Financially

Remember This Friday The 13th – Americans Are More Optimistic About The Stock Market Than They Have Ever Been Before

October 13, 2017October 13, 2017 by Michael

Happy days are here again for the U.S. economy – at least temporarily. On Friday, U.S. stocks hit another brand new record high. It seems like we are saying that almost every day lately, and most investors are absolutely thrilled by this seemingly endless surge. Global stocks are surging too – today world stocks hit a new record high for the 4th consecutive day in a row. But of course it isn’t just stock prices that are rising. As the week ended, pretty much everything was up, and we also got some good news about consumer sentiment. According to the new University of Michigan survey that was just released, U.S. consumers are the most optimistic about the economy that they have been since 2004…

The consumer sentiment index, a survey of consumers by The University of Michigan, rose to 101.1 in October, far ahead of the 95 economists polled by Reuters anticipated.

“Consumer sentiment surged in early October, reaching its highest level since the start of 2004,” Richard Curtin, chief economist for the Surveys of Consumers, said in a statement.

And according to that same survey, we have never been more confident that the stock market will continue to go up than we are right now…

Americans have never been more confident that that stock market will rally further in the next 12 months…

Of course it kind of makes sense why U.S. consumers would be feeling so good about the markets. After all, stocks have only seemed to go up and up and up since the end of the last financial crisis.

But as I have written about so frequently in recent months, our financial markets are even more primed for a crash than they were in 2008, and we have received warning after warning that stock valuations are ridiculously inflated and must come crashing down at some point.

Plus, the “real economy” continues to send us some very troubling signals. The U.S. economy lost jobs last month for the first time in seven years, and we just learned that General Motors is laying off more workers…

Starting in mid-November and going through the rest of the year, General Motors will close its Detroit-Hamtramck assembly plant – its only remaining factory in its hometown – and lay off about 1,500 workers, “people familiar with the plan” told the Wall Street Journal. When the plant does resume production, output will be cut by 20%, and 200 people will be out of a job.

Back in 1999, the plant produced over 200,000 Cadillacs and Buicks a year. This year, it might barely produce 80,000 vehicles.

The truth is that we are in the terminal phase of the greatest debt bubble in human history, and all over the planet prominent names in the financial world are warning about what is just around the corner. For example, German finance minister Wolfgang Schäuble is deeply concerned about what he is seeing…

Outgoing German finance minister Wolfgang Schäuble has warned that spiraling levels of global debt and liquidity present a major risk to the world economy.

In an interview with the Financial Times, Schäuble said there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets.

He also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans.

And James Rickards is completely convinced “that a financial crisis is certainly coming”…

The bottom line is that a financial crisis is certainly coming. In my latest book, The Road to Ruin, I use 2018 as a target date primarily because the two prior systemic crises, 1998 and 2008, were 10 years apart. I extended the timeline 10 years into the future from the 2008 crisis to maintain the 10-year tempo, and this is how I arrived at 2018.

Yet I make the point in the book that the exact date is unimportant. What is most important is that the crisis is coming and the time to prepare is now. It could happen in 2018, 2019, or it could happen tomorrow. The conditions for collapse are all in place.

It’s simply a matter of the right catalyst and array of factors in the critical state. Likely triggers could include a major bank failure, a failure to deliver physical gold, a war, a natural disaster, a cyber–financial attack, and many other events.

If you look at how stock prices have behaved so far this year, it looks suspiciously just like the bubble that formed in 1987 just before the market crashed.

The conditions for an absolutely historic stock market crash already exist, and they have existed for quite some time. None of our long-term problems have been solved, and with each passing day this colossal financial bubble just keeps getting bigger and bigger and bigger.

I definitely concur with James Rickards. A major financial crisis “is certainly coming”, and because of all the irrational optimism that we are witnessing at the moment most Americans will be completely and utterly blindsided by what is ahead.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us

September 18, 2017September 18, 2017 by Michael

Will there be a major stock market crash before the end of 2017? To many of us, it seems like we have been waiting for this ridiculous stock market bubble to burst for a very long time. The experts have been warning us over and over again that stocks cannot keep going up like this indefinitely, and yet this market has seemed absolutely determined to defy the laws of economics. But most people don’t remember that we went through a similar thing before the financial crisis of 2008 as well. I recently spoke to an investor that shorted the market three years ahead of that crash. In the end his long-term analysis was right on the money, but his timing was just a bit off, and the same thing will be true with many of the experts this time around.

On Monday, I was quite stunned to learn what Brad McMillan had just said about the market. He is considered to be one of the brightest minds in the financial world, and he told CNBC that stocks would need to fall “somewhere between 30 and 40 percent just to get to fair value”…

Brad McMillan — who counsels independent financial advisors representing $114 billion in assets under management — told CNBC on Monday that the stock market is way overvalued.

“The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,” said McMillan, chief investment officer at Massachusetts-based Commonwealth Financial Network.

