- As major stock markets around the world crumble, the “Don’t Worry, Be Happy” crowd that makes up much of the U.S. financial services industry wants their clients to believe the U.S. market is insulated from the world. They hope their clientele is blind to the major cracks already showing up here and the ever-increasing number of bearish technical and fundamental factors.
It’s not “if” we fall but when
- Thanks to a major deflation wind blowing across the world, U.S. Treasuries are the lesser of two evils for now. But to appreciate the enormous bubble that has grown worldwide, I borrow this quote from Gainspainscapital.com:
“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.
And what a bubble it is.
All told, globally there are $100 trillion in bonds in existence today.
A little over a third of this is in the US. About half comes from developed nations outside of the US. And finally, emerging markets make up the remaining 14%.
Over $100 trillion…the size of the bond bubble alone should be enough to give pause.
However, when you consider that these bonds are pledged as collateral for other securities (usually over-the-counter derivatives) the full impact of the bond bubble explodes higher to $555 TRILLION.
To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).”
- While gold is off its lows, it needs to do much more work on the upside before an “all-clear” can be given. This would start with getting above $1,135 and staying there.
You can cut the bearishness for commodities with a knife. While we may not be at “the” bottom, 3+ decades in this business has taught me when opinion becomes so one-sided and you end up finding a needle in a haystack faster than an opposing opinion to the overwhelming sentiment in the current marketplace – can you spell “bottom-near”?
- 18+ months away from the junior resource market may have stopped the bleeding, but old habits die hard. It may be like the third year in a row when I say I can’t believe how depressed mining shares are (but not as depressed as the people who still own them).
While my crystal ball was sold “As Is”; the fact that so many mining shares are so far away from long established trend lines and key moving-averages, a major technical bounce (as we move into the usually reliable seasonality timeframe for gold) should make anyone left not already unconscious from banging their heads (swearing they would never buy another mining share again), interested in this group.
- John Crudele continues to expose the farce, better known as the monthly employment report.
- I’ve spoken about oil falling into the $30’s and see nothing to suggest I won’t win the “Blind-Squirrel” award for oil predictions.
- I said the auto loan market is a financial crisis waiting to happen. It’s coming.
- How long before this man is doing live “remotes” for CNBC-TV (Can’t be worse than Cramer)?
- Leaving a legacy for your heirs by writing one.