As I warned two weeks ago, the Fed is going to start buying “everything”… AKA Weimar lite. 

The Fed has faced a choice… either let debt deflation clear the bad debts from the system, even if it means major corporations and banks failing, OR start buying “everything” in an effort to prop up the system (even if it induces raging inflation).

Well, the Fed officially crossed the Rubicon over the weekend. Going into the weekend the Fed had already…

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched a $1.5 trillion repo program.

3)    Launched a $700 billion QE program.

4)    Begun buying commercial paper debt instruments.

5)    Opened the discount window to the eight largest banks in the US.

6)    Expanded the repo program to $1 trillion per day.

7)    Opened dollar swaps with international central banks.

8)    Opened credit windows to the money market funds market.

9)    Begin buying municipal bonds.

Well, buckle up, because over the weekend, the Fed announced it would make its QE program “open ended” meaning it would buy Treasuries and Mortgage Backed Securities as needed.

Put another way, the Fed announced unlimited QE. And to top it off, the Fed ALSO added that it was expanding its QE mandate to buy corporate debt (for the first time in history).

Put another way, the Fed has announced it is going to effectively monetize “everything,”… Treasuries, Mortgage Backed Securities, Municipal debt, Corporate debt, etc. The only thing debt assets left are student debt, auto loans, and credit card debt.

In simple terms, the Everything Bubble burst… and now the Fed is dealing with it by buying EVERYTHING.

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Whether or not this will work remains to be seen. But this is the NUCLEAR option. And if it doesn’t work, there is nothing left for the Fed to do. Remember, technically the Fed isn’t supposed to be able to buy municipal debt or corporate debt. So, it is moving FAR beyond its mandate with these actions.

The key chart to watch is the credit spread on Junk Bonds. While stocks tried to bounce time and again in the last few weeks, credit had continued to break down, warning that there was no bottom in sight.

If this chart breaks out to the upside, then we will finally get a bounce. We’re more than due for one…

The bigger issue… is if this works too well, and between the Fed pumping trillions into the financial system, and the federal government launching helicopter money, we begin to see roaring inflation.

Bond yields have begun rising, suggesting the bond market is beginning to discount inflation hitting the financial system. Moreover, the ratio between commodities and stocks has broken out of a multi-year falling wedge, which suggests commodities will be dramatically outperforming stocks going forward.

This too is signaling higher inflation is coming.

This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay ou 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 are making just 100 copies available to the public.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Fed is Now Officially Buying “EVERYTHING” But Will It Work?

The coronavirus has burst the Everything Bubble.

Regardless of what happens with the economy or the virus, the damage has been done to the massive debt bubble. Across the board, credit and debt markets have ended their bull markets.

To fight this situation, the Fed has gone NUCLEAR with monetary policy. In the last three weeks, the Fed has:

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched a $1 5 trillion repo program.

3)    Launched a $700 billion QE program.

4)    Begun buying commercial paper debt instruments.

5)    Opened the discount window to the eight largest banks in the US.

6)    Opened dollar swaps with international central banks.

7)    Opened credit windows to the money market funds market.

If these policies sound familiar, it’s because the Fed basically just ran through its entire 2008 playbook. The big difference this time is that instead of taking a year to do this like it did in 2008, the Fed ran through all of these polices in less than a month.

Thus far, none of these policies have worked.

As I write this Friday morning, stocks have yet to stage a meaningful bounce. As a result, we are now seeing calls for the Fed to start buying corporate debt and municipal debt.

We are also now beginning to see talk of helicopter money being implemented as well, including mailing checks to people who cannot work due to the coronavirus. This combined with various stimulus programs will mean TRILLIONS being injected directly into the financial system.

This is all going to unleash inflation.

Bond yields have begun rising, suggesting the bond market is beginning to discount inflation hitting the financial system.

This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay ou 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 are making just 100 copies available to the public.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Everything Bubble Has Burst… Now Comes the Inflationary Storm

The Everything Bubble Has Burst… Now Comes the Inflationary Storm


The coronavirus has burst the Everything Bubble.

Regardless of what happens with the economy or the virus, the damage has been done to the massive debt bubble. Across the board, credit and debt markets have ended their bull markets.

To fight this situation, the Fed has gone NUCLEAR with monetary policy. In the last three weeks, the Fed has:

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched a $1 5 trillion repo program.

3)    Launched a $700 billion QE program.

4)    Begun buying commercial paper debt instruments.

5)    Opened the discount window to the eight largest banks in the US.

6)    Opened dollar swaps with international central banks.

7)    Opened credit windows to the money market funds market.

If these policies sound familiar, it’s because the Fed basically just ran through its entire 2008 playbook. The big difference this time is that instead of taking a year to do this like it did in 2008, the Fed ran through all of these polices in less than a month.

Thus far, none of these policies have worked.

As I write this Friday morning, stocks have yet to stage a meaningful bounce. As a result, we are now seeing calls for the Fed to start buying corporate debt and municipal debt.

