What Will the Next Financial Crisis Look Like?

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via Daniel Lacalle: With the 10th anniversary of the Lehman Brothers bankruptcy having just passed and the recent stock market drop, the fear of a new financial crisis is palpable. And those fears are justified. The question is not whether there will be a crisis, but when? In the past 50 years, we have seen more … Read more

Housing Bust in Sydney & Melbourne Gains Momentum

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Wolf Richter wolfstreet.com, http://www.amazon.com/author/wolfrichter But the central bank has kept interest rates at record lows! The relentlessness of the housing busts in the regions of Sydney and Melbourne – they account for about 55% of Australia’s housing stock by value – is quite something. At some point, it seems, the price declines would slow down … Read more

Powell May Mark the Beginning of an Independent Fed

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BY JOHN MAULDIN The mainstream media is packed with criticism of Jerome Powell’s press conference. The market didn’t like what it heard and immediately tanked. People called him tone deaf for not listening to the market. What was Powell thinking? There were many accusations that Powell fumbled the ball, not telling the market what it wanted … Read more

5 places America should avoid going to war

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From the National Interest: 2018 was a year of breakthrough diplomacy and proxy warfare, Trumpian chaos and unexpected U.S. military drawdowns. An American president and a North Korean dictator shook hands for the very first time since the Korean Peninsula was divided into two nations. American pilots released more munitions in Afghanistan this year than at any other … Read more

2019: Japanification / LBO’ing of world economies & mkts continues; asset bubbles bursting; debt replacing organic growth.

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via @MI_Investments: Q/T stopped forcing C/B’s to explain $20T bal sheets not temporary. US deficits $1T–>$2T. Debt crises erupt + spread globally. #DebtMatters #Vol #TradersMkt Strong economy, Jay Powell? Or an economy on IV infusions of debt just to maintain 2% growth? Global debt-to-GDP is 275%. Each 100% portion of the 275% total would cost … Read more

TSLA – “Growth Stock” “Endless Demand” meme died today.

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https://twitter.com/JTSEO9/status/1080468631887249408 Tesla missed Q4 delivery #s Despite the incentive for customers to buy, before the impending loss of $3,750 / car federal subsidy Q3 = best $TSLA will ever have Price cut this morning = straight to margins Growth story = OVER Profit story = OVER Cash crunch coming — Gabe Hoffman (@GabeHoff) January 2, … Read more

WSJ: With Corporate Debt at Record Levels, the Economy Better Keep Roaring…or Else

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Corporate Debt Is Reaching Record Levels “U.S. corporate debt has climbed to roughly 46% of GDP, the highest level on record. Observers worry that highly leveraged companies could pose a threat to the global economy, especially if growth slows and rates continue to rise.” Global Manufacturing #PMI down to 27-month low of 51.5 in December, … Read more

Chief Trump China Tariff Negotiator Lighthizer: More Tariffs May Be Needed

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via CNBC: Robert Lighthizer has reportedly told friends and associates he is intent on preventing Trump from accepting “empty promises” like temporary increases in soybean purchases. In order to avoid this, the U.S. may have to slap tariffs on more Chinese goods, Lighthizer has said, according to The New York Times. U.S. Trade Representative Robert … Read more

Mises: “Boom-Bust Cycles and Easy Money”

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via mises.org: Only a few months ago most economic commentators were sanguine about prospects for the US economy. Most of them did not expect an imminent downturn. Now all that has changed with most experts expecting the economy to enter a downward phase of the economic cycle by 2019. According to experts, the key factor behind … Read more

Market Volatility Designed from the Top Down

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A stock market roller coaster on par with that of a decade ago is back, and essentially for the same reasons. No, not just economic fundamentals involving back-breaking debt, corporate profligacies and geopolitical risks, but because said volatility and the asset destruction-slash-consolidation that results are in part due to much longer-term design. This latest design … Read more

China’s Xi says Taiwan reunification ‘inevitable’

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Taiwan’s unification with the mainland is “inevitable”, President Xi Jinping said Wednesday, warning against any effort to promote the island’s independence and saying China would not renounce the option of military force to bring it into the fold. https://www.msn.com/en-gb/news/world/chinas-xi-says-taiwan-reunification-inevitable/ar-BBRHnfy?li=BBoPWjQ&ocid=mailsignout “China must and will be united… which is an inevitable requirement for the great rejuvenation of … Read more

Global Real Estate Bubble Pop: Sydney House Prices Crash 11.1% in a Year

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via Bloomberg: Prices in Australia’s largest city drop 11.1% from 2017 peak CoreLogic sees tighter credit weighing on prices this year   The downturn in Sydney’s property market is set to deepen this year as tighter lending standards and the worst slump in values since the late 1980s cause nervous buyers to sit on the sidelines. Average … Read more

Jack Bogle, founder of index fund giant Vanguard Group, is warning investors to prepare for 2019 by decreasing exposure to stocks…

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Jack Bogle, founder of index fund giant Vanguard Group, is warning investors to prepare for 2019 by decreasing exposure to stocks and increasing investment in defensive strategies, such as fixed income securities like bonds. “Trees don’t grow to the sky, and I see clouds on the horizon. I don’t know if and when they’ll arrive. … Read more

Einhorn’s Greenlight Extends Decline to 34% in Worst Year

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https://www.bloomberg.com/news/articles/2019-01-01/einhorn-s-greenlight-extends-drop-to-34-in-worst-year-on-record David Einhorn closed out 2018 with his biggest annual loss ever for the 22-year-old Greenlight Capital. The firm’s main hedge fund fell 9 percent in December, extending this year’s decline to 34 percent, according to an investor update viewed by Bloomberg. Greenlight posted some of the industry’s best returns in its early years, but … Read more

NOT BULLISH: U.S. junk-bond issuance fell to zero in December for the first time in a decade and we have just witnessed one of the biggest drops in the global earnings revision ratio since 1988

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Leveraged loan market concerns https://t.co/rwiCZaTNDB — Alastair (@StockBoardAsset) January 2, 2019 U.S. junk-bond issuance fell to zero in December for the first time in a decade. @TheTerminal pic.twitter.com/8W0IefGGtU — Lisa Abramowicz (@lisaabramowicz1) January 2, 2019 We have just witnessed one of the biggest drops in the global earnings revision ratio since 1988. pic.twitter.com/E9ta8XmvcU — jeroen … Read more

2008 Great Recession Will Pale Compared to 2019 Bear Market

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This is a replay of SchiffGold’s CEO Peter Schiff’s RT interview aired on December 28, 2018. ——————————————————- 2008 Great Recession Will Pale Compared to 2019 Bear Market | Peter Schiff RT Interview __________________________________ After the worst Christmas Eve in the history of the stock market, the Santa Clause rally came late. Markets bounced back in … Read more