Home

markets

AP Twitter Hack Reveals Just How Broken Our Markets Really Are

Two themes that we've been consistently stressing over the past several years were beautifully illustrated today, courtesy of a hacked AP Twitter feed.

They are:

Our markets are broken (courtesy of High Frequency Trading, or HFT, computers), and
When things finally shift, they will do so at a speed that will shock us.

But first, the hacked AP Twitter feed…

AP Twitter Hack Reveals Just How Broken Our Markets Really Are

PREVIEW by Chris Martenson

Two themes that we've been consistently stressing over the past several years were beautifully illustrated today, courtesy of a hacked AP Twitter feed.

They are:

Our markets are broken (courtesy of High Frequency Trading, or HFT, computers), and
When things finally shift, they will do so at a speed that will shock us.

But first, the hacked AP Twitter feed…

Bill Fleckenstein: Hold Tight To Your Gold

by Adam Taggart

The bond market is an accident waiting to happen.

When the bond market finally does crack, it is going to be one epic nightmare that is going to make 2008 and 2009 seem like a picnic. It will be a different kind of a crisis; but it will be an enormous crisis. These people that are bullish about stocks and bonds and the bond market, they do not understand anything.

Bill Fleckenstein: Hold Tight To Your Gold

by Adam Taggart

The bond market is an accident waiting to happen.

When the bond market finally does crack, it is going to be one epic nightmare that is going to make 2008 and 2009 seem like a picnic. It will be a different kind of a crisis; but it will be an enormous crisis. These people that are bullish about stocks and bonds and the bond market, they do not understand anything.

Jim Rogers: We’re Wiping out the Savings Class Globally, to Terrible Consequence

by Adam Taggart

Jim Rogers decries the growing uncertainty and recklessness of global central planners as the world enters unchartered financial markets:

For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.

Jim Rogers: We’re Wiping out the Savings Class Globally, to Terrible Consequence

by Adam Taggart

Jim Rogers decries the growing uncertainty and recklessness of global central planners as the world enters unchartered financial markets:

For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.

Warning: Stocks Likely to Crater from Here

by Chris Martenson

I don't relish the job of constantly pointing out the risks to the equity markets. But since few on Wall Street seem willing (or able) to do this, I'm "making the call" for a market correction, as enough variables have aligned to indicate a high likelihood of stocks heading downwards from here.

I've only given one other such warning about equities before, and that was in March of 2008, when I warned of the possibility of a 40% to 60% decline in stock prices by Fall. I am making a similar call today, with the understanding that I am usually a bit early to the game with my views.

Warning: Stocks Likely to Crater from Here

by Chris Martenson

How the Market Failure Will Happen

PREVIEW

by Chris Martenson

Executive Summary

The central-planning Status Quo will fight to the bitter end in order to keep stock and housing prices elevated
HFT algorithms dramatically increase the odds of immediate "air pockets" in stock prices
Persistently high gasoline prices are choking economic growth
A parade of economic headwinds (weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, chronic unemployment) are blowing increasingly stronger
Powerful TBTF ("too-big-to-fail') interests are likely supporting the Fed's current efforts to boost asset prices
Both near-term and long-term history tell us that the more asset prices are artificially increased, the farther they eventually fall, as intervention hits its point of diminishing returns
Why you don't want to be long in this market when that happens

If you have not yet read Part I: Warning: Stocks Likely to Crater from Here, available free to all readers, please click here to read it first.

Hey, Where's My Cheap Gasoline?

Expensive energy is a serious drag on economic growth. It always has been and always will be, for obvious reasons.

The average person can be forgiven for being confused by the recent spike in gasoline prices. Since early 2012, there has been a concerted effort to tell the tale that the U.S. is producing more oil than it has in a long time and is on track to rival Saudi Arabia.

Literally hundreds of articles have breathlessly repeated the same information over and over again, like all good marketing programs should. But here in 2013, gasoline is on track to set price records and possibly make this year the most expensive one in history for gas prices:

How can this be? What is going on? How do we reconcile all the reports of record-breaking advances in U.S. oil production with these concurrent record-high gasoline prices?

