Another Bloodbath: Sector by Sector Carnage – No Hiding Places

I’m sorry but the global cooling legend is pure nonsense. To begin with, a solar minimum has a rather small effect on global temps, up to 0.25 degrees of cooling if even that, while temps are already about 1 degree above the beginning of the 20th century. In addition, the “Little Ice Age” in Europe and North America (and “the year without summer”) occurred due to vulcanism, not due to the Maunder minimum. So better to stop spreading this global cooling stuff. Ain’t gonna happen.

Food/ag prices will be heading higher, primarily due to global cooling and the coming mini ice age that’s due with the Maunder Minimum in 10-20 years – link to armstrongeconomics.com.

“Everything is correlated. There are no sector hiding spots.” Agriculture????? Jim Rogers has mentioned recently investing in the beaten up agriculture sector. An article from Acting Man mentions this and also “DBA”. Possibly the only sector not down from January. Not invested in agriculture and in fact unloaded most of my equities early last year. Will have to do further research into the sector to see if it is a possibly buy but wondering if anyone has any opinions and this may possibly a hiding spot to invest?

“This is just a down payment on what’s likely ahead.”…….

Well said Mish.

AND, for other armchair experts in the comments sections…please don’t quote traders that got “caught”…

real traders keep their mouth shut and play how the money is moving in whichever direction and whichever market…..real traders make so much money in these moves it would defy your imagination. And they don’t chirp about it, they just go home drink 100year old Macallan and let others go into conniptions about the why and hows…..

Those that get caught, aren’t traders.

xil, Bam_Man, Truthseeker – I wish I could write in a less condescending tone to reach more people, but the facts are the facts, and talking your book is worse. What do you say to a Socialist/Communist/Collectivist that maintains their position, even though it has NEVER worked even once?

I have learned a lot from Mish, as well as others like Sinclair, Rubino, Schiff, Sprott, and other gold bugs and dollar haters. However, when one’s biases and beliefs get in the way of the facts and history, it must be exposed. For example, when global investment is 10x the size of global trade, and even more influential than the Fed, why pretend the Fed is all powerful and that setting up an alternative to the SWIFT system is going to doom the dollar? The Invisible Hand (self interest) moves global investment, and until there is another market that’s deep and broad enough, there is simply no alternative to the US dollar for the big money to park. A new reserve currency is coming, maybe as soon as 2021, but it won’t occur until a RISING dollar blows up all the dollar-based debts around the world.

The gold bugs/dollar-haters keep calling for hyperinflation, mistakenly thinking we are Venezuela or the Weimar Republic, who failed because confidence was lost and they did not have the reserve currency. No one would rightly buy their bonds. The US has not had this problem, but govt corruption, hubris, and the collapse of the rule of law are undermining this advantage.

A global recession is coming because broke govt’s will not proactively reform, and thus they will get increasingly agressive going after other people’s money. IL is our posterchild – link to armstrongeconomics.com. However, why do people think the safe-haven is govt bonds, when rates are at 5000-yr lows, govt’s are insolvent, and they frequently default?

There will be a knee-jerk reaction into bonds, but reality will sink in when the govt bond bubble pops and the sovereign debt contagion spreads. Where will global investment go? In this trend from public to private, equities become a safe-haven. As the demand for govt bonds declines with confidence, rising rates will blow-up the GLOBAL debt bomb from the periphery to the core. This reality is also the driving force behind the development and adoption of a peer-to-peer, encrypted solution that’s outside the current flawed and corrupt system. Why would anyone, other than those vested in the old system, not be supportive of cryptos/blockchain?

The most data-based, unbiased source of information, that has an unparalled proven track record, is Armstrong. You ignore him at your peril.

I used to seek out Louis Rukeyser at times like these! Now it is Mish. Although Louis was usually reassuring.

I think the market sells off before it is evident in earnings whether or not inflation data is OK

Well worth a read – link to pro.creditwritedowns.com

2/9/18=Double Black Friday!

“If you start to believe that the long end of the curve is going to start to go up, it makes sense that equities would have an adjustment,” Harker says while answering questions from reporters after a speech in New York.

And then New York Fed’s Bill Dudley ventured on to Bloomberg TV to calm the masses, proclaiming that this drop is “small potatoes” and the decline in equity values (has no economic implications.”

(link to zerohedge.com)

This is what probably did the stocks in during the last hour… it looked like the Fed was not going to come riding in with its PPT in tow!

What does it say about the market? It will not take too long for the markets to unravel without the central banksters’ put. And I do not mean only the Fed. If this is the state of the market now with only the Fed acting and that too gingerly, can you imagine what happens if the other central banksters – ECB, BOJ, PBOC and BOE get into the act.

The central banksters have got themselves into a pretty pickle, looks like! But then not to worry, after all they are ATLAS, they can swing it their way when they want to. But then what happens one fine day when they find they can’t!

In the next recession – which you apparently believe will never happen – there will be bankruptcies galore among all these highly leveraged “glamour” stocks and there will be a flight to safety (gold, cash and government bonds) such as the world has never seen. But I’m sure that a genius like you will know exactly when to sell everything and get out unscathed.

If it’s hard to liquidate, easy to manipulate, takes longer to capitulate.

“Everything is correlated. There are no sector hiding spots. This is just a down payment on what’s likely ahead.”

You conveniently ignored cryptos, which are an asset class, and a very uncorrellated asset class, which is why they are being added by hedge funds. Most cryptos were up today, and some big, like Bitcoin Cash, up over 30%.

You are also misleading readers with your US-centric bias about what’s “likely ahead”. Where is the big money that’s invested around the world going to go when the govt bond bubble pops, and the euro and yen implode? BTW, global investment swamps trade and anything the Fed will do.

The stock market is the only market big enough to absorb the flows, but you continue to stick to your guns, which have been shooting blanks for at least five years. Today, the market backfired and you think your gun went off. In a month stocks and cryptos will be off to the races again, as the rest of the world (periphery), which has a bigger debt problem, implodes ahead of the core (USA).

The world is run by investors buying “Lands and Brands” (Read: Property & Stock). If I should buy Apple, or all the land in New York, on a credit card, then the book value of these assets are guaranteed to rise by the corresponding amount and I can sleep safe and sound knowing that even if these assets where worth infinity-billion dollars, the market can NEVER supply more of them.

The market value, correspondingly, is premised on the existence of an entire world of rent-seeking investors lining up to buy these assets with even greater figures on their credit cards. By this principle, we are all made ever richer, who own a house, a 401k or a pension.

-But now what the APR on the investors credit card should go up?
-What if the Lands and Brands that we own should go out of fashion for any reason, coming either from the real or the financial economy?
-How much apparent wealth would be lost?
-What untold figures would have be wiped of the ledgers of banks who provided the credit to buy these assets?

If either the stock market or the property market crashes, then world goes into bankruptcy. History proves this.

I found a hiding place….VanEck Merk Gold Trust (OUNZ) 12.97 +.02 (+.15%)

I suggest we move this goal post too: making 20% the new percentage classifying a market correction in an everything bubble environment. Then everyone can feel better.