Are We Witnessing The Weirdest Moment In Economic History?

Via Brandon Smith of,

It is an unfortunate reality that most people tend to be oblivious to massive sea changes in geopolitics and economics. You would think that these events would catch the immediate attention of everyone as they happen, but usually it is not until they realize that the microcosm of their personal lives is subject to the consequences of the macrocosm that they wake up and take notice.

There are, however, ways to train yourself to pick up on signals within the news cycle and within political and financial rhetoric; signals that indicate a great shift is perhaps on the way. Sometimes these initial signs are subtle, sometimes they are as subtle as a feminist slut-walk. I would point out that over the next few months there are dangerous correlations so numerous and blatant in the economic sphere that I would almost rather watch a marching gaggle of frumpy feminists wearing nothing but electrical tape than bear witness to the mayhem that is about to strike the unwitting public.

What am I talking about? Well, let’s go through the list…

Federal Reserve Meeting March 14-15th

As my readers know well, I have been warning since before the election that the Fed would use a Trump presidency as an opportunity to pull the plug on near-zero interest rates and remove a primary pillar supporting stock markets — stock buybacks made possible by free overnight loans to numerous banks and corporations. Without QE and low interest rates the equities bubble will inevitably implode.


Corporate earnings certainly aren’t holding up stocks, neither is GDP or consumer spending. The Fed is the only determining factor of the ongoing bull market. Anyone who claims otherwise is probably a mainstream analyst or overzealous day trader with a vested interest in keeping the illusion going.


It is not surprising to me at all that the “rate hike odds” for March have been increased by mainstream analysts to 90% in the span of a week. I don’t know why anyone uses these arbitrary odds as an indicator of anything. I’ve been receiving emails all month asking me if I still believe the Fed will hike rates while the odds are “so low.” Look, the Fed does not make decisions at these meetings. They make decisions months in advance and the meetings are window dressing.


Too many people operate under the delusion that the central bank wants to continue propping up stocks, which is why they cannot grasp why the Fed would raise rates. In reality, the stage has been perfectly set to allow the bubble to implode. When the elites have a perfect scapegoat, they use it, and conservative movements represent that perfect scapegoat today.

The important thing to remember, though, is the timing of this particular meeting…


U.S. Debt-Ceiling Suspension Ends March 15th

So, in case you weren’t tracking the economic situation two years ago, the U.S. government almost went bust (in a sense) in 2015. The debt ceiling sets limits on how much the government can borrow to fund itself, and that limit was hit hard under the Obama administration after he managed to nearly double the national debt during his tenure. Congress passed legislation to allow borrowing to continue until March 2017, and of course, much of that capital was “borrowed” from the Federal Reserve, which, of course, creates it out of thin air. With the return of the debt ceiling, the question is — will Congress be able to extend and delay again? With Trump running on a platform of fiscal responsibility, CAN they extend again?  Do they even want to, or is this an engineered crisis event?


Once again, the timing of all this is a little odd. The Fed is raising rates into the first year of the Trump presidency leaving equities increasingly open to destabilization. In addition, the government might not be able to continue borrowing from them, or there will be a renewed extension but the costs of borrowing will run much higher. In either case, this month seems to pronounce the beginning of something; a considerable move away from the standard operating procedures that the elites have been using for the past several years. With such changes come consequences, always.


Formal Initiation Of Brexit On March 15th

The skeptics have been telling me for months that even though I was right about the Brexit vote victory the elites “would never allow” the British to leave the EU. Well, it doesn’t look that way to me so far. Theresa May plans to formally notify the EU of British exit on March 15th triggering two years of negotiations which will undoubtedly send economic shock waves throughout the globe on a regular basis.


Of course the Brexit will move forward! Why not? Globalists need a continuing atmosphere of crisis to distract the masses from their great global reset, and they need multiple scapegoats for the economic disaster that their reset will cause. Enter conservative movements in Europe; once again the perfect target to pin a crisis on.


