Insider
by
Chris Martenson
The deflation monster was evident across the global markets today, and the possibility of a market crash remains as high as ever.
In the overnight session on Tuesday, everything fell apart.
We can now clearly see the tracks of the deflation monster stomping across the world stage. While a retreat into bonds (safety) has happened, that’s just the normal first reaction to such a terrible financial situation. However, those bonds will prove to be roach motels as the next stage of this monster will be massive bond defaults of all varieties.
And…..It’s Gone!
PREVIEW by Chris MartensonThe deflation monster was evident across the global markets today, and the possibility of a market crash remains as high as ever.
In the overnight session on Tuesday, everything fell apart.
We can now clearly see the tracks of the deflation monster stomping across the world stage. While a retreat into bonds (safety) has happened, that’s just the normal first reaction to such a terrible financial situation. However, those bonds will prove to be roach motels as the next stage of this monster will be massive bond defaults of all varieties.
by
Chris Martenson
Executive Summary
- There are too many signs of deflation to deny it's winning the day
- Why China's weakening will accelerate the global economy's decent
- Why this next crisis will be worse than 2008
- What will it look like if things really get out of control (how bad could things get?)
- The best investments to be making now, before the rout
If you have not yet read The Deflation Monster Has Arrived, available free to all readers, please click here to read it first.
Too Many Warning Signs To Talk About
The deflationary monster is here and there are almost too many warning signs to list, let alone fully describe.
So I’ll just list and link them…you can follow up on the details if you want, it’s the ‘general vibe’ I want to get across.
Here are the signs of a weak economy that we are dealing with:
- Oil in the $20’s (!!)
- Copper under $2
- Baltic Dry Shipping Index at the lowest ever at 383 and down ~50% in the past year.
- Wal-Mart closing 269 stores, 154 in the US.
- Business inventories to sales at new cycle highs
- U.S. freight volume falls for first time in almost three years
- US retail sales fall 0.1% in December
- Empire State index weakens to recession lows.
- South African rand hits new all-time lows in 2016
- Brazil’s Real Falls Sharply Against Dollar
- Brazil Unemployment Rate Rises to 9%
- Canadian Dollar Hits 13 Year Low Against US Dollar
- U.S. Energy Junk Bond Spreads At Record Width
- Nigeria’s Currency Plummets On Open Market
- Mexico’s Peso Hits New All-Time Low
- Chinese Stocks Enter Bear Market (again)
- European Stocks Enter Bear Market
The pattern here is one of rapidly slowing economic activity and mounting pain starting “from the outside in” as emerging markets and the poor people within the core countries bear the brunt at first. Things always get rolling to the downside starting with the weakest, peripheral elements first.
Copper and oil are providing very clear signs that economic activity is not just slow, but in rapid retreat. Wal-Mart tells us that its shoppers are having trouble. The fresh all-time lows in a variety of currencies, plus massive weakness in others, is telling us that the virtuous portion of the liquidity cycle that the Fed, et al., unleashed on the world has entered the vicious part of the cycle.
The pain will spread to the center with increasing speed. The main question is if the authorities can stop that before the momentum becomes too great to halt? And what will happen if they cannot?
The answer to that is…
Why This Next Crisis Will Be Worse Than 2008
PREVIEW by Chris MartensonExecutive Summary
- There are too many signs of deflation to deny it's winning the day
- Why China's weakening will accelerate the global economy's decent
- Why this next crisis will be worse than 2008
- What will it look like if things really get out of control (how bad could things get?)
- The best investments to be making now, before the rout
If you have not yet read The Deflation Monster Has Arrived, available free to all readers, please click here to read it first.
Too Many Warning Signs To Talk About
The deflationary monster is here and there are almost too many warning signs to list, let alone fully describe.
So I’ll just list and link them…you can follow up on the details if you want, it’s the ‘general vibe’ I want to get across.
Here are the signs of a weak economy that we are dealing with:
- Oil in the $20’s (!!)