We are also now beginning to see talk of helicopter money being implemented as well, including mailing checks to people who cannot work due to the coronavirus. This combined with various stimulus programs will mean TRILLIONS being injected directly into the financial system.

This is all going to unleash inflation.

Bond yields have begun rising, suggesting the bond market is beginning to discount inflation hitting the financial system.

This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay ou 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 are making just 100 copies available to the public.

To pick up yours, swing by:

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

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on

The Everything Bubble has burst. The next crisis, the BIG one to which 2008 was the warmup, is fast approaching.

During the 2008 crisis, the Fed did three things:

  1. Cut interest rates to zero making credit all but free for banks.
  • Implemented large Quantitative Easing (QE) programs through which it printed $3.5+ trillion in new money to buy assets from large financial institutions, primarily mortgage backed securities and US government debt, also called Treasuries.
  • Urged the Financial Accounting Standards Board (FASB) to abandon “market to market” valuations for the banks, thereby allowing the banks to value the debts on their balance sheet at “make believe” prices.

Combined, these three policies, particularly #s 1 and 2, create a bubble in US Treasuries, forcing yields to extraordinary lows.

Treasuries are the bedrock of the global financial system. Their yields represent the “risk free” rate of return: the rate against which all risk assets (stocks, commodities, real estate, etc.) are priced.

So, when the Fed created a bubble in Treasuries, it created a bubble in EVERYTHING: the entire financial system became mispriced based on a false risk profile.

Every asset class in the world trades based on the pricing of bonds. So the fact that bonds are in a bubble (arguably the biggest bubble in financial history), means that EVERY asset class is in a bubble.

I am focusing on the Fed here, but the same policies played out in every major financial system.

The European Central Bank (ECB) employed the same policies in Europe, the Bank of England (BoE) employed the same policies in the UK, and the Bank of Japan, (BoJ) which had already been doing both ZIRP and QE since 2000, took these polices to even greater extremes.

The end result is central bankers created the BIGGEST, most egregious bubble in financial history. A $250 TRILLION debt bomb… with another $500+ trillion in derivatives trading based on its yields.

To put this into perspective, the Tech Bubble was about $15 trillion in size. The Housing Bubble, which triggered the 2008 Crisis, was about $30 trillion in size.

The bond bubble is over $250 TRILLION in size. Some $50 trillion of this is in sovereign debt, with the rest coming from corporate debt, mortgages, auto loans, credit cards and the like.

This mountain of debt is categorized based its riskiness. Not all debt is equal because of the fact that different borrowers have different levels of risk of default. For instance, an oil shale company that needs oil to trade at $60 per barrel is at much greater risk of default than a sovereign nation like the U.S..

For simplicities sake we’re going to ignore auto-loans, student debt, and credit card debt to focus on the truly systemically important debt.

Corporate, Municipal, and Sovereign/ National.

In the U.S., things rapidly moving up the bond food chain.

The Junk Bond corporate bond market bubble has burst.

A close up of a map

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The bubble in less risky corporate debt, called investment grade is about to do the same.

A close up of a map

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Further up the food chain, the bubble in high yield municipal bonds (bonds issued by cities, states and the like) has also burst.

A close up of text on a white background

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The BAD news is that the bubble in investment grade municipal bonds has ALSO burst.

A close up of a map

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This leaves sovereign bonds, or Treasuries. Right now, the bubble in U.S. treasuries remains intact with bond yields within a clearly defined bear market (bond yields fall when bond prices rise, so the bubble is stable).

A close up of a map

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This is NOT the case in Europe.

Germany is the largest most dynamic economy in Europe. As such Germany is the ultimate backstop for the EU. And German sovereign bonds are beginning to breakdown.

A close up of a map

Description automatically generated

Despite a deflationary collapsing, bond yields on the 10-Year German Government bonds is RISING, meaning those bonds are falling in value.

This SHOULD not be happening. German bond yields should be falling based on the deflation in the system right now.

Indeed, just this week Germany experienced a failed bond auction… meaning not enough buyers showed up to buy its bonds.

That kind of thing can happen from time to time… but for it to happen during a flight to safety like the one happening right now is a REAL signal that the EU’s bond market is in serious trouble.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Everything Bubble Has Burst, the Fuse is Now Lit on the $250 TRILLION Debt Bomb

The Everything Bubble has burst. The next crisis, the BIG one to which 2008 was the warmup, is fast approaching.

During the 2008 crisis, the Fed did three things:

  1. Cut interest rates to zero making credit all but free for banks.
  • Implemented large Quantitative Easing (QE) programs through which it printed $3.5+ trillion in new money to buy assets from large financial institutions, primarily mortgage backed securities and US government debt, also called Treasuries.
  • Urged the Financial Accounting Standards Board (FASB) to abandon “market to market” valuations for the banks, thereby allowing the banks to value the debts on their balance sheet at “make believe” prices.

Combined, these three policies, particularly #s 1 and 2, create a bubble in US Treasuries, forcing yields to extraordinary lows.