McMillan’s analysis is very similar to mine. For a long time I have been warning that valuations would need to decline by at least 40 or 50 percent just to get back to the long-term averages.

And stock valuations always return to the long-term averages eventually. Only this time the bubble has been artificially inflated so greatly that a return to the long-term averages will be absolutely catastrophic for our system.

Meanwhile, trouble signs for the real economy continue to erupt. As noted in the headline, it appears that Toys R Us is on the brink of bankruptcy…

Toys R Us has hired restructuring lawyers at Kirkland & Ellis to help address looming $400 million in debt due in 2018, CNBC had previously reported, noting that bankruptcy was one potential outcome.

Kirkland declined to comment.

Earlier Monday, Reorg Research, a news service focused on bankruptcy and distressed debt, reported Toys R Us could file for bankruptcy as soon as Monday.

This is yet another sign that 2017 is going to be the worst year for retail store closings in U.S. history. I don’t know how anyone can look at what is happening to the retail industry (or the auto industry for that matter) and argue that the U.S. economy is in good shape.

But most Americans seem to base their opinions on how the economy is doing by how well the stock market is performing, and thanks to relentless central bank intervention, stock prices have just kept going up and up and up.

In so many ways, what we are watching today is a replay of the dotcom bubble of the late 1990s, and this is something that McMillan also commented on during his discussion with CNBC…

Part of McMillan’s thesis is rooted in his belief that the lofty levels of the so-called FANG stocks — Facebook, Amazon, Netflix and Google-parent Alphabet — seem reminiscent of the dot-com bubble in the late 1990s.

“I’ve been saying for about the past year, this year looks a lot like 1999 to me,” McMillan said on “Squawk Box.” “If you look at the underlying economics [and] if look at the stock market, the similarities are remarkable.”

I am amazed that so many big names continue to issue extremely ominous warnings about the financial markets, and yet most Americans seem completely unconcerned.

It is almost as if 2008 never happened. None of our long-term problems were fixed after that crisis, and the current bubble that we are facing is far larger than the bubble that burst back then.

I don’t know why more people can’t see these things. It has gotten to a point where “even Goldman Sachs is getting worried”…

The stock market bubble is now so massive that even Goldman Sachs is getting worried.

Let’s be clear here: Wall Street does best and makes the most money when stocks are roaring higher. So in order for a major Wall Street firm like Goldman to start openly worrying about whether or not the markets are going to crash, there has to be truly MASSIVE trouble brewing.

On that note, Goldman’s Bear Market indicator just hit levels that triggered JUST BEFORE THE LAST TWO MARKET CRASHES.

When things fall apart this time, it is going to be even worse than what we went through in 2008. In the aftermath, we are going to need people that understand that we need to fundamentally redesign how our system works, and that is something that I hope to help with. We cannot base our financial system on a pyramid of debt, and we cannot allow Wall Street to operate like a giant casino. Our entire economy has essentially become a colossal Ponzi scheme, and it is inevitable that it is going to come horribly crashing down at some point.

But for now, the blind continue to lead the blind, and most Americans are not going to wake up until we have gone over the edge.

The Dow Closes At A Record High For The 9th Straight Time But Experts Warn That A Stock Market Crash Could Be Imminent

August 7, 2017August 7, 2017 by Michael

The bigger they come, the harder they fall. On Monday, the Dow Jones Industrial Average closed at a record high for the ninth straight session. It has been a remarkable run, but many experts are pointing out that big trouble is brewing under the surface. As you will see below, 79 components of the S&P 500 have already dropped more than 20 percent below their 52-week highs, and it is mostly just a handful of high flying tech stocks that are still propping up the market at this point. Over the past several weeks, I have been documenting so many of the prominent voices that are loudly warning about an imminent stock market crash, and in this article you will hear some more of these warnings. There is no way that stock prices can keep going up like this, and when the inevitable correction does arrive it is going to be exceedingly painful for millions of investors.

When the market is about to turn in a major way, one of the key things to watch is market breadth, and according to Brad Lamensdorf market breadth has now turned “exceedingly negative”…

Market breadth, a measure of how many stocks are rising versus the number that are dropping, has turned “exceedingly negative,” according to Brad Lamensdorf, a portfolio manager at Ranger Alternative Management. Lamensdorf writes the Lamensdorf Market Timing Report newsletter and runs the AdvisorShares Ranger Equity Bear ETF HDGE, -0.70% an exchange-traded fund that “shorts” stocks, or bets that they will fall.

“As the indexes continue to produce a series of higher highs, subsurface conditions are painting an entirely different picture,” Lamensdorf wrote in the latest edition of the newsletter.

When Lamensdorf uses the phrase “exceedingly negative”, he is not exaggerating at all. As I mentioned above, 79 components of the S&P 500 are already in a bear market…

According to an analysis of FactSet data, 79 components of the S&P 500 are trading at least 20% below their 52-week high; a bear market is typically defined as a 20% drop from a peak.

