S. is in recession. And we also know that by the time the Fed admits it, the market will have already collapsed to levels most investors don’t even want to imagine.

I’ll detail just how low stocks could go due to the recession in tomorrow’s article. In the meantime we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We made 100 copies to the public… and they are going fast.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

By Graham Summers, MBA

Yesterday I noted that the Fed is completely delusional about engineering a “soft landing.”

The reality is that the Fed has barely raised interest rates. As I write this rates are at 1.5%… while inflation as measured by the CPI is over 8%. And real inflation is likely much higher (CPI doesn’t accurately measure the cost of housing or other items). 

Meanwhile, the Fed has yet to shrink its balance sheet… at all. It claims it can shrink it by over $1 trillion. That’s amusing since the last time the Fed tried to shrink it balance sheet by even $500 billion (2018) the corporate debt market froze and the stock market crashed.

The summate… the Fed has done next to nothing to stop inflation. And already the markets have lost over $25 TRILLION in wealth. The NASDAQ alone has lost 33% of its value in the span of six months.

Moreover… the economy is already in recession. The Fed’s own data shows GDP growth went negative in 1Q22. And it’s barely positive thus far in 2Q22. Even if the Fed massages the data to insure we don’t see two quarters of negative GDP growth, the reality is that the markets are telling us a recession is here now. 

Copper is commonly called “Dr. Copper, the commodity with a PhD in economics” because it has so many industrial uses that its price is closely linked to economic growth. When the economy is booming copper rises and when the economy is contracting copper price falls. 

What is the below chart telling you?

Add it all up… and the best the Fed can hope for is “stagflation” or a period of high inflation combined with economic weakness. And that’s assuming the Fed knows what it’s doing… which given the fact the Fed claimed inflation was “transitory” for most of 2021, is unlikely.

So what does this mean for investors?

That inflation will continue to run hot MUCH longer than anyone expects. The Fed is bluffing when it states it can get inflation under control easily… it’s going to take a LONG time and involve a LOT of pain for anyone who buys into the Fed’s nonsense.

But you don’t have to suffer during this nightmare.

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We made 100 copies to the public… and they are going fast.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

By Graham Summers, MBA

The Fed is now telling us that it can avoid a recession… or engineer a “soft landing.”

It’s a pretty stunning argument… and it raises questions as to whether the Fed actually believes this stuff… of if it’s simply saying this for political purposes so people won’t panic.

Consider what the Fed has done so far in this tightening cycle.

The Fed has raises rates three times bringing them to 1.5%-1.7%. Historically, this is where rates would FALL TO during a market crash or economic downturn. Inflation, as measured by the Consumer Price Index or CPI is over 8%. So rates are extraordinarily low.

Meanwhile, the Fed has yet to shrink its balance sheet… at all.

That’s correct, despite all its claims of “taking action” and “moving to stop inflation” the Fed has yet to shrink its balance sheet. It’s literally done NOTHING in terms of draining liquidity from the financial system.

In simple terms, the Fed has done next to nothing to stop inflation. Rates are at levels that you would usually associate them to hit during easing cycles and the Fed’s balance sheet is ~$9 trillion.

Meanwhile, stocks and bonds have wiped out over $25 TRILLION in wealth… more than was wiped out during the Great Financial Crisis of 2008 and the pandemic Crash of 2020.

What does this all mean?

That inflation will continue to run hot MUCH longer than anyone expects. The Fed is bluffing when it states it can get inflation under control easily… it’s going to take a LONG time and involve a LOT of pain for anyone who buys into the Fed’s nonsense.

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We made 100 copies to the public… and they are going fast.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

By Graham Summers, MBA

Stocks are currently in a bear market. The average bear market is 9 months long and sees stocks lose 30%.

Thus far this bear market is six months old, and stocks are down just 21%. So, the issue is determining just how much further we have to go.

As I’ve mentioned previously, at the very least we can expect this bear market to see the S&P 500 break down to touch its 40-month moving average (this is the same thing as the 200-week moving average). The 40-MMA is illustrated by the red line in the chart below.

The bigger question is what happens there.

During the COVID-19 crash, the Fed moved to support the entire financial system. That is the only thing that stopped stocks from entering a full-scale crisis. 

During a full-scale crisis, the S&P 500 usually breaks its 40-MMA and then wipes out almost the entirety of the previous bull market’s gains. I’ve illustrated this with blue rectangles in the chart below. 

A similar move this time around would mean the S&P 500 falling to at least 1,750.

Will this happen? It’s certainly possible. As I mentioned a moment ago, the only thing that pulled the market back from the brink in 2020 was the Fed moving to ease monetary conditions in an extraordinary way.