Treasuries are the bedrock of the global financial system. Their yields represent the “risk free” rate of return: the rate against which all risk assets (stocks, commodities, real estate, etc.) are priced.

So, when the Fed created a bubble in Treasuries, it created a bubble in EVERYTHING: the entire financial system became mispriced based on a false risk profile.

Every asset class in the world trades based on the pricing of bonds. So the fact that bonds are in a bubble (arguably the biggest bubble in financial history), means that EVERY asset class is in a bubble.

I am focusing on the Fed here, but the same policies played out in every major financial system.

The European Central Bank (ECB) employed the same policies in Europe, the Bank of England (BoE) employed the same policies in the UK, and the Bank of Japan, (BoJ) which had already been doing both ZIRP and QE since 2000, took these polices to even greater extremes.

The end result is central bankers created the BIGGEST, most egregious bubble in financial history. A $250 TRILLION debt bomb… with another $500+ trillion in derivatives trading based on its yields.

To put this into perspective, the Tech Bubble was about $15 trillion in size. The Housing Bubble, which triggered the 2008 Crisis, was about $30 trillion in size.

The bond bubble is over $250 TRILLION in size. Some $50 trillion of this is in sovereign debt, with the rest coming from corporate debt, mortgages, auto loans, credit cards and the like.

This mountain of debt is categorized based its riskiness. Not all debt is equal because of the fact that different borrowers have different levels of risk of default. For instance, an oil shale company that needs oil to trade at $60 per barrel is at much greater risk of default than a sovereign nation like the U.S..

For simplicities sake we’re going to ignore auto-loans, student debt, and credit card debt to focus on the truly systemically important debt.

Corporate, Municipal, and Sovereign/ National.

In the U.S., things rapidly moving up the bond food chain.

The Junk Bond corporate bond market bubble has burst.

A close up of a map

Description automatically generated

The bubble in less risky corporate debt, called investment grade is about to do the same.

A close up of a map

Description automatically generated

Further up the food chain, the bubble in high yield municipal bonds (bonds issued by cities, states and the like) has also burst.

A close up of text on a white background

Description automatically generated

The BAD news is that the bubble in investment grade municipal bonds has ALSO burst.

A close up of a map

Description automatically generated

This leaves sovereign bonds, or Treasuries. Right now, the bubble in U.S. treasuries remains intact with bond yields within a clearly defined bear market (bond yields fall when bond prices rise, so the bubble is stable).

A close up of a map

Description automatically generated

This is NOT the case in Europe.

Germany is the largest most dynamic economy in Europe. As such Germany is the ultimate backstop for the EU. And German sovereign bonds are beginning to breakdown.

A close up of a map

Description automatically generated

Despite a deflationary collapsing, bond yields on the 10-Year German Government bonds is RISING, meaning those bonds are falling in value.

This SHOULD not be happening. German bond yields should be falling based on the deflation in the system right now.

Indeed, just this week Germany experienced a failed bond auction… meaning not enough buyers showed up to buy its bonds.

That kind of thing can happen from time to time… but for it to happen during a flight to safety like the one happening right now is a REAL signal that the EU’s bond market is in serious trouble.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Europe is fast approaching A Systemic Event

Thus far in this crisis, the Fed has:

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched over $700 billion in Quantitative Easing (QE).

3)    Launched a $1.5 TRILLION repo program.

4)    Launched another $1 trillion repo program.

5)    Announced it will begin buying commercial paper (short-term corporate debt).

6)    Allowed primary dealers to start parking assets, including stocks, as collateral in exchange for short-term credit.

7)    Opened Euro-Dollar swaps (this implies systemically important banks in Europe are in danger of collapse).

Under any set of circumstances, the above set of policies would be considered the NUCLEAR option. The fact that the Fed has launched ALL of these in the span of three weeks is beyond incredible.

In the simplest of terms, the Fed has effectively used up ALL of its ammo in less than a single month. At this point, there truly is not much else the Fed can do.

And the markets continue to implode. As I write this, the futures markets are once again LIMIT down, meaning they had to be frozen after falling 5%.

Enter former Fed Chairs Ben Bernanke and Janet Yellen.

In an opinion editorial piece in the Financial Times this morning the two former Fed Chairs urged the Fed to begin buying corporate debt and stocks. 

Currently the Fed is forbidden from doing either as per the Federal Reserve Act. Put another way, congress would need to authorize the Fed to start buying these assets.

The two former Fed Chairs are providing the political cover to do this. I fully expect the Fed to begin outright buying stocks, corporate debt, and other assets within the next six weeks.

Put another way, the Fed is going to begin going what some call “Weimar-Lite” or effectively buying everything.

This is why bonds are dropping across the board despite the clear signs that the financial system remains under MAJOR duress… bonds realize that the fed and other Central banks are going to opt for INFLATION to stop the crisis (and I’m not talking about the plain vanilla 2% per year kind).