Another key measure that I like to keep my eye on is Robert Shiller’s cyclically adjusted price-to-earnings ratio. At this point, it is roughly at the same level as it was just before the stock market crash of 1929, and the only time it has been higher was during the peak of the dotcom bubble.

This is why so many investors are making extremely large bets that a major correction is imminent. History tells us that stocks are likely to only go down from here. And when stocks do start falling, the price action could become quite violent. In fact, Barry James is comparing this current market to the Yellowstone supervolcano…

Warning: A correction in the market is “inevitable” and there are three key factors that could spark chaos on Wall Street, according to James Advantage Fund president Barry James.

The investor likened the market to Yellowstone National Park’s famous supervolcano, which many believe is close to eruption.

Of course not everyone agrees with James. Michael Wilson of Morgan Stanley insists that everything is just fine and that “there continues to be a level of skepticism that seems out of whack with what is actually happening”.

In the end, we will see how the coming months play out.

Over the past several years, there have been two primary trends that have been relentlessly driving up stock prices. One of these trends has been an unprecedented level of stock buybacks. And so far this year, hundreds of billions of dollars worth of stock buybacks have already been announced…

Through May, some $390 billion in buybacks have been announced this year, $13 billion more than at this time in 2016, according to figures compiled by Jeffrey Yale Rubin at Birinyi Associates, a stock market research firm.

June 28 was the biggest single buyback announcement day in history. That was when 26 banks disclosed buybacks worth $92.8 billion, largely a response to having just passed the stress tests administered by the Federal Reserve Board. That figure blew past the previous record of $56.4 billion announced on July 20, 2006.

Secondly, central banks have been pumping trillions upon trillions of dollars into the global financial system, and this has perhaps been the biggest reason for the surge in stock prices. But now central banks are starting to pull back, and that could mean big trouble very soon. The following comes from Matt King…

With asset prices displaying a high degree of correlation with central bank liquidity additions in recent years, that feedback loop makes the economy, upon which both corporate profitability and bank net interest margins depend, more reliant on central banks holding markets together than almost ever before. That delicate balance may well be sustained for the time being. But with central banks beginning to move, however gingerly, towards an exit, is it really worth chasing the last few bp of spread from here?

Throughout our history we have seen financial bubbles come and go, but we never seen to learn from our mistakes. Right now, Warren Buffett is sitting on nearly 100 billion dollars in cash in anticipation of being able to buy up financial assets for a song after a crash happens, but meanwhile multitudes of ordinary Americans continue to pour vast quantities of money into stocks even at such absurd valuations.

Despite all of the warnings, many will be caught unprepared when the music stops playing. Just like all of the other financial manias in our history, this one will come to a bitter end too. The following comes from the New York Times…

In the late 1960s the mania was for the “nifty 50” American companies like Disney and McDonald’s, which had been the “go-go” stocks of that decade. In the late 1970s it was for natural resources, from gold to oil. In the late 1980s it was stocks in Japan, and in the late 1990s it was the dot-com boom. Last decade, investors flocked to mortgage-backed securities and big emerging markets from Brazil to Russia. In every case, many partygoers were still in the market when the crash came.

In life, timing is everything, and those that got out of the market in time are going to end up being very happy that they did so.

But those that stay in too long are going to see their “paper wealth” disappear in a blinding flash, and there won’t be any way to get it back once it is gone.

Remember This Milestone: The Dow Jones Industrial Average Hits 22,000 For The First Time In U.S. History

August 2, 2017August 2, 2017 by Michael

The Dow hit the 22,000 mark for the first time ever on Wednesday, and investors all over the world greatly celebrated. And without a doubt this is an exceedingly important moment, because I think that this is a milestone that we will be remembering for a very long time. So far this year the Dow is up over 11 percent, and it has now tripled in value since hitting a low in March 2009. It has been quite a ride, and if you would have told me a couple of years ago that the Dow would be hitting 22,000 in August 2017 I probably would have laughed at you. The central bankers have been able to keep this ridiculous stock market bubble going for longer than most experts dreamed possible, and for that they should be congratulated. But of course the long-term outlook for our financial markets has not changed one bit.

Every other stock market bubble of this magnitude in our history has ended with a crash, and this current bubble is going to suffer the same fate.

But many in the mainstream media are still encouraging people to jump into the market at this late hour. For example, the following comes from a USA Today article that was published on Wednesday…

“It’s still not too late to get in,” says Jeff Kleintop, chief global investment strategist at Charles Schwab, based in San Francisco. “The gains are firmly rooted in business fundamentals, not false hopes.”

I honestly don’t know how anyone could say such a thing with a straight face. We have essentially been in a “no growth economy” for the past decade, and signs of a new economic slowdown are all around us.

But even though price/earnings ratios and price/sales ratios are at some of the highest levels in history, some analysts insist that the stock market still has more room to go up…

On the flip side, investors with time to ride out any short-term market storm should not rule out getting in the market now. Economies around the globe are improving and are boosting the profitability of corporations in the U.S. and abroad, says Chris Zaccarelli, chief investment officer at Cornerstone Financial Partners in Charlotte, N.C.

