Falling Rocks In The Promised Land

Yes, traumatic market events (falling rocks) occur, even though markets are “managed,” statistics are manipulated, and politicians pretend to care about something besides their next election.

From John P. Hussman, Ph.D. Fair Value and Bubbles: 2017 Edition

“Unfortunately, investors seem to have concluded that central bank easing is omnipotent, despite the fact that the Fed eased persistently and aggressively, to no effect, through the entire course of 2000-2002 and 2007-2009 market collapses.”

From Bill Gross: Bill Gross Says Market Risk is Highest Since Pre-2008 Crisis

“Central bank policies for low-and-negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks, and insurance companies, according to Gross.”

From Billionaire Paul Singer:

“I’m very concerned about where we are in terms of the financial system, the economy, the American economy, the Global economy… After nine years of this artificial levitation on the part of financial assets – high-end real estate, art, the things that rich people buy – I think what we have today is a global financial system that’s just about as leveraged, and in many case more leveraged than before 2008.”

“Madoff Whistleblower Harry Markopolos Has Uncovered a New Fraud”

“Markopolos called what is left of the MBTA’s pension (Boston Transit Authority) a ‘Tender Vittles retirement plan’ meaning (sarcastically) that its participants would be eating cat food.” Is this different, except in degree, from Illinois, Chicago, New Jersey, CalPers (California) and many other pension plans?

“No good outcomes result when you mix politics and money,” Markopolos said.

From Karl Denninger: Illinois is Collapsing: It’s Coming Everywhere

“It was obvious that Illinois was going to fail as a state before I left in 2000.”

Denninger, in my opinion, sees the past, present, and future more clearly than most people, including self-motivated politicians and Wall Street Bankers. He is worried about ever-increasing U.S. government expenditures, long term commitments, and national debt. He also warns about public and private pension plans, medical/sick care costs and more.

Speaking of bubbles and near-bubbles, consider the “Everything Bubble,” and the exceptional rallies in the NASDAQ 100 and Amazon stock. The current rallies are not as steep as during the 1999-2000 NASDAQ but the NASDAQ 100 and the “FAANG” (Facebook, Apple, Amazon, Netflix, Google) stocks have risen far too high.

What created the bubbles and near-bubbles? Central banks created $15 trillion from “thin air” and much of that “funny money” boosted stock prices. Japanese, Swiss and other central banks intentionally created currency and bought U.S. stocks, such as Amazon and Apple, which also promoted the NASDAQ levitation.

An excellent 20 minute video explains how central banks “create” currencies and expand the total digital debt and credit.

Crash – Correction?

The U.S. stock markets could have crashed in 2015, but did not. They could have crashed several times in 2016, but did not. They could have crashed in 2017, but are hitting all-time highs instead. The sizable rallies have been enabled by central bank purchases of stocks.

What happens if central banks cease purchases, or “heaven forbid,” those central banks sell aggressively? Could such sales create a “market event” to crush an economy or a sitting President or be used to enrich Wall Street?

The 1987, 2000, and 2008 market crashes hurt most people. Preparation, in case central banks don’t print enough currency to keep bubble-like markets inflated, is appropriate. Brilliant and wealthy people are concerned about the global financial system and the potential disasters created by excessive debt, central banks and politicians.

Hindenburg Omen: We Got an Official Confirmed Hindenburg Omen Stock Market Crash Warning Signal

Robert McHugh, Ph.D. says his revised Hindenburg Omen seldom occurs but when it does, pay attention. It is not a guarantee of a crash, but it is noteworthy!

Europe: Banco Popular failed in Spain. Italian banks are shaky. Are Deutsche Bank and Chinese wealth management Ponzi debts next?

Repeat:

“No good outcomes result when you mix politics and money,” Markopolos said.

I SUGGEST:

Gary Christenson

The Deviant Investor