The time to start preparing for this is now. The crisis is not over… if anything it is just beginning.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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).

As I write this there are less than 50 copies left available to the public.

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Yes, the Fed IS Out of Ammo…For Now.

Thus far in this crisis, the Fed has:

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched over $700 billion in Quantitative Easing (QE).

3)    Launched a $1.5 TRILLION repo program.

4)    Launched another $1 trillion repo program.

5)    Announced it will begin buying commercial paper (short-term corporate debt).

6)    Allowed primary dealers to start parking assets, including stocks, as collateral in exchange for short-term credit.

7)    Opened Euro-Dollar swaps (this implies systemically important banks in Europe are in danger of collapse).

Under any set of circumstances, the above set of policies would be considered the NUCLEAR option. The fact that the Fed has launched ALL of these in the span of three weeks is beyond incredible.

In the simplest of terms, the Fed has effectively used up ALL of its ammo in less than a single month. At this point, there truly is not much else the Fed can do.

And the markets continue to implode. As I write this, the futures markets are once again LIMIT down, meaning they had to be frozen after falling 5%.

Enter former Fed Chairs Ben Bernanke and Janet Yellen.

In an opinion editorial piece in the Financial Times this morning the two former Fed Chairs urged the Fed to begin buying corporate debt and stocks. 

Currently the Fed is forbidden from doing either as per the Federal Reserve Act. Put another way, congress would need to authorize the Fed to start buying these assets.

The two former Fed Chairs are providing the political cover to do this. I fully expect the Fed to begin outright buying stocks, corporate debt, and other assets within the next six weeks.

Put another way, the Fed is going to begin going what some call “Weimar-Lite” or effectively buying everything.

This is why bonds are dropping across the board despite the clear signs that the financial system remains under MAJOR duress… bonds realize that the fed and other Central banks are going to opt for INFLATION to stop the crisis (and I’m not talking about the plain vanilla 2% per year kind).

The time to start preparing for this is now. The crisis is not over… if anything it is just beginning.


In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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).

As I write this there are less than 50 copies left available to the public.

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Bernanke Just Told the Fed to Go Monetize EVERYTHING (Weimar-Lite)

Someone or someones are in MAJOR trouble.

Back in September 2019, the Fed announced it would begin implementing a number of repurchase “repo” programs.

If you’re unfamiliar with repo programs, these are programs through which the Fed allows financial banks/ institutions to park assets at the Fed, in exchange for cash.

At the time the Fed announced this, it claimed that it was performing these programs to help with a capital crunch due to tax season. However, that excuse was soon proven to be total bunk as the repo programs were extended from September through October and finally through January.

At the same time, the repo programs grew in size from $75 billion for overnight repos and $30 billion for term repos, to $120 billion in overnight repos and $45 billion in term repos.

Why would the Fed be doing this? After all, the economy was growing at the time, and there were no indications or systemic risk in the U.S. financial system.

The Fed was doing this because a financial institution or institutions were in BAD SHAPE and desperate for capital. By bad shape I mean “Lehman Brothers” type failure.

We do not know who it is but considering the fact that the Fed announced an emergency round of $1.5 TRILLION in repos last week… and even that stopped the market from collapsing, suggest it’s a very LARGE institutions (think the size of Deutsche Bank or UBS).

With this in mind, it doesn’t matter what happens with coronavirus or with the economy. If a large systemically important financial institution or bank fails, we could get a Lehman-like liquidation in the markets.

If you think I’m being dramatic here, consider that the EIGHT largest U.S. banks just announced they are going to start accessing the Fed’s Discount Window: a means through which the Fed gives banks access to capital overnight.

The banks haven’t done this since 2008.

Again, a large financial institution or institutions are in MAJOR trouble here. The fact that even $1.5 TRILLION in repos didn’t fix this issue means it’s truly a systemic problem.


In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on If Everything is Fine… Why Are the 8 Largest US Banks Preparing to Access the Fed’s Discount Window?
Posted on by The Phoenix | Comments Off on CHART OF THE DAY: 3-17-20

Someone or someones are in MAJOR trouble.

Back in September 2019, the Fed announced it would begin implementing a number of repurchase “repo” programs.

If you’re unfamiliar with repo programs, these are programs through which the Fed allows financial banks/ institutions to park assets at the Fed, in exchange for cash.

At the time the Fed announced this, it claimed that it was performing these programs to help with a capital crunch due to tax season. However, that excuse was soon proven to be total bunk as the repo programs were extended from September through October and finally through January.

At the same time, the repo programs grew in size from $75 billion for overnight repos and $30 billion for term repos, to $120 billion in overnight repos and $45 billion in term repos.

Why would the Fed be doing this? After all, the economy was growing at the time, and there were no indications or systemic risk in the U.S. financial system.

The Fed was doing this because a financial institution or institutions were in BAD SHAPE and desperate for capital. By bad shape I mean “Lehman Brothers” type failure.