Zaccarelli won’t even rule out Dow 25,000 by the end of 2018.

Personally, I believe that it is far more likely that we would see Dow 15,000 by the end of 2018, but over the past couple of years the bulls have been right over and over again.

But the only reason why the bulls have been right is because of unprecedented intervention by global central banks.

Today, the Swiss National Bank owns more than a billion dollars worth of stock in each of the following companies: Apple, Alphabet, Microsoft, Amazon, Exxon Mobil, Johnson & Johnson and Facebook.

So where does a central bank like the Swiss National Bank get the money to purchase all of these equities?

It’s easy – they just print the money out of thin air. As Robert Wenzel has noted, they simply “print the francs, exchange them for dollars and make the purchases”.

If I could create as much money as I wanted out of thin air and use it to buy stocks I could relentlessly drive up stock prices too.

Our financial markets have become a giant charade, and central bank intervention is the biggest reason why FAANG stocks have vastly outperformed the rest of the market. The following comes from David Stockman…

Needless to say, the drastic market narrowing of the last 30 months has been accompanied by soaring price/earnings (PE) multiples among the handful of big winners. In the case of the so-called FAANGs + M (Facebook, Apple, Amazon, Netflix, Google and Microsoft), the group’s weighted average PE multiple has increased by some 50%.

The degree to which the casino’s speculative mania has been concentrated in the FAANGs + M can also be seen by contrasting them with the other 494 stocks in the S&P 500. The market cap of the index as a whole rose from $17.7 trillion in January 2015 to some $21.2 trillion at present, meaning that the FAANGs + M account for about 40% of the entire gain.

Stated differently, the market cap of the other 494 stocks rose from $16.0 trillion to $18.1 trillion during that 30-month period. That is, 13% versus the 82% gain of the six super-momentum stocks.

If global central banks continue to buy millions of shares with money created out of thin air, they may be able to keep this absurd bubble going for a while longer.

But if the Fed and other central banks start pulling back, we could see a market tantrum of epic proportions. In fact, almost every single time throughout history when the Federal Reserve has attempted a balance sheet reduction it has resulted in a recession…

The Fed has embarked on six such reduction efforts in the past — in 1921-1922, 1928-1930, 1937, 1941, 1948-1950 and 2000.

Of those episodes, five ended in recession, according to research from Michael Darda, chief economist and market strategist at MKM Partners. The balance sheet trend mirrors what has happened much of the time when the Fed has tried to raise rates over a prolonged period of time, with 10 of the last 13 tightening cycles ending in recession.

“Moreover, outside of the 1920s and 1930s, there is no precedent for double-digit annual declines in the balance sheet/base that will likely begin to occur late next year,” Darda said in a note.

President Trump is going to get a lot of credit if the stock market keeps going up and he is going to get a lot of blame if it starts going down.

But the truth is that he actually has very little to do with what is really going on.

This stock market bubble was created by the central banks, and they also have the power to kill it if they desire to do so.

And once this bubble bursts, we may be looking at a crisis that makes 2008 look like a Sunday picnic.

Goldman Sachs and others are already warning that this stock market rally is on borrowed time. Let’s hope that it can continue at least for a little while longer, but in the end there is no possible way that this story is going to end well.

Goldman Sachs Says That There Is A 99 Percent Chance That Stock Prices Will Not Keep Going Up Like This

July 31, 2017July 31, 2017 by Michael

Analysts at Goldman Sachs are saying that it is next to impossible for stock prices to keep going up like they have been recently. Ever since Donald Trump’s surprise election victory in November, stocks have been on a tremendous run, but this surge has not been matched by a turnaround in the real economy. We have essentially had a “no growth” economy for most of the past decade, and ominous signs pointing to big trouble ahead are all around us. The only reason why stocks have been able to perform so well is due to unprecedented intervention by global central banks, but they are not going to be able to keep inflating this bubble forever. At some point this absolutely enormous bubble will burst and investors will lose trillions of dollars.

The only other times we have seen stock valuations at these levels were just before the stock market crash of 1929 and just before the dotcom bubble burst in 2000. For those that think that they can jump into the markets now and make a lot of money from rapidly rising stock prices, I think that it would be wise to consider what analysts at Goldman Sachs are telling us. The following is from a CNBC article that was published on Monday…

Investors may be in for disappointing market returns in the decade to come with valuations at levels this high, if history is any indication.

Analysts at Goldman Sachs pointed out that annualized returns on the S&P 500 10 years out were in the single digits or negative 99 percent of the time when starting with valuations at current levels.

Do you really want to try to fight those odds?

Unfortunately, it appears that is precisely what a lot of investors are planning to do. In fact, Schwab says that they are opening new accounts “at levels we have not seen since the Internet boom of the late 1990s”…

New accounts are at levels we have not seen since the Internet boom of the late 1990s, up 34% over the first half of last year. But maybe more important for the long-term growth of the organization is not so much new accounts, but new-to-firm households, and our new-to-firm retail households were up 50% over that same period from 2016.

