I've done an incredible amount of Macro Research. I think this market is going down & going down hard!
It's got to be a Debt Deleveraging Cycle. The Magic Ratio Shows it is Deflation
Note on that Magic Ratio Chart: The WLSH bounces off and is trading at the same levels it was at when the dollar-bull run started taking off (slightly before end QE) I think that almost everything is riding on what this dollar does. Like I've been saying I still think that we may not see the Bear Show Up for the Kill until the Dollar Breaks Out Higher..
The Worse-Off these Countries Become: The Stronger the Dollar Will be as companies scramble to pay off Dollar Denominated Debt
Unsold Inventory is Spiking
Corporate Profits are Declining
Cash Assets of Commercial Banks Have Peaked & are Declining. Look at the big Spikes down. What is causing them? What is going on that is causing Banks to sell-off their cash assets?
The Dollar is at levels essentially unchanged in 25 years.
Homeownership unchanged in 25 years. Clearly in a downtrend.
I think we need to watch Japan Closely & possibly even short them. Japan Proves that Extreme CB Policy Does Not Work. On 550dma. Huge!
I was looking at these Markets in the scope of my lifetime & I think it is interesting how Both the Dollar & Oil are around the same level they were when I was born. Oil Went on a Super-Boom thanks to the Bush Corruption. (I've only seen government become more corrupt & incompetent) Look at that incredible run in stocks though! You know, the Russell has Negative Earnings. This is a lot of fluff in the equity markets that probably should go BK. I wonder if just like oil, we see WLSH go back to the levels of 1990...
Also rates have only gone down! Even I remember being taught the important of compound interest when I was very young. If rates reverted back to 1990 levels: Chaos!
Because governments own the bonds means that they are unlikely to ever sell them. However, by purchasing the entire market, don't they essentially drain the liquidity right out of it? Seems to me, all you need is a third party panicking & 1 trade sets the price of a market.. If people decide that the bonds are worthless & Japanaese, European, Italian, Spanish, American Debt is only worth taking the risk for a much higher yield. I think that rates could theoretically spike like crazy & destroy highly leveraged banks/speculators who use these bonds as bedrock collateral for $trillions of derivatives bets in all markets..
Because governments own the bonds means that they are unlikely to ever sell them. However, by purchasing the entire market, don't they essentially drain the liquidity right out of it? Seems to me, all you need is a third party panicking & 1 trade sets the price of a market.. If people decide that the bonds are worthless & Japanaese, European, Italian, Spanish, American Debt is only worth taking the risk for a much higher yield. I think that rates could theoretically spike like crazy & destroy highly leveraged banks/speculators who use these bonds as bedrock collateral for $trillions of derivatives bets in all markets..
Government Debt is a ticking time-bomb but I believe it will be Corporate Debt that will take down the stock market. Note what happened to B Corporate Debt Yield during the Great Depression.
Watch the Credit Markets Closely. I suspect this Deflationary Bear Market (If that's what's coming) is going to be all about Defaults.
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