We do not know who it is but considering the fact that the Fed announced an emergency round of $1.5 TRILLION in repos last week… and even that stopped the market from collapsing, suggest it’s a very LARGE institutions (think the size of Deutsche Bank or UBS).

With this in mind, it doesn’t matter what happens with coronavirus or with the economy. If a large systemically important financial institution or bank fails, we could get a Lehman-like liquidation in the markets.

If you think I’m being dramatic here, consider that the EIGHT largest U.S. banks just announced they are going to start accessing the Fed’s Discount Window: a means through which the Fed gives banks access to capital overnight.

The banks haven’t done this since 2008.

Again, a large financial institution or institutions are in MAJOR trouble here. The fact that even $1.5 TRILLION in repos didn’t fix this issue means it’s truly a systemic problem.


In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on We Are Now Approaching the “Lehman” Event… Prepare NOW!

The Fed is now in very serious trouble. 

Over the weekend the Fed announced another emergency rate cut, this time of 1%. This brings rates back down to zero.

The Fed also announced a $700 billion QE program, including $200 billion of mortgage backed securities and $500 billion of Treasuries.

And the futures market collapsed… LIMIT DOWN. As I write this, the stock market will be opening down some 5%.

Put another way, the Fed has gone truly NUCLEAR with monetary policy… and the market is STILL imploding.

In the last two weeks, the Fed has:

1)    Cut rates from 1.25% to ZERO.

2)    Launched a $1.5 TRILLION repo program.

3)    Launched a $700 billion QE program.

And NONE of these items has stopped the market collapse.

So, what is going on?!?!

The Fed is facing the perfect storm of crises.

The Fed faces an:

1)    An economic recession possibly a depression triggered by a pandemic.

2)    A corporate debt crisis with some $4-$5 trillion in debt at risk.

Regarding #1, the coronavirus pandemic has resulted in the global economy stopping. The latest numbers out of China show DEPRESSION-like collapses in economic activity.

The U.S. is heading there now. Restaurant traffic is down some 30%+ in the last week (60% in some markets). Events are being canceled. And people are staying home rather than going out and spending money.

The Fed can do NOTHING to stop this. No amount of rate cuts of stimulus from the Fed will make people want to go out and spend money if the country is on lockdown/ facing a health crisis triggered by a pandemic.

This in turn is triggering #2: a corporate debt crisis with some $4-$5 trillion in debt at risk.

Since 2008, US corporations have issued a truly INSANE amount of debt, often times using this debt to buy back their own stock.

Consider that it took 50 years for the US corporate bond market to hit $4 trillion. It has more than DOUBLED that to $10 trillion since 2008 alone.

The economic impact of the coronavirus has brought this market under systemic duress. With corporate sales imploding, companies will suddenly have much less money to use to make debt payments.

As you can see in the chart below, the bull market in junk bonds is OVER. If we take out that lower red line, we’re entering a systemic crisis for corporate debt.

This is a huge deal. And frankly, the Fed can’t do anything about it.

The corporate debt market is a $10 trillion bubble, of which $1.5 trillion is junk (think subprime) and another $4 trillion is just one step above this (probably junk as well).

And unlike mortgages or Treasuries, the Fed CANNOT buy this stuff. Not unless congress changes the Federal Reserve act.

Why does this matter?

Because corporate debt leads stocks. The stock market bounced at 2,500. Credit tells us stocks will be heading to 2,300 if not lower.

In the simplest of terms, the next crisis is here. The coronavirus has burst the Everything Bubble. And we’re heading into another 2008 type meltdown, or possibly something worse. 


In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market StrategistParagraph

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on It’s Official: the Coronavirus Has Burst the Everything Bubble

The markets are bouncing limit up this morning on two things:

Bear markets always have face ripper rallies. Is this the start of one… or is this just another one-day blip similar to that which happened on Tuesday? I have no idea. And in fact no one does.

Investing is not about being psychic… it’s about playing the hand you are dealt.

The hand we have been dealt today is this:

  1. The markets have just suffered their worst one-day collapse since the 1987 Crash.
  2. The markets are down over 20% across the board with some indexes having wiped out ALL of their gains going back to the 2016 election.
  3. The markets are EXTREMELY oversold with investor sentiment the worst since the 2008 Crisis.
  4. We are heading into the weekend… or 48 hours during which the markets are closed and any number of developments can occur.

Unfortunately that is not the worst new either.

Do NOT let the market rally distract you from what happened yesterday.

Yesterday, the Federal Reserve, the single most importance central bank in the world, announced a $1.5 TRILLION repo operation as well as a new QE program… and stocks only rallied for FIVE minutes, before closing on the LOWS.

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Again, stocks had their worst day since the 1987 Crash on the day the Fed announced a $1.5 TRILLION intervention. THAT, is THE story of this week.

The implication?

Something truly HORRIFIC is happening behind the scenes. We’re talking about something far worse than Lehman Brothers. Some large, and I mean LARGE institution (think Deutsche Bank, UBS, or something of that size) is in MAJOR trouble.