And a different survey found that Millennial investors in particular are eager to pour money into the stock market…

Furthermore, according to a June survey from Legg Mason, nearly 80% of millennial investors plan to take on more risk this year, with 66% of them expressing an interest in equities. About 45% plan to take on “much more risk” in their portfolios.

One of the fundamental tenets of investing is to buy low and sell high. Those that are getting in at the peak of the market are going to get absolutely slaughtered. Trillions of dollars of paper wealth will be completely wiped out by the coming crash, and I wish that I could get more people to understand what is about to happen.

I recently wrote about how some really big investors are betting millions upon millions of dollars that a major stock market crash is going to happen in the very near future. The financial markets are far more primed for a crash than they were in 2008, and there are certainly a lot of potential “black swan events” that could push us over the edge. In his most recent article, Simon Black listed some of the things that he is currently watching…

– North Korea is threatening to nuke the US
– Donald Trump is firing his entire cabinet
– The Federal Reserve has dropped interest rates to record lows and drowned the world in trillions of dollars of cash
– Debt levels are at record highs
– Entire banking systems, especially in Europe, are in need of massive bailouts
– The US government will run out of money in less than 90-days and hit the debt ceiling once again

You only make money in the stock market if you get out in time. And since just before the crisis of 2008 I have never seen so many prominent names in the financial community warn about a coming stock market crash as I have over the last 90 days. For example, legendary investor Jim Rogers is warning that there will almost certainly be a crash “this year or the next”, and that it will be “the worst in your lifetime and my lifetime”…

The best-selling author expects the next financial crisis to be the “worst” he has ever seen.

“We’ve had economic problems in the U.S. or in North America every four to eight years since the beginning of the Republic so to say that we’re going to have a problem is not unusual,” he told Kitco News from the Freedom Fest conference in Las Vegas.

“I would expect it to start this year or the next…and it’s going to be the worst in your lifetime and my lifetime.”

What goes up must come down, and markets tend to go down a whole lot faster than they go up.

And in the environment that we are in today, caution is a very good thing. I really like how billionaire Howard Marks put this the other day…

I think it’s better to turn cautious too soon (and thus perhaps underperform for a while) rather than too late, after the downslide has begun, making it hard to trim risk, achieve exits and cut losses.

Perhaps this will be the first giant financial bubble in our history to end smoothly, but I wouldn’t count on it.

In the end, I expect this one to end just like all of the others. And I anticipate that the coming crisis will ultimately be worse than anything we have ever faced before because this current bubble has been artificially inflated for so long.

Hopefully stock prices will go up again tomorrow, but it would be exceedingly foolish to ignore all of the warnings. Goldman Sachs says that there is a 99 percent chance that stocks cannot continue surging like this, and in this case I believe that Goldman Sachs is entirely correct.

A Mystery Investor Has Made A 262 Million Dollar Bet That The Stock Market Will Crash By October

July 23, 2017July 23, 2017 by Michael

One mystery trader has made an extremely large bet that the stock market is going to crash by October, and if he is right he could potentially make up to 262 million dollars on the deal. Fortunes were made and lost during the great financial crisis of 2008, and the same thing will happen again the next time we see a major stock market crash. But will that stock market crash take place before 2017 is over? Without a doubt, we are in the midst of one of the largest stock market bubbles in U.S. history, and many prominent investors are loudly warning of an imminent stock market collapse. It doesn’t take a genius to see that this stock market bubble is going to end very badly just like all of the other stock market bubbles throughout history have, but if you could know the precise timing that it will end you could set yourself up financially for the rest of your life.

I want to be very clear about the fact that I do not know what will or will not happen by the end of October. But one mystery investor is extremely convinced that market volatility is going to increase over the next few months, and if he is correct he will make an astounding amount of money. According to Business Insider, the following is how the trade was set up…

To fund it, the investor sold 262,000 VIX puts expiring in October, with a strike price of 12.
The trader then used those proceeds to buy a VIX 1×2 call spread, which involves buying 262,000 October contracts with a strike price of 15 and selling 524,000 October contracts with a strike price of 25.
For reference, bullish call spreads are used when a moderate rise in the underlying asset is expected. Traders buy call options at a specific strike price while selling the same number of calls of the same asset and expiration date at a higher strike.
In a perfect scenario, where the VIX hits but doesn’t exceed 25 before October expiration, the trader would see a whopping $262 million payout.

I will be watching to see what happens. If this mystery investor is correct, it will essentially be like winning the lottery.

But just because he has made this wager does not mean that he has some special knowledge about what is going to happen.

For example, just look at what Ruffer LLP has been doing. They are a $20 billion investment fund based in London, and they have been betting tens of millions of dollars on a stock market crash which has failed to materialize so far. But even though they have lost so much money already, they continue to make extremely large bearish bets…

As of earlier this week, Ruffer had spent $119 million this year betting on a stock market shock, $89 million of which had expired worthless, according to data compiled by Macro Risk Advisors. The investor has gradually amassed holdings of about 1 million VIX calls through three occasions so far in 2017, and each time a significant portion expired at a loss.

