central banks
by
Brian Pretti
by
Brian Pretti
Executive Summary
- New bear market + re-enter recession = 30-40% drop in stock prices
- What are the chart of the best technical indicators telling us?
- Confusion reigns during the transition from bull market to bear
- Why volatility will reign & capital protection should be prioritized
If you have not yet read Part 1: Has The Market Trend Shifted From Bull To Bear? available free to all readers, please click here to read it first.
It’s The Global Economy, Stupid!
I believe another key question for equity investors right now is whether the recent noticeable slowing in global economic trajectory ultimately results in recession. Why is this important? According to the playbook of historical experience, stock market corrections that occur in non-recessionary environments tend to be shorter and less violent than corrections that take place within the context of actual economic recession. Corrections in non-recessionary environments have been on average contained to the 10-20% range. Corrective stock price periods associated with recession have been worse, many associated with 30-40% price declines known as “bear market” environments.
We can see exactly this in the following graph. We are looking at the Dow Jones Global Index. This is a composite of the top 350 companies on planet Earth. If the fortunes of these companies do not represent and reflect the rhythm of the global economy, I do not know what does. The blue bars marked in the chart are the periods covering last two US recessions. US recessions that were accompanied by downturns in major developed economies globally. As I’ve stated many a time, economies globally are….
Why The Next Drop Will Likely Be 30-40%
PREVIEW by Brian PrettiExecutive Summary
- New bear market + re-enter recession = 30-40% drop in stock prices
- What are the chart of the best technical indicators telling us?
- Confusion reigns during the transition from bull market to bear
- Why volatility will reign & capital protection should be prioritized
If you have not yet read Part 1: Has The Market Trend Shifted From Bull To Bear? available free to all readers, please click here to read it first.
It’s The Global Economy, Stupid!
I believe another key question for equity investors right now is whether the recent noticeable slowing in global economic trajectory ultimately results in recession. Why is this important? According to the playbook of historical experience, stock market corrections that occur in non-recessionary environments tend to be shorter and less violent than corrections that take place within the context of actual economic recession. Corrections in non-recessionary environments have been on average contained to the 10-20% range. Corrective stock price periods associated with recession have been worse, many associated with 30-40% price declines known as “bear market” environments.
We can see exactly this in the following graph. We are looking at the Dow Jones Global Index. This is a composite of the top 350 companies on planet Earth. If the fortunes of these companies do not represent and reflect the rhythm of the global economy, I do not know what does. The blue bars marked in the chart are the periods covering last two US recessions. US recessions that were accompanied by downturns in major developed economies globally. As I’ve stated many a time, economies globally are….
by
Chris Martenson
Executive Summary
- China is rolling over
- Contagion will eventually take down the core economies, including the US
- We are witnessing a full-blown collapse of the commodity complex
- Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation
If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.
The Chinese GDP Lie
Right off the top, China is not growing anywhere near the 7% it claims. That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.
Fortunately, hardly anyone is falling for that particular fib any longer. Let’s start with the completely obvious manufacturing slump that has hit China:
Chinese Factory Gauge Slumps to Lowest Level Since March 2009
Sept 22, 2015
A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.
A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.
Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.
(Source)
The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction. Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target? You know, because China is…
From Deflation To Hyperinflation
PREVIEW by Chris MartensonExecutive Summary
- China is rolling over
- Contagion will eventually take down the core economies, including the US
- We are witnessing a full-blown collapse of the commodity complex
- Deflation will win the day over the next year, but then get ready for helicopter money hyperinflation
If you have not yet read Part 1: Deflation Warning: The Next Wave available free to all readers, please click here to read it first.
The Chinese GDP Lie
Right off the top, China is not growing anywhere near the 7% it claims. That’s just a politically useful lie that the Chinese tell to the world as much as they tell to themselves.
Fortunately, hardly anyone is falling for that particular fib any longer. Let’s start with the completely obvious manufacturing slump that has hit China:
Chinese Factory Gauge Slumps to Lowest Level Since March 2009
Sept 22, 2015
A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the economy as its old growth engines splutter.
A global sell off in riskier assets gained pace after the preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics dropped to 47.0 in September. That missed the median estimate of 47.5 in a Bloomberg survey and fell from the final reading of 47.3 in the previous month. Readings have remained below 50 since March, indicating contraction.
Premier Li Keqiang’s growth target of about 7 percent for this year is being challenged by a slowdown in manufacturing and exports even as services and consumption show resilience.
(Source)
The way a PMI reading works is anything over 50 indicates expansions and anything under 50 indicates contraction. Anybody care to explain to me how China can be sporting sub-50 readings every month since March — that’s five full months — and still be claiming to be aiming for a 7% annual growth target? You know, because China is…
by
Chris Martenson
The central planners are setting the stage for the next round of officially sanctioned theft and this time they mean to assure that you have no way(s) of escaping.
They’re coming for your cash. This is a risk that Charles Hughes Smith explored for us back in June in a very well-received analysis.
Once a fringe idea, this concept is now being openly discussed and debated at the highest levels publicly. Which means it is being hotly discussed behind closed doors, and likely has been for a long time.
The War On Cash Intensifies
PREVIEW by Chris MartensonThe central planners are setting the stage for the next round of officially sanctioned theft and this time they mean to assure that you have no way(s) of escaping.
They’re coming for your cash. This is a risk that Charles Hughes Smith explored for us back in June in a very well-received analysis.
Once a fringe idea, this concept is now being openly discussed and debated at the highest levels publicly. Which means it is being hotly discussed behind closed doors, and likely has been for a long time.
by
Nomi Prins
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