What’s TRULY horrifying is that bonds actually COLLAPSED yesterday despite the Fed announcing this $1.5 trillion program. If bonds cannot find a floor when the Fed announces QE 5 as well as $1.5 trillion in repos, then we have a problem that is far, far greater than anything the world has ever seen.

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Let’s be clear here… what the Fed did was not a bazooka… it was a NUCLEAR option… and it didn’t stop the collapse.

The Fed now has few options left. Which means, if the market bounce doesn’t last, and stocks turn down again… the Fed is effectively POWERLESS to stop what’s coming.

So, what happens now?

The S&P 500 is down 27% since its peak in only 16 days.

The only two comparable situations in history that I know of are the 1987 Crash and the 1929 Crash, which saw stocks lose 34% in 11 days and 20 days, respectively.

In both instances, stocks bounced only two days or so before revisiting the lows or falling to new lows.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The Fed Went NUCLEAR and It Only Bought a FIVE MINUTE Bounce

The world is facing two crises. 

The first, coronavirus, is manufactured, the second, a credit implosion, is very real.

The coronavirus panic was 100% made up and manufactured by the media. Globally 100,000 people have been infected and a little over 3,000 have died. Swine Flu infected 60 MILLION and KILLED 60,000 people, in the U.S. alone.

No one shut down their economy over swine flu. No one stock piled toilet paper. No one talked about the end times. Those are facts.

However, now that the elites are shutting down things, the economy will take a real hit. If large group meetings are considered a danger, then factories, companies, schools, conferences and the like will be canceled. And that will hit the economy HARD.

Now let’s talk about the REAL crisis that is hitting the financial system.

As you are no doubt aware, there is too much debt in the financial system. Globally Debt to GDP is north of 200%. Leverage is higher today than it was in 2007. And the world is absolutely saturated in debt on a sovereign, state, municipal, corporate and personal level.

However, everything continued to run smoothly as long as nothing began to blow up in the debt markets/ credit markets. And despite a few hiccups here and there, the debt markets have been relatively quiet for the last few years.

Not anymore.

Someone or something is blowing up in a horrific way “behind the scenes.”

The Fed was FORCED to start providing over $100 BILLION in free money overnight back in September 2019. And even that massive amount is proving inadequate (last night the Fed was forced to pump $216 BILLION into the system).

You don’t get those kinds of demands for liquidity unless something is truly horrifically wrong. Think LEHMAN BROTHERS.

This is why the markets are failing to rally. It is why every major central bank is out talking about launching new aggressive monetary policies. And it is why the Fed is privately freaking out. 

Below is a chart showing the credit market (black line) relative to the stock market (red line). As you can see, the credit market is already telling us that stocks should be trading at 2,600 or even lower.

This is a real crisis. And from what I can see, the Fed can’t stop it.

What stopped the last crisis?

The Fed fought back by launching rate cuts and QE.

This crisis started when the Fed was already doing rate cuts and QE.

And those policies aren’t doing anything to stop the bloodbath.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform 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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Stocks Cling to Hope, But the Credit Markets Say We’re in a Bear Market…

The world is facing two crises. 

The first, coronavirus, is manufactured, the second, a credit implosion, is very real.

The coronavirus panic was 100% made up and manufactured by the media. Globally 100,000 people have been infected and a little over 3,000 have died. Swine Flu infected 60 MILLION and KILLED 60,000 people, in the U.S. alone.

No one shut down their economy over swine flu. No one stock piled toilet paper. No one talked about the end times. Those are facts.

However, now that the elites are shutting down things, the economy will take a real hit. If large group meetings are considered a danger, then factories, companies, schools, conferences and the like will be canceled. And that will hit the economy HARD.

Now let’s talk about the REAL crisis that is hitting the financial system.

As you are no doubt aware, there is too much debt in the financial system. Globally Debt to GDP is north of 200%. Leverage is higher today than it was in 2007. And the world is absolutely saturated in debt on a sovereign, state, municipal, corporate and personal level.

However, everything continued to run smoothly as long as nothing began to blow up in the debt markets/ credit markets. And despite a few hiccups here and there, the debt markets have been relatively quiet for the last few years.

Not anymore.

Someone or something is blowing up in a horrific way “behind the scenes.”

The Fed was FORCED to start providing over $100 BILLION in free money overnight back in September 2019. And even that massive amount is proving inadequate (last night the Fed was forced to pump $216 BILLION into the system).

You don’t get those kinds of demands for liquidity unless something is truly horrifically wrong. Think LEHMAN BROTHERS.

This is why the markets are failing to rally. It is why every major central bank is out talking about launching new aggressive monetary policies. And it is why the Fed is privately freaking out. 

Below is a chart showing the credit market (black line) relative to the stock market (red line). As you can see, the credit market is already telling us that stocks should be trading at 2,600 or even lower.

This is a real crisis. And from what I can see, the Fed can’t stop it.

What stopped the last crisis?

The Fed fought back by launching rate cuts and QE.