Blame a subdued VIX for the futility. The fear gauge was locked in a range of 10 to 14 for the first three months of 2017, and while it has since climbed to as high as 15.96, it has been stuck well below 14 since a single-day plunge of 26% nine days ago. Earlier this week, the index closed at its lowest level since February 2007.

But that doesn’t mean Ruffer is giving up. Already loaded up on May contracts, the firm has continued to buy cheap VIX calls expiring later in the year — wagers costing about 50 cents.

I can understand why Ruffer has been making these bets. In a rational world, stocks would have already crashed long ago.

The only way that stock prices have been able to continue to rise is because of unprecedented intervention by global central banks. They have been pumping trillions of dollars into the financial markets, and this has essentially completely destroyed normal market forces. The following comes from David Stockman…

The Fed and its crew of traveling central banks around the world have gutted honest price discovery entirely. They have turned global financial markets into outright gambling dens of unchecked speculation.

Central bank policies of massive quantitative easing (QE) and zero interest rates (ZIRP) have been sugar-coated in rhetoric about “stimulus”, “accommodation” and guiding economies toward optimal levels of inflation and full-employment.

The truth of the matter is far different. The combined $15 trillion of central bank balance sheet expansion since 2007 amounts to monetary fraud of epic proportions.

In the “bizarro world” that we are living in today, many companies are trading at prices that are more than 100 times earnings, and some companies are actually trading at prices that are more than 200 times earnings.

Stock prices have become completely and totally disconnected from economic reality. As I discussed the other day, U.S. GDP has only risen at an average yearly rate of just 1.33 percent over the past 10 years, but meanwhile stock prices have been soaring into the stratosphere.

Nobody in their right mind can claim that makes any sense at all. Just like in 2000, and just like in 2008, this absolutely ridiculous stock market bubble will have a horribly tragic ending as well.

Once again, I don’t know what the exact timing will be. Stocks could start crashing tomorrow, but then the Swiss National Bank could swoop in and buy 4 million shares of Apple just like they did during the months of January, February and March earlier this year.

The biggest players in this ongoing charade are the global central banks. If they decide to keep pumping trillions of dollars into global financial markets, they may be able to keep the bubble going for a little while longer.

But if at any point they decide to withdraw their artificial assistance, those that have placed huge bets against the market are going to make absolutely enormous piles of cash.

Those That Wanted To Get Prepared Have Already Gotten Prepared By Now

July 11, 2016July 11, 2016 by Michael

Is the time for warning people to prepare for what is ahead coming to an end? For years, bold men and women all over America have been sounding the alarm and warning people to get prepared physically, financially, mentally, emotionally and spiritually for the great storm that is rapidly approaching. Personally, I have written more than 2,500 articles on my primary two websites combined, and so nobody can accuse me of not blowing the trumpet. It has gotten to the point that sometimes I am even tired of listening to myself warn the people. But now we are shifting into a new phase.

The other day I was reflecting on some of the things that I have been hearing lately. Sales of emergency food and supplies are way down across the entire industry. Many organizations and websites that have been instrumental in sounding the alarm for a long time are really struggling right now. On my websites, traffic has hit a bit of a plateau after experiencing a tremendous surge late last year. Overall, “prepping” was very hot just a few years ago, and at one time it was estimated that there were approximately three million “preppers” in the United States. But these days there seems to be a tremendous amount of apathy out there.

As I reflected on all of this, I came to one inescapable conclusion.

Those that wanted to get prepared have already gotten prepared by now, and those that did not want to get prepared are not likely to do so any time soon.

I personally know a lot of people that are very, very prepared and have been for a long time. Yes, there is still a small minority of people out there that only recently woke up and started prepping, but overall most of the preparation that people wanted to do has already been completed. And for those that have not done anything to prepare, you could argue with them until the moon turns to cheese and they still won’t take any action.

At this point the die has been cast. Most of those that felt that they should prepare have already prepared. Most of those that felt that they should repent have already repented. Most of those that felt that they should warn America have already sounded the alarm.

So now all that is left is to wait for the shaking to begin.

In looking back at what has transpired over the last several years, I think that it would be appropriate to say something about the failure of the church in America.

You see, if the churches of America were doing their job, all of the “watchmen” out there would not even be needed. Our voices would simply be lost in a chorus of thousands upon thousands of pastors, teachers, ministers and evangelists boldly warning people about what is coming to this nation.

But instead, there is just deafening silence coming from most of the mainstream churches.

The sad thing is that many, many church leaders understand very clearly what is coming, but they have purposely chosen not to warn the people. Some time ago, George Barna conducted a study that looked into why our churches are not addressing the key issues of the day, and what he discovered was absolutely astounding…

“‘What we’re finding is that when we ask them about all the key issues of the day, [90 percent of them are] telling us, ‘Yes, the Bible speaks to every one of these issues,” he explained. “Then we ask them: ‘Well, are you teaching your people what the Bible says about those issues?’ and the numbers drop…to less than 10 percent of pastors who say they will speak to it.”