This time around, the Fed is trying to tackle inflation… so easing would only worsen the problem! The Fed has only raised rates to 1% and will begin shrinking its balance sheet on June 15th… and stocks have already lost 20% of their value.

What happens when the Fed is forced to raise rates to FIVE percent or more. What happens when it tries to shrink its nine TRILLION dollar balance sheet by $1+ trillion.

You get the idea.

The Mother of All Collapses is coming!

The time to prepare is NOW before it hits.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

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

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By Graham Summers, MBA

The financial media is pushing the narrative that the Fed is about to “pivot” in terms of inflation.

Put simply, the argument is that inflation has peaked, so the Fed won’t need to raise rates by 0.5% past the month of September, at which point it will either PAUSE raising rates or continue to raise them albeit at a slower pace of 0.25% per raise.

And it’s total nonsense.

Inflation is now over 8%. The Fed funds rate is at 1%. Even if the Fed hikes rates to 3% by September (it won’t), it’s still NOWHERE near stopping inflation.

The people pushing this narrative in the media are being fed stories by fund managers who were desperate to game performance last month. Most funds had horrific months in May. And since they need to report their results at month end, they needed a reason to justify why stocks suddenly exploded higher for three days right at the end of the month.

Enter the “Fed pivot” narrative.

It’s total nonsense… but if spouting nonsense was a dealbreaker in this industry, most of the financial media would be out of business.

Let’s dive into this a bit more.

Inflation is over 8%.

The Fed has YET to shrink its balance sheet at all. As I write this, the balance sheet is within spitting distance of $9 TRILLION.

Meanwhile, the Fed funds rate is at 1%. 

Again, the notion that the Fed has done enough to take it easy regarding inflation is 100% nonsense.

History has shown us, quite clearly, that once inflation is in the financial system, the Fed CANNOT stop it with half measures.

This means that in order for the Fed to truly bring inflation to task… it will need to get AGGRESSIVE. 

Bear in mind that the meager efforts the Fed has made thus has already caused stocks to do this…

What happens when the Fed is forced to raise rates to FIVE percent or more. What happens when it tries to shrink its nine TRILLION dollar balance sheet by $1+ trillion.

You get the idea.

The Mother of All Collapses is coming!

The time to prepare is NOW before it hits.

For those looking to prepare for and profit from this mess, our Stock Market Crash Survival Guide can show you how!

Today is the last day this report is available to the public.

We extended our offer by an additional 24 hours due to the holiday weekend, but this is it… no more extensions!

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

The stock market is pretty scary these days, isn’t it?

Anyone who is bullish on stocks… or thinks they are cheap and worth buying, keeps getting wrecked. It’s not entirely their fault; the non-stop interventions by “someone” keep making it appear as if there are real buyers in the markets.

Yesterday showed us that there aren’t.

The S&P 500 came charging out of the gate yesterday… but gave up much of the gains around noon. If it weren’t for two OBVIOUS manipulations by “someone” which I’ve highlighted in the chart below, the market would have closed DOWN on the day.

This is the problem with blatant manipulation: it works in the short-term, but does nothing to fix the primary problem with the markets… namely that prices are not at levels at which REAL buyers want to buy.

One way to get around this issue is to focus on long-term charts. 

By focusing on what stocks are doing in weekly or monthly terms, you can tune out much of the “noise” caused by interventions that only last a few hours or even minutes.

Here is a monthly chart of the S&P 500. As you can see, the market has taken out its 10-month moving average (blue line). As the last eight years have shown, any time stocks do this, they end up dropping to at least the 40-month moving average (red line).

What’s REALLY scary about this chart is the fact that the last FOUR times this happened, the Fed stopped the collapse by easing monetary conditions.

This time around the Fed CANNOT ease monetary policy.  

Why? 

Because monetary easing unleashed the very thing what triggered the collapse in the first place: inflation. More easing will only make the situation worse!

Put simply, the Fed is NOT coming to the rescue this time. Stocks could very well break below that red line and wipe out years of gains.

The time to prepare is NOW before it hits.

Private Wealth Advisory subscribers are doing just that.

I recently told subscribers about the #1 investment to own during a bear market. This one investment alone is giving them peace of mind, and allowing them to avoid the pain and destruction caused by the markets.

But that’s not all…

We also opened three proprietary Crash Trades to profit from the collapse. 

As I write this ALL THREE are exploding higher.

Come join us in turning the coming crisis into a time of life changing gains!

To do so… all you need to do is take out a $9.99, 30-day trial to Private Wealth Advisory …

To do so…

The manipulations in the stock market are getting ridiculous.

“Someone” forced stocks higher on Friday. The S&P 500 rose 55 points in just 24 minutes started at 3:10PM. And when that didn’t do the job and sellers returned, the market was then forced 29 points higher in just three minutes!