French Elections Start April 23rd, End May 7th

Yet another election in which the EU hangs in the balance. Recent polls indicate that Marine Le Pen, the designated “populist" candidate, is falling behind. I have to ask, though, have we not learned our lesson yet on the meaninglessness of political polls? I think most of us have.


I believe Le Pen will be one of the final two candidates to move on to the election in May, and though I am not as certain as I was on Brexit and Trump, I am going to go ahead and predict a Le Pen win. If there is any sizable terrorist event in the next couple of months in the EU, or expanded Muslim riots, she is a guaranteed win. This brings up the very real prospect of a “Frexit” in the near future, and analysts should expect that a Le Pen win will be met with some panic in the financial world.


Potential Italian Election Move On April 30th

The Italian political process is a little confusing to me, but what I can tell you is that this spring or early summer you will probably be hearing a lot more about it. Former Italian prime minister and current Italian Democratic Party leader Matteo Renzi is set to decide on a the date for a leadership vote, which may come as early as April 30th. The outcome of this vote will likely decide how soon the next official Italian election will take place.


The election is required to be held before May 2018, but there is increasing pressure to hold elections in 2017, perhaps even this coming summer. I would not be at all shocked to see a surprise announcement of an early Italian election after the leadership vote is held.


Why should anyone care? The consensus is that Renzi’s party will be overrun by anti-EU factions and that this may result in a kind of “Italiexit.” The outcome of Italy’s series of votes and political restructuring will have wide reaching effects on the psychology of the markets for many months to come.


German Federal Election Held September 24th

Yes, even Germany is quaking this year in the wake of a potential “populist” tsunami. Angela Merkel is exceedingly unloved by her own people lately as her approval ratings collapse. Once-silent sovereignty champions in the country are becoming more and more vocal about Merkel’s rather insane open immigration policies which were the key element that drew millions of Muslims into the EU. It was the German government’s promise of endless entitlement programs that created the incentive for the mass migration in the first place, and now, finally, the German people are fed up with the complete lack of cultural assimilation and what many see as the destruction of western values.


I do not think that Germany will abandon the supranational concept of the EU regardless of the outcome of the election, but the removal of Merkel would signal a less agreeable Germany, which would exacerbate the already tottering European Union. Meaning more economic uncertainty in 2017.

If You Thought 2016 Was Weird…

If you thought 2016 was weird, I suggest you get comfortable with the surreal because it is not going away anytime soon. 2017 is a veritable treasure trove of falling elevators, and I haven’t even covered half of the issues facing the economy this year. But what about the macro-analysis?

To summarize, it seems to me that many of these events, stacked so closely together, are not coincidental in their timing. As I have noted in articles such as The Economic End Game Explained, globalists have been openly planning for decades to set in motion a vast financial overhaul and the launch of a single global economy and currency (the seeds being planted starting in 2018). If this is still their timeline, then it would follow that they would need a series of fiscal earthquakes designed to shake up the “old world order” to make way for a “new world order.”

Perhaps each of these events will result in a “stable” outcome and there is nothing to be concerned about. That said, I don’t believe in chance. Most geopolitical outcomes are influenced by internationalist players, which makes the outcomes of these events predictable. This is what made the Brexit predictable, and it is what made Trump’s victory predictable. Everything about the confluence of political and economic events in 2017 suggests to me a festering crisis atmosphere.

As I have always said, economic collapse is a process, not a singular moment in time. This process lulls the masses into complacency. You can show them warning sign after warning sign, but most of them have no concept of what a collapse is. They are waiting for a cinematic moment of revelation, a financial explosion, when really, the whole disaster is happening in slow motion right under their noses. Economies do not explode, they drown as the water rises one inch at a time.