- Copper under $2
- Baltic Dry Shipping Index at the lowest ever at 383 and down ~50% in the past year.
- Wal-Mart closing 269 stores, 154 in the US.
- Business inventories to sales at new cycle highs
- U.S. freight volume falls for first time in almost three years
- US retail sales fall 0.1% in December
- Empire State index weakens to recession lows.
- South African rand hits new all-time lows in 2016
- Brazil’s Real Falls Sharply Against Dollar
- Brazil Unemployment Rate Rises to 9%
- Canadian Dollar Hits 13 Year Low Against US Dollar
- U.S. Energy Junk Bond Spreads At Record Width
- Nigeria’s Currency Plummets On Open Market
- Mexico’s Peso Hits New All-Time Low
- Chinese Stocks Enter Bear Market (again)
- European Stocks Enter Bear Market
The pattern here is one of rapidly slowing economic activity and mounting pain starting “from the outside in” as emerging markets and the poor people within the core countries bear the brunt at first. Things always get rolling to the downside starting with the weakest, peripheral elements first.
Copper and oil are providing very clear signs that economic activity is not just slow, but in rapid retreat. Wal-Mart tells us that its shoppers are having trouble. The fresh all-time lows in a variety of currencies, plus massive weakness in others, is telling us that the virtuous portion of the liquidity cycle that the Fed, et al., unleashed on the world has entered the vicious part of the cycle.
The pain will spread to the center with increasing speed. The main question is if the authorities can stop that before the momentum becomes too great to halt? And what will happen if they cannot?
The answer to that is…
by
Chris Martenson
Executive Summary
- Why a crash is likely
- Why the machines have won, and regular investors should flee these markets
- Why the coming oil company bankruptcies will trigger a deflationary rout
- Why we've passed Peak Easy
If you have not yet read Markets Are Correcting Hard, available free to all readers, please click here to read it first.
The Larger Lesson (Why A Crash Is Likely)
Look, the financial markets are broken — the US, in China, and largely everywhere else around the globe. The sad fact is that the regulators have utterly failed to impose any meaningful limits on the rise of the computers and their high frequency hi-jinks.
Now those computers dominate the entire market landscape for better and, eventually, worse.
The reason I say ‘worse’ is because the computers deliver the appearance, but not the reality, of market liquidity.
As long as they detect that everything is operating normally, or at least within their accepted bands or limits, then they indeed provide plenty of liquidity. But when events exceed those limits?
The computers just shut down, revealing the true lack of market depth. The key story of all markets, bonds, commodities, futures and equities, is that each has experienced a vast diminishment of liquidity.
Share volumes are down on the equity exchanges as fewer and fewer participants are willing play a rigged game. That’s not just…
Why A Crash Is Likely
PREVIEW by Chris MartensonExecutive Summary
- Why a crash is likely
- Why the machines have won, and regular investors should flee these markets
- Why the coming oil company bankruptcies will trigger a deflationary rout
- Why we've passed Peak Easy
If you have not yet read Markets Are Correcting Hard, available free to all readers, please click here to read it first.
The Larger Lesson (Why A Crash Is Likely)
Look, the financial markets are broken — the US, in China, and largely everywhere else around the globe. The sad fact is that the regulators have utterly failed to impose any meaningful limits on the rise of the computers and their high frequency hi-jinks.
Now those computers dominate the entire market landscape for better and, eventually, worse.
The reason I say ‘worse’ is because the computers deliver the appearance, but not the reality, of market liquidity.
As long as they detect that everything is operating normally, or at least within their accepted bands or limits, then they indeed provide plenty of liquidity. But when events exceed those limits?
The computers just shut down, revealing the true lack of market depth. The key story of all markets, bonds, commodities, futures and equities, is that each has experienced a vast diminishment of liquidity.
Share volumes are down on the equity exchanges as fewer and fewer participants are willing play a rigged game. That’s not just…
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