So all in all, the S&P 500, one of the largest stocks markets in the world, was ramped roughly 2% higher via two interventions in the span of just 28 minutes.

Again, this is ridiculous.

Was it the Fed? A large hedge fund? Several institutions? Who knows. The only thing we do know is that it wasn’t real buyers looking to invest at those prices… this was abject manipulation.

The problem with this is that it doesn’t work… stocks have broken critical support (red line in the chart below) based on the Fed ending its money printing and raising rates to 1%.

Put another way, the Fed hasn’t even begun shrinking its balance sheet and already the S&P 500 is in a bear market.

The NASDAQ is even worse. It’s unwound more HALF of the entire move from the March 2020 bottom. And again, the Fed has barely begun to tighten monetary policy.

What happens when the Fed is forced to raise rates to FIVE percent (they’re 1% now)? What happens when it tries to shrink its nine TRILLION dollar balance sheet by $1+ trillion.

You get the idea.

The Mother of All Collapses is coming!

The time to prepare is NOW before it hits.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

We made 100 copies available to the public. As I write this, there are 49 left.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

The Fed is NOT coming to rescue stocks this time.

For decades, investors have been conditioned to “buy the dip” because the Fed invariably steps in to prop up the stock market whenever a collapse begins in earnest.

The Fed did this throughout 2009-2017, in 2018, and again from 2020-early 2022.

For this reason, investors continue to move into stocks, despite the fact stocks are clearly in a bear market. The below chart is clear: the uptrend (blue line) from the March 2020 lows is broken. Moreover, stocks have taken out critical support (red line). 

If you’re buying stocks because you believe the Fed is going to “save the day” again, you’re in for a world of hurt. Sure, the Fed has done this in the past… but inflation wasn’t present during those times.

It is now.

Basic economics tells us:

Demand + Supply = Price.

Supply for most items is down due to supply chain issues. Meanwhile, demand is UP due to the Fed and Federal Government pumping some $11 TRILLION into the financial system over the last two years.

Higher demand + Lower Supply = RAGING Inflation. 

The Fed cannot fix the supply issues. It can’t print oil, tin, copper, or any of the other commodities the economy needs. The Fed is also powerless to address the dock worker, trucker, transportation labor shortages the country faces.

This means the only way the Fed can kill inflation is to destroy demand by triggering a recession. Put another way… the Fed DOESN’T CARE about stocks.

If you don’t believe me, maybe you’ll be Fed President Esther George.

Kansas City Federal Reserve President Esther George said Thursday that higher interest rates are needed now to bring down inflation and that policymakers are not focused on the impact that is having on the stock market.

Source: CNBC

Bear in mind… inflation is at 8+%… rates are at 1%… the Fed hasn’t even begun shrinking its balance sheet yet… and stocks are already doing this:

What happens when the Fed is forced to raise rates to FIVE percent (they’re 1% now)? What happens when it tries to shrink its nine TRILLION dollar balance sheet by $1+ trillion.

You get the idea.

The Mother of All Collapses is coming!

The time to prepare is NOW before it hits.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

We made 100 copies available to the public. As I write this, there are 7 left.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

As I keep warning, the Mother of All Collapses is coming to the markets.

We’ve already detailed just how insane this Everything Bubble is.

1. Options trading volume (a sign of speculation) was exponentially higher than it was during the Tech Bubble which everyone on the planet now knows was an insane bubble.

• Crypto currencies that were invented as jokes (Dogecoin) were being valued at tens of billions of dollars.

• Tesla (TSLA), which sold ~300,000 cars in 2020, was worth more than the value of every other auto manufacturer on the planet combined.

• People were selling Non-Fungible Tokes (NFTs) of farts, toilet paper, New York Times articles and more.

All of the above items outline insane levels of speculation in individual assets, but they don’t fully illustrate just how MASSIVE this bubble is.

Check out the below chart from Jim Bianco.

Yes, the stock market is now valued at ~200% of GDP. And this level is actually down from 228% of GDP which was the peak last November.

The Tech Bubble, which everyone understands was an egregious stock market bubble, peaked at 182% of GDP in March of 2000.

Put another way, even with stocks down 20% from their all-time highs (more if you’re using the NASDAQ to calculate), today the stock market is still a larger bubble than the TECH BUBBLE AT ITS PEAK!

So again, the Mother of All Collapses is coming.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

We made 100 copies available to the public. As I write this, there are 25 left.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By Graham Summers, MBA

As I mentioned yesterday, the Mother of All Collapses is Coming

And if you think the Fed is coming to the rescue stocks this time, you’re sadly mistaken.