This crisis started when the Fed was already doing rate cuts and QE.

And those policies aren’t doing anything to stop the bloodbath.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform 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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Ignore Coronavirus, Lehman Brothers 2.0 is Unfolding Before Our Very Eyes

The markets are bouncing hard in the overnight session.

The Trump administration announced last night that they are planning a number of fiscal measures to prop up the economy. Those include a payroll tax, loans to companies that are being hurt by the economic fallout from coronavirus, and other items.

The actual plan will be unveiled today.

After it is unveiled, the President will have to figure out how to get it through Congress… which is a whole issue.

On top of this, the President has invited all of the Wall Street CEOs to the White House to discuss the economy and financial markets. This is a very similar move to the phone call Treasury Secretary Steven Mnuchin had with Wall Street during the December 2018 meltdown.

Put simply, the Trump administration is about to throw the “kitchen sink” at the coronavirus situation. Whether this will alleviate the pressure in the credit market remains to be seen.

The U.S. is not alone in this. The Bank of England is preparing to take “joint action” with the UK Treasury on Wednesday. And the ECB meets Wednesday and Thursday.

Put simply, we are about to see another round of coordinated global interventions. The big difference this time is that policy makers are introducing fiscal measures, rather than monetary ones. 

What this means is that rather than having central banks funnel money into the markets, governments are now trying to inject money directly into the economy.

This is the beginning of helicopter money.

And that is a very different thing from mere rate cuts and QE from central banks.

The markets are going to bounce based on all of this. Whether this is a major bounce that kicks of a real V-shaped recovery, or just a dead cat bounce remains to be seen.

The credit market is suggesting a crisis is brewing. The question now is whether or not policy makers can avert it. But right now, credit suggests the S&P 500 could drop to 2,450 or so.


In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform 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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Credit Says a Crisis is Coming… Can Central Banks Stop It?

The markets are bouncing hard in the overnight session.

The Trump administration announced last night that they are planning a number of fiscal measures to prop up the economy. Those include a payroll tax, loans to companies that are being hurt by the economic fallout from coronavirus, and other items.

The actual plan will be unveiled today.

After it is unveiled, the President will have to figure out how to get it through Congress… which is a whole issue.

On top of this, the President has invited all of the Wall Street CEOs to the White House to discuss the economy and financial markets. This is a very similar move to the phone call Treasury Secretary Steven Mnuchin had with Wall Street during the December 2018 meltdown.

Put simply, the Trump administration is about to throw the “kitchen sink” at the coronavirus situation. Whether this will alleviate the pressure in the credit market remains to be seen.

The U.S. is not alone in this. The Bank of England is preparing to take “joint action” with the UK Treasury on Wednesday. And the ECB meets Wednesday and Thursday.

Put simply, we are about to see another round of coordinated global interventions. The big difference this time is that policy makers are introducing fiscal measures, rather than monetary ones. 

What this means is that rather than having central banks funnel money into the markets, governments are now trying to inject money directly into the economy.

This is the beginning of helicopter money.

And that is a very different thing from mere rate cuts and QE from central banks.

The markets are going to bounce based on all of this. Whether this is a major bounce that kicks of a real V-shaped recovery, or just a dead cat bounce remains to be seen.

The credit market is suggesting a crisis is brewing. The question now is whether or not policy makers can avert it. But right now, credit suggests the S&P 500 could drop to 2,450 or so.


In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform 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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on The U.S. Will Soon Announce Helicopter Money…But Will it Be Enough?

Stocks are going to revisit the lows.

This is completely normal behavior for markets: a consolidation period after a major downdraft. We could even take out the lows and still be bottoming. But that remains to be seen.

The real issue is NOT the coronavirus itself, but how much the PANIC around coronavirus will impact the economy. The media has incited a full-blown panic to the point that there are toilet paper and sanitizer shortages in major cities like New York.

This is for a disease that has infected 100,000 people globally, killing a little over 3,000. By way of contrast, the swine flu infected 61 million and killed 12,000… in the US alone.

Again, coronavirus has infected 100,000 globally and killed 3,000 globally, swine flu infected 61 MILLION in the US and killed 12,000 in the US alone (over 500,000 globally).

And yet, there were not toilet paper shortages or people freaking out like they are today. This is a media created panic. And it could have a very real impact on the economy. And that is why stocks are freaking out.

The other reason stocks are freaking out is because this is a situation the Fed cannot fix with monetary easing. Cutting rates, expanding QE, and the like won’t do anything to stop Americans from freaking out about their health. If the US panics to the point that people stop going out and spending money, the economy will grind to a halt no matter what the Fed does.

It’s early to predict this. But it is a possibility. And if it happens, we enter a recession and stocks CRASH.

This would render the upside breakout of the multi-year megaphone pattern a false breakout. That would mean stocks falling to 2,100 on the S&P 500.

In light of this, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments willperform 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:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Stocks Rolled Over Again… Is a Crash About to Hit?

Yesterday was a great day for stocks, but we are not out of the woods yet.