The Seven Stages to a Bear Market for Bonds – by Michael Carino

We have just lived through the most spectacular global bull
market run for the fixed income markets.  This bull market rallied the bond market to
the lowest yields ever!  Over a third of
all global fixed income was trading with a negative yield.  The most accommodative central bank policies
made heroes out of bond fund managers. Bond investors that stayed fully
invested with fingers crossed, hoping for the greater fool theory to eventually
take them out of their overvalued position were rewarded handsomely.  These bond managers are now managing hundreds
of billions in assets, have attained rock star status in the investment
community and are living the life of Riley.  After such a spectacular run that has spanned
a decade, most fixed income participants have never witnessed losses in their
bond portfolios, never mind a bear market that lasts some time and delivers a
good amount of pain.

This recent back-up in yields has left many bond investors
confused, nervous and unsure what to expect. Well, rest assured, I’m here to
assist. After 25 years managing bond portfolios and trading trillions of
dollars in the bond market, I believe I have perfected my timing model that identifies
when a bond market selloff has run its course.

This proprietary model stands out for being unique,
intuitive and void of the quantitative modeling mistakes and biases.  The model is quite qualitative,
psychologically driven and keys off the 7 stages of a bear market for bonds:

Stage 1: Shock.  You
can’t lose money in the bond market, right? 
Wrong.  Losses from the recent
bond market selloff will be staggering.  What has been significant double digit returns
over the last decade has ended.  Yields
have jumped higher and are still historically low.  Longer duration portfolios can be down over
10% in the past couple of months.  Losses
have materialized in the most liquid sectors and will eventually spread to less
liquid bonds.  Many participants are
dumbfounded, scratching various places but the itch doesn’t subside.  The market is at the end of this stage and
there’s six more stages to travel.

Stage 2: Pain and Remorse.  As bond managers and investors watch their
bond portfolio decline in real time, the losses hurts.  But the real pain starts once these managers
issue their clients statements and the bewildered clients look to the managers
for answers.  This gut wrenching pain of
disappointing investors and having a tangible negative impact on their beings
is a visceral hurt.  These managers and
investors realize they, not the markets, are the source of these losses.  There is an overwhelming feeling of guilt for
these losses and that they were not, somehow, avoided.  Should these managers have told their
investors large potential bond market losses compensated by little to no or
negative yield probably wasn’t the soundest investment? Have you ever heard a
manager say you’d be better off taking your money back? Bond yields continue to
rise with no bounces.

Stage 3: Anger and Bargaining.  Bond managers will get irate and phones will
be broken. Misplaced anger for losses that are accumulating will keep managers
and investors frozen, unwilling to cut their losses.  They start to talk about all the things they
will do if markets reverse to limit their exposures.  Too late.  Everyone is making the same bargains.  This stage sees one last parabolic rise to
higher bond yields impacting less liquid bond markets the most.

Stage 4: Depression and reflection. As losses deepen, the
market comes to the conclusion there is no bounce in bond prices.  The prior low yields reflected a mispricing in
the market brought about by exorbitant enthusiasm.  Another financial bubble to go down in the
history books.  Once confident and
jubilant managers who knew no losses are reclusive, downtrodden and distant.  Being a mortal human as opposed to a bond
managing deity is humbling.  Bond yields
still grind higher and liquidity remains poor. There is a dearth of confidence.

Stage 5: The Beginning of a New Beginning.  Depression starts to lessen and lucky shirts,
ties, socks and rocks start to come out of the drawers and closets.  The flickering thoughts of a better future
inside and outside of the financial markets begin to appear.  Could there be an end to this ugly chapter?  Bond yields are still inching higher and
liquidity remains poor.

Stage 6: Rebuilding & Reflection. New financial conferences
on what went wrong in the bond market and how to avoid it in the future pop up
globally and are fully attended.  Surviving
bond managers, albeit with much smaller assets to manage, talk about the bear
bond market and how obvious and avoidable it was.  Plans are bounced around for new strategies.
Of course, these are strategies that learns from the past.  Volatility in bond yields has now dissipated
and shallow rallies occur.