Most churches in America don’t want to talk about the hard things, because they desperately want to make people feel comfortable. They want to entertain people and make them happy so that they will come back week after week and drop their money into the offering plate.

When it comes to defining success as a church, Barna found that there were five primary factors that were important to the majority of pastors, and none of them had anything to do with repentance and salvation through Jesus Christ…

“There are five factors that the vast majority of pastors turn to,” he outlined. “Attendance, giving, number of programs, number of staff, and square footage.”

Sadly, most Christians in America actually prefer these lukewarm churches, and the Apostle Paul warned that these times were coming nearly 2000 years ago. The following is what 2 Timothy 4:3-4 says in the Modern English Version…

³For the time will come when people will not endure sound doctrine, but they will gather to themselves teachers in accordance with their own desires, having itching ears, ⁴and they will turn their ears away from the truth and turn to myths.

You may not want to hear this, but the majority of churches in America have already gone apostate, and that is the truth.

We are slowly but surely losing an entire generation of Americans, and yet our dead and dying churches just continue to slumber. I shared the following numbers in a previous article, but they bear repeating. The following comes directly out of a Pew Research Center report…

Millennials – especially the youngest Millennials, who have entered adulthood since the first Landscape Study was conducted – are far less religious than their elders. For example, only 27% of Millennials say they attend religious services on a weekly basis, compared with 51% of adults in the Silent generation. Four-in-ten of the youngest Millennials say they pray every day, compared with six-in-ten Baby Boomers and two-thirds of members of the Silent generation. Only about half of Millennials say they believe in God with absolute certainty, compared with seven-in-ten Americans in the Silent and Baby Boom cohorts. And only about four-in-ten Millennials say religion is very important in their lives, compared with more than half in the older generational cohorts.

Those numbers are absolutely horrifying. Yes, there are still a few really good churches scattered across the country. But overall, the church in America is in really sorry shape, and the numbers don’t lie. Christianity is in rapid decline in the United States, and somebody better wake up and start doing something about it.

Over the years, I can’t tell you how many dead churches that I have sat in. That is why it is so refreshing when I actually find one where the gospel is preached and where people truly love one another. I have had the privilege of sharing my message in such a church in recent months, and I wish that there were a lot more of them out there.

Unfortunately, most ministers in America are really busy doing things other than what they should be doing. For instance, have you ever heard of “clergy response teams”? If you can believe it, the government has actually recruited ministers to help the population accept martial law when it is declared someday. The following comes from KSLA News…

Could martial law ever become a reality in America? Some fear any nuclear, biological or chemical attack on U.S. soil might trigger just that. KSLA News 12 has discovered that the clergy would help the government with potentially their biggest problem: Us.

Can you believe that?

Here is more from the report…

Such clergy response teams would walk a tight-rope during martial law between the demands of the government on the one side, versus the wishes of the public on the other. “In a lot of cases, these clergy would already be known in the neighborhoods in which they’re helping to diffuse that situation,” assured Sandy Davis. He serves as the director of the Caddo-Bossier Office of Homeland Security and Emergency Preparedness.

For the clergy team, one of the biggest tools that they will have in helping calm the public down or to obey the law is the bible itself, specifically Romans 13. Dr. Tuberville elaborated, “because the government’s established by the Lord, you know. And, that’s what we believe in the Christian faith. That’s what’s stated in the scripture.”

I don’t know about you, but I found that article to be extremely chilling.

But this is the state of things in America today. We have a dead church that is stuffed to the gills with dead ministers, and the people are not being told the truth about the great shaking that is coming to America.

And when the great shaking comes, there will be multitudes of these dead churches and ministries that will go under and never rise again.

Meanwhile, God will be raising up a Remnant, and that Remnant is going to shake the world.

So what do you think about all of this?

Please feel free to share your thoughts by posting a comment below…

European Stocks, Chinese Stocks And Commodities Are All Crashing – Are U.S. Stocks Next?

July 7, 2015July 7, 2015 by Michael

A global stock market crash has begun. European stocks are crashing, Chinese stocks are crashing, and commodities are crashing. And guess what? All of those things happened before U.S. stocks crashed in the fall of 2008 too. In so many ways, it seems like we are watching a replay of the financial crisis of 2008, but this time around the world is in far worse shape financially. Global debt levels are at an all-time high, the 75 trillion dollar global shadow banking system could implode at any time, and there are hundreds of trillions of dollars in derivatives that threaten to wipe out major banks all over the planet. The last major worldwide financial crash was almost seven years ago, and very little has been done since that time to prepare for the next one. If global markets do not calm down, we could see carnage in the months ahead that is absolutely unprecedented.