It looks like we’re in an uptrend here. And this morning the market is red as it tests the lower trendline. If this holds, we should start the next leg up to 3,250 today or tomorrow. If it doesn’t hold, then selling will hit in a big way and we can expect a drop back down to 2,900.

Healthcare (IYH) stocks suggests we should continue higher.

IYH is leading the overall market higher, which suggests much of the last week’s collapse was due to fears of Bernie Sanders and his insane policies (Medicare for all for $50 TRILLION) as opposed to coronavirus.

Which means… a MONSTER rally in stocks, with a V-shaped recovery bringing the markets to new all time highs.

Indeed, the long-term chart for the S&P 500 tells us 3,600 or higher is coming this year alone. 

My clients are already making a KILLING from the market rebound. And by the time stocks hit 3,600 we’ll have made absolute fortunes.

After all, what are the odds President Trump is going to let his beloved stock market go down the toilet during an election year… especially when he is going to win in a LANDSLIDE.

I DO NOT care about politics. You can hate President Trump or you can love him. That’s 100% up to you.

But the reality is that under the Trump administration the stock market is giving us a once in a lifetime opportunity to GET RICH from our investments.

My clients are already doing this with our new special report titled…

The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, I detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

In it, I detail five unique investments that I expect will produce the most extraordinary gains during President Trump’s second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Healthcare Stocks Suggest This Rally Has Legs

Yesterday was a great day for stocks, but we are not out of the woods yet.

It looks like we’re in an uptrend here. And this morning the market is red as it tests the lower trendline. If this holds, we should start the next leg up to 3,250 today or tomorrow. If it doesn’t hold, then selling will hit in a big way and we can expect a drop back down to 2,900.

Healthcare (IYH) stocks suggests we should continue higher.

IYH is leading the overall market higher, which suggests much of the last week’s collapse was due to fears of Bernie Sanders and his insane policies (Medicare for all for $50 TRILLION) as opposed to coronavirus.

Which means… a MONSTER rally in stocks, with a V-shaped recovery bringing the markets to new all time highs.

Indeed, the long-term chart for the S&P 500 tells us 3,600 or higher is coming this year alone. 

My clients are already making a KILLING from the market rebound. And by the time stocks hit 3,600 we’ll have made absolute fortunes.

After all, what are the odds President Trump is going to let his beloved stock market go down the toilet during an election year… especially when he is going to win in a LANDSLIDE.

I DO NOT care about politics. You can hate President Trump or you can love him. That’s 100% up to you.

But the reality is that under the Trump administration the stock market is giving us a once in a lifetime opportunity to GET RICH from our investments.

My clients are already doing this with our new special report titled…

The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, I detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

In it, I detail five unique investments that I expect will produce the most extraordinary gains during President Trump’s second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Have Stocks Completely Bottomed? Find Out Here!

So, what was it… coronavirus or Bernie-virus? 

Most market analysts have blamed last week’s meltdown on fears of a coronavirus pandemic collapsing the global economy. For certain those fears had an impact on the markets… but so did the political ascent of Bernie Sanders, the socialist.

Put another way, just how much of the market sell-off was the market fearing the economic nightmare that would be a potential Bernie Sanders Presidency?

The market literally peaked the night of the Dem debate in Las Vegas after Sanders managed to do extremely well in both Iowa and New Hampshire. It then began to collapse, entering a total freefall when Sanders won Nevada. And the first real bounce didn’t hit until Joe Biden began to rebound, taking South Carolina.

And to top it off, the market is rallying MORE today after Joe Biden won super Tuesday, than it did after the Fed performed an emergency 0.5% rate cut.

Again, Bernie Sanders LOSING… did more for stocks than the Fed cutting rates by 0.5%.

So… was it Bernie-virus… the fear of a deranged socialist possibly winning the Presidency… that triggered the market meltdown? The correlation between the market sell-off and Sanders’ success as a candidate is beyond coincidence.

We will soon find out. But by the look of things, the Bernie-virus has been contained and there will soon be a cure. 

Which means… a MONSTER rally in stocks, with a V-shaped recovery bringing the markets to new all time highs.

Indeed, the long-term chart for the S&P 500 tells us 3,600 or higher is coming this year alone. 

My clients are already making a KILLING from the market rebound. And by the time stocks hit 3,600 we’ll have made absolute fortunes.

After all, what are the odds President Trump is going to let his beloved stock market go down the toilet during an election year… especially when he is going to win in a LANDSLIDE.

I DO NOT care about politics. You can hate President Trump or you can love him. That’s 100% up to you.

But the reality is that under the Trump administration the stock market is giving us a once in a lifetime opportunity to GET RICH from our investments.

My clients are already doing this with our new special report titled…

The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, I detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

In it, I detail five unique investments that I expect will produce the most extraordinary gains during President Trump’s second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted on by The Phoenix | Comments Off on Bernie Sanders LOSING Was Better For Stocks That a 0.5% Rate Cut