Stage 7: Acceptance and a New Beginning.  Investors and managers agree that the bond
strategies of the past were wrong and new strategies are implemented. Small
amounts of money trickle in the markets. As profits start to materialize,
confidence gets restored.  The first
managers to show profits becomes known as the new and improved bond guru du
jour.  The market has stabilized to a new
range of yields and a normal amount of volatility.  Slowly, liquidity is returning encouraged by
the beginning of positive reported earnings.  Stage 7 closes the bond market bear cycle and
begins what I am sure will be the beginning of a new (and never to outdone by
prior) bond bull market.

Bond bull market dynamics have ended and bear market
dynamics will be the norm for some time.  The over-subscribed quantitative, backwards
looking models, high volume traders and bond investors that closed their eyes
and played a fool’s game are now feeling pain and guilt.  They invested in the most overvalued market
and were caught when the market turned.  It
was like playing musical chairs and the music just stopped.  Tragically, there is a plethora of players and
only one chair left.  Investors discarded
fundamental value investing and pursued other flawed strategies for too long.
They now must experience these seven stages before they can have closure for
their missteps.

The market is just entering stage 2. The most liquid sectors
have come under intense pressure.  Less
liquid bond managers are holding their breath with their fingers on the sell
button looking for the first crack in their lofty prices.  If that button gets pressed, stage 2 will be
in full swing. So buckle up.  As we
travel down this long and windy bear market road for the bond market, it will
have many bumps and a couple pot holes.



Investment veteran and published author, Michael Carino,
prophetically called the timing and amplitude of the recent move in global bond
markets publishing “Global Bond Markets – Skydiving Without a Parachute.”  Michael has spent the last 25 years managing
fixed-income hedge funds and trading of over a trillion dollars of investments.
 He is the CEO of Greenwich Endeavors, a
financial service firm.  He feels
compelled to get his unique and under-reported views on the markets out to the
public.  It’s time a voice
contrarian to other self-interested, behemoth Investment Managers’
voices are heard.

Madame Almost President Snapchats to ‘Stand Up and Resist’, Plus Tucker vs Feminist Debate

Hillary Clinton came out looking sharp this evening — donning a devil’s red toga and new bobbed haircut — telling her fellow sisters to ‘stand up and resist’ for planned parenthood and jobs etc.

During tonight’s show with Tucker Carlson, he debated a young lady who was leading the ‘Day Without a Woman’ movement — which called for women to boycott WHITE MALE BUSINESSES ONLY. I know that sounds absurd, right? After all, if this is a women’s movement, why the fuck do chinese and black men get a pass on their boycotts? If this were a reasonable feminist movement, they’d say ‘fuck all men, equally’ (pun not intended) — instead of just the white ones. I will tell you now, this is NOT NICE! SAD!

Regarding the stats she quoted, they’re based on stats provided by the World Economic Forum, which derives a score parsing through data regarding economic participation and opportunity, educational attainment, health and survival and political empowerment. I do not pretend to be an expert on this subject matter. More importantly, I am not under the disillusionment like many of my male peers out there that America is a beacon of equality amongst races and gender. This country is fucked 10 ways ’till Sunday. Based on the stats provided by the World Economic Forum, the United States is ranked #45.

We are ranked #1 in education for females, but when it comes to political empowerment, we’re on par with shitholes like Kazakhstan, Vietnam, China and UAE.

The top 5 ranked nations are Iceland, Finland, Norway, Sweden, and Ireland. The rankings actually say Rwanda, but I’ve used my editorial powers to reject that horseshit — considering their educational attainment is ranked 110.

The bottom 5 ranked nations are islamic hell holes, naturally: Yemen, Pakistan, Syria, Saudi Arabia, and Chad.

Moral of the story? As advanced westerners, we should help spread the proliferation of women’s rights by IMPORTING REFUGEES FROM ALL OF THE WORST OFFENDING NATIONS IN THE WORLD, when it comes to women’s rights.

(drops mic)

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