For months, European authorities have been promising us that a “Grexit” is already “priced in” to the markets and that any “contagion” from the Greek crisis will be “contained”. Of course everyone knew that was just a smokescreen. Just in the past couple of days since the Greek “no” vote, European stocks have already been crashing. The following comes from Zero Hedge…

Does this look contained to you?

Portugal, Spain, and Italy all collapsing…

As I mentioned at the top of this article, European stocks started crashing well before U.S. stocks started crashing during the last financial crisis. If you doubt this, just look at this chart, and this chart and this chart.

Will the same thing happen again this time?

And just like I have warned repeatedly, European bond yields have started to soar. When bond yields go up, bond prices go down, so many bond investors are losing a tremendous amount of money right now. Here is more from Zero Hedge…

Who’s next?

European bond risk is anything but “contained” as GGB 10Y Yields top 18%…

If there is not a last minute deal between Greece and her creditors, what we have witnessed so far in the bond markets will just be the tip of the iceberg. In the months ahead, we could witness a bond crash unlike anything that we have ever seen in all of history. Just consider what Egon von Greyerz recently told Eric King…

There is no liquidity in this market and this is where we will soon see a problem. We will see the bond market totally seizing up in the next few months. Eric, people simply don’t understand that this is a much bigger problem than Greece.

So we are talking about a worldwide problem, not just a Greek problem. The majority of the $100 trillion bond market is worthless, and of course a ticking time-bomb of over $1 quadrillion worth of derivatives is linked to that. This means that, sadly, we are heading into a major contagion that will lead to financial catastrophe for the world. This will also lead to an implosion of all bubble assets across the globe.

Hmm – there is that word “derivatives” again.

It is funny how that keeps popping up.

As things unravel over in Europe, a lot of desperate Europeans are feverishly purchasing physical gold. The following comes from Bloomberg…

European investors are increasing purchases of gold as Greece’s turmoil boosts the appeal for an alternative to the euro.

Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement. CoinInvest.com, an online retailer, said sales on Saturday and Sunday were the highest since Cyprus limited cash withdrawals in 2013, driven by a jump in German, French and Greek buyers.

Investors are searching for a safe haven after Greece imposed capital controls, closed banks and stopped selling gold coins to the public until at least July 6.

Meanwhile, Chinese stocks have continued to fall. Overall, Chinese stocks have fallen 27 percent since the peak, and a whopping 3.2 trillion dollars of “paper wealth” has been wiped out in China in just the last three weeks.

At this point things are so bad that about one-fourth of all stocks in China have already suspended trading according to CNN…

The turmoil in China’s stock market is so bad that some companies are calling it quits.

Over 700 Chinese companies have halted trading to “self preserve,” according to the state media. That means about a quarter of the companies listed on China’s two big exchanges — the Shanghai and Shenzhen — are no longer trading.

Desperate measures are being employed to try to stop the stock market crash in China. For example, over the weekend an alliance of securities brokerages pledged to invest “at least 120 billion yuan” in order to stabilize stock prices…

China’s top 21 securities brokerages said on Saturday they would collectively invest at least 120 billion yuan ($19.3 billion) to help stabilize the country’s stock markets after a slump of nearly 30 percent since mid-June. In addition, 57 Chinese mutual funds are reportedly investing 2.2 billion yuan in stock funds.

The Chinese central bank has gotten involved as well. In fact, the People’s Bank of China has taken the dramatic step of actually directly loaning money to brokerages…

In an extraordinary move, the People’s Bank of China has begun lending money to investors to buy shares in the flailing market. The Wall Street Journal reports this “liquidity assistance” will be provided to the regulator-owned China Securities Finance Corp, which will lend the money to brokerages, which will in turn lend to investors.

The dramatic intervention marks the first time funds from the central bank have been directed anywhere other than the banks, signalling serious concern from authorities about the crisis.

In addition, the Chinese government has taken the following steps to intervene…

-All short selling of stocks has been banned.

-China’s national social security fund has been banned from selling stocks, but they can continue to buy stocks.

-Local media has been banned from using the terms “equity disaster” and “rescue the market” in their news reports.

But despite everything that you just read, Chinese stocks have still been falling.

Meanwhile, global commodity prices are crashing. Just check out this chart. This is also something that happened before U.S. stocks crashed back in 2008.

Thankfully, U.S. stocks have not started crashing yet. But it should be noted that the “smart money” in the United States has been selling stocks like crazy since the “no” vote in the Greek referendum. And if the patterns that we witnessed seven years ago hold up, it is just a matter of time before we experience a stock market crash too.

Incredibly, there are a lot of people out there that very strongly believe that everything is going to be just fine. They have tremendous faith in the central bankers and in our political leaders, and they are assuring all the rest of us that there is no possible way that the global financial system could be brought down again.

I truly wish that they were right. If everything was going to be just fine, instead of writing about the coming economic collapse I could write about sports or do a blog dedicated to LOLcats. But of course the truth is that the “hopetimists” are dead wrong.

A great shaking is coming to our world, and life as we know it is about to change in a major way.

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