Historically the Fed “saves the day” by intervening in the markets whenever they come unhinged. Well, the markets are already down 20% and we haven’t heard a peep from the Fed. If anything, Fed officials are calling for the Fed to be more aggressive in tightening monetary policy.

There’s a reason for this: inflation.

The U.S. is experiencing its first inflationary storm since the 1970s. Inflation has become the #1 issue for voters. And it’s the mid-terms this year.

And the Fed is feeling the heat from the political classes.

President Biden, who appointed Jerome Powell to a second term as Fed Chair EXPLICITLY called out the Fed earlier this week.

As I said yesterday, inflation is a challenge for families across the country and bringing it down is my top economic priority. This starts with the Federal Reserve, which plays a primary role in fighting inflation in our country…[emphasis added]           

            ~President Biden speaking on inflation 5/10/22.

Yes, the White House is laying the blame for inflation SQUARELY on the Fed’s shoulders. The rest of the Beltway crowd as well as the media will soon be joining in.

Which means… the Fed is being forced to ignore stocks in order to end inflation. And it has a LOOONG ways to go.

Inflation is over 8%. The Fed has rates at 1%. And it has yet to even begin draining liquidity from the system with Quantitative Tightening.

And stocks have already done this:

What happens when the Fed is forced to raise rates to FIVE percent? What happens when it tries to shrink its nine TRILLION dollar balance sheet.

You get the idea.

The Mother of All Collapses is coming!

The time to prepare is NOW before it hits.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

We made 100 copies available to the public. As I write this, there are 37 left.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

The mother of all collapses is coming.

The Fed claims it can tackle inflation without triggering a crisis.

Good luck with that!

The Fed triggered a crisis with the Tech Bubble (a bubble in a single stock market sector) and the Housing Bubble (a bubble in a single asset class). And neither of those are remotely comparable to this last bubble.

This is the Everything Bubble: the bubble in every major asset class (stocks, housing, corporate debt, municipal debt, etc.)

Some of the most egregious signs of froth/ financial excess.

1. Options trading volume (a sign of speculation) was exponentially higher than it was during the Tech Bubble which everyone on the planet now knows was an insane bubble.

• Crypto currencies that were invented as jokes (Dogecoin) were being valued at tens of billions of dollars.

• Tesla (TSLA), which sold ~300,000 cars in 2020, was worth more than the value of every other auto manufacturer on the planet combined.

• People were selling Non-Fungible Tokes (NFTs) of farts, toilet paper, New York Times articles and more.

• “Meme stocks” or stocks that were traded for ironic/ humorous purposes were doing this:

• Former President Trump’s Special Purpose Acquisition Company (SPAC) rose to a value of $5 billion despite having no business or operations.

And the Fed believes it can somehow tackle inflation… AND dissipate this bubble without blowing things up?

Ok, I’ll bite.

Inflation is at 8+%. The Fed has raised rates to 1%. It has yet to even begin shrinking its balance sheet. And stocks have done this:

What happens when the Fed is forced to raise rates to 5%? What happens when it tries to shrink its balance sheet buy $1 trillion+?

You get the idea.

The Mother of All Collapses is coming.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

We made 100 copies available to the public. As I write this, there are 49 left.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

The market is now in very serious trouble.

The bond market is NOT calming down. Last week the yield on the all-important 10-Year U.S. Treasury (the most important bond in the world) spiked to new highs for this bull run.

Why does this matter?

Because the yield on this bond represents the “risk free” rate of return against which all risk assets are priced. Every move higher in this yields means risk assets (including stocks) will be priced lower.

Put another way, until the bond market calms down ALL BETS ARE OFF for stocks. This is why the S&P 500 took out critical support last week.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By Graham Summers, MBA

All eyes are on the Fed today.

Thus far the bond market doesn’t believe the Fed is serious about tackling inflation. Why would it? The Fed printed another $55 billion after its QE program supposedly ended… and has only raised rates by 0.25%.

Meanwhile inflation is clocking in at 8.5%.

This is why the yield on the 2-year Treasury continues to move higher… the bond market is telling the Fed that it (the Fed) hasn’t done enough. Put another way, the bond market doesn’t think the Fed’s current plan to tackle inflation is credible.

The 30-year Treasury is even more important than the 2-year. This is because bonds of longer duration do a better job of indicating what long-term implications of Fed incompetence.

Put simply, this yield NEEDS to stabilize, otherwise the Fed risks losing control and we enter a bond crisis shortly.

Again, all eyes are on the Fed today. Either the Fed’s strategy is credible and things stabilize… or it’s crisis time. And if it’s crisis time… buckle up, because this current bubble is even larger than the Housing Bubble.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

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