The answer starts with the fact that the U.S. still imports 40% of its daily oil supply and is nowhere near energy independence when it comes to petroleum. This means that the U.S. remains wedded to the world price of oil, which remains quite elevated in price – with Brent crude remaining stubbornly elevated between $110 and $120 a barrel over the majority of the past year…

How the Market Failure Will Happen

PREVIEW by Chris Martenson

Executive Summary

The central-planning Status Quo will fight to the bitter end in order to keep stock and housing prices elevated
HFT algorithms dramatically increase the odds of immediate "air pockets" in stock prices
Persistently high gasoline prices are choking economic growth
A parade of economic headwinds (weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, chronic unemployment) are blowing increasingly stronger
Powerful TBTF ("too-big-to-fail') interests are likely supporting the Fed's current efforts to boost asset prices
Both near-term and long-term history tell us that the more asset prices are artificially increased, the farther they eventually fall, as intervention hits its point of diminishing returns
Why you don't want to be long in this market when that happens

If you have not yet read Part I: Warning: Stocks Likely to Crater from Here, available free to all readers, please click here to read it first.

Hey, Where's My Cheap Gasoline?

Expensive energy is a serious drag on economic growth. It always has been and always will be, for obvious reasons.

How can this be? What is going on? How do we reconcile all the reports of record-breaking advances in U.S. oil production with these concurrent record-high gasoline prices?

Time to Choose

by Adam Taggart

Whether you’re aware of it or not, a great battle is being waged around us.

It is a war of two opposing narratives: the future of our economy and our standard of living.

The dominant story, championed by flotillas of press releases and parading talking heads, tells an inspiring tale of recovery and return to growth.

The other side, less visible but with a full armament of high-caliber data, tells a very different story. One of growing instability, downside risk, and inequality.

As different as they are in substance, they both share one fundamental prediction – and this is why you should care: This battle is about to break. And when it does, one side will turn out to be much more ‘right’ than the other. The time for action has arrived. To position yourself in the direction of the break you think is most likely to happen.

It’s time to choose a side.

Time to Choose

by Adam Taggart

Whether you’re aware of it or not, a great battle is being waged around us.

It is a war of two opposing narratives: the future of our economy and our standard of living.

The dominant story, championed by flotillas of press releases and parading talking heads, tells an inspiring tale of recovery and return to growth.

The other side, less visible but with a full armament of high-caliber data, tells a very different story. One of growing instability, downside risk, and inequality.

It’s time to choose a side.

James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices

by Adam Taggart

My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.

So predicts James Turk, founder and Chairman of GoldMoney.com.

From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.

But money, like investments, can be overvalued or undervalued. And what we’re witnessing on the world stage is a gross mispricing of money as central banks engage in depreciation of their fiat currencies via inflation (i.e., money printing).

The process causes a transfer of wealth from those holding overvalued money to those who hold undervalued money. That’s what’s been going on for the past decade as the price of gold has steadily marched upwards versus fiat currencies.

But this process is not efficient. Mass awareness of this wealth transfer is low, so confidence in paper currencies is still high, supporting their perceived value. Market intervention by central banks and other parties conspires to keep the prices of precious metals artificially low and suspect.

This maintains an arbitrage for individuals to buy gold and silver at a discount to true value, which James believes will be slowly realized in full over the next several years as the bull market in precious metals approaches its third and final phase.

A factor in this rise will be the increasing fragmentation of coordination among the central banks. Increasingly, central banks outside the influence of the U.S. Federal Reserve are treating the precious metals as true money, and becoming net buyers of bullion for their reserves.

Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz and that we'll see even higher price appreciation in silver.

James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices

by Adam Taggart

My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.

So predicts James Turk, founder and Chairman of GoldMoney.com.

From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.

Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz and that we'll see even higher price appreciation in silver.

They’re Not Even Trying to Hide It Anymore

PREVIEW

by Chris Martenson

When asked why I think that the price of gold is manipulated to keep its price within an acceptable band to central planners, I will respond with the quip 'because they can.'

It's really very simple. If we know that the Fed is extremely concerned about the health of the financial markets and maintaining confidence in them and the major institutions, and it has already stepped way over the line by targeting the price of money, bonds, and equities, it's pretty much a guarantee that the Fed has got its eyes on and hands in everything.

They’re Not Even Trying to Hide It Anymore

PREVIEW by Chris Martenson

When asked why I think that the price of gold is manipulated to keep its price within an acceptable band to central planners, I will respond with the quip 'because they can.'

The Trends to Watch in 2013

by charleshughsmith

Rather than attempt to predict the unpredictable – that is, specific events and price levels – let’s look instead for key dynamics that will play out over the next two to three years. Though the specific timelines of crises are inherently unpredictable, it is still useful to understand the eventual consequences of influential trends.

In other words: policies that appear to have been successful for the past four years may continue to appear successful for a year or two longer. But that very success comes at a steep, and as yet unpaid, price in suppressed systemic risk, cost, and consequence.