Real Estate

Negative Interest Rates Put World on Course for Biggest Mass Default in History

Posted by Jeremy Warner - Telegraph

on Monday, 4 May 2015 12:09

eurozone 3023810bMore than €2 trillion-worth of eurozone government bonds trade on a negative interest rate. It’s a bubble that is bound to end badly

Here’s an astonishing statistic; more than 30pc of all government debt in the eurozone – around €2 trillion of securities in total – is trading on a negative interest rate. 

With the advent of European Central Bank quantitative easing, what began four months ago when 10-year Swiss yields turned negative for the first time has snowballed into a veritable avalanche of negative rates across European government bond markets. In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them.

….read more HERE

 

Why Investors Should Be Terrified, In One Chart

Posted by John Rubino - DollarCollapse.com

on Monday, 4 May 2015 12:04

Advisor Perspectives’ Doug Short recently published an update on margin debt, accompanied by several well-made charts. But it only takes one to make the point. 

See below for the relationship between margin debt — money borrowed by retail investors against their stocks and used to buy more stock — where Short has enhanced the visual impact by inverting the margin debt line. As presented here, a downward sloping red line means margin debt is increasing. So when the two lines diverge, that means stock prices and margin debt are both rising. 

The gap between them is thus a measure of the divergence between investor expectations and market reality. Note two things: 1) When the gap grows too large, the lines tend to converge via falling stock prices and shrinking margin debt (usually through involuntary liquidation of leveraged stock portfolios). And 2) Today the gap is wider than it’s ever been. If history is a valid guide, the two lines will shortly cross somewhere around 1,000 on the S&P, or about 50% lower than current levels.

Margin-debt-2015

 

 

Gold Market Update

Posted by Clive Maund

on Monday, 4 May 2015 11:59

Starting with the 8-year chart for gold we can see that there remains some risk of it gravitating towards the strong support in the $1000 area before the big corrective phase is over. However, with the dollar breaking down that risk is easing, and the chances of an upside breakout from the downtrend are improving. Within the big downtrend channel from the highs we can see a much less steep channel which the price has been stuck in for almost 2 years. This channel is showing some convergence, which is a positive sign. Watch for a breakout from both of these channels which would signal the birth of a major new uptrend, but until that happens there is some risk of a further drop to the strong support in the $1000 area. A point worth keeping in mind is that gold of course looks a lot better when charted against most other currencies

gold8year040515

….read more HERE

Long Bond: An Historic Trading Opportunity

Posted by Dan Norcini

on Monday, 4 May 2015 11:53

This past week saw a huge swing in interest rates at the long end of the curve with the long bond in particular getting knocked for a loop.

Chart20150502072744

As you can see from the chart, prices plunged lower Tuesday-Friday with support being broken on Tuesday. The market had an intraday recovery that day but the next day, it commenced plunging again, this time being unable to recapture broken chart support which “reversed polarity” and served to cap the contract on the upside.

On Thursday, once the unemployment numbers were released, the bonds broke yet another layer of support ….continue reading  & view 4 more charts HERE

 

On the Brink of Massive Change in Markets – Stephen Todd

Posted by Michael Campbell Interviews Stephen Todd - Todd Market Forecast

on Sunday, 3 May 2015 19:40

King-World-News-Western-Propaganda-Gold-Silver-And-Chinas-Move-Toward-Supreme-Global-Dominance-550x400 c“I wake up in the middle of the night staring at the ceiling with my eyes as big as saucers wondering what is going to happen to our Country.” – Stephen Todd – Todd Market Forecast

Michael Campbell interviewed the remarkable Stephen Todd on Money Talks May 2nd 2015. With that statement above its probably a good idea for anyone with investments in major markets that Stephen covers to read the brief below or listen to the entire 17 minute interview HERE
 
Of all the markets Stephen covers, Stocks, Gold, Silver Copper, Oil, Currencies and Bonds, Stephen thinks that the most dangerous market in the world today is the Bond Market. 
 

BONDS

 “I am very worried about our future because we have a very proliferate Government in the US that has gone from 8 Trillion in debt to 18 Trillion in debt during the Obama administration. He has put more debt on than all of the Presidents going back to George Washington.”
 
“A lot of people are putting money into the Bond Market, thinking mistakenly in my opinion, that it is safe. there is nothing safe about it.” “There is definitely Market risk, You are making a couple of % in interest on your money but that is going to be much protection if the Bond Market drops 10 or 12 %. “We have been doing this for 30 years now and things are getting a little tougher, so it would to be surprising to me to see a Major Bear Market start.”
 
Stephen is very thankful that the Federal Reserve has quit adding to its balance sheet because “to me its just a worthless policy. Its harmful as a matter of fact. It’s been great for the 1%, but for the middle class its been terrible.” Stephen points out that since Obama has been President, the average middle class family income has dropped from $56,000 per to $51,000.
 
Given our “proliferate” Government the ability to borrow at low rates, that move in the Federal Debt “from 8 Trillion to 18 Trillion over the past 6 years is going to become a major problem when interest rates normalize, and the Government has to refinance at higher rates.”
 

CURRENCIES

“The Dollar looks like it has run it course here.” 
 
One of the major bull markets that has been raging the last 9 months is the US Dollar. Given the Dollar’s effect on virtually every transaction in the world today, Stephen makes a remarkable statement:
 
“I am going to stick my neck out and say that the Dollar has entered a Bear Market.”
 

STOCKS

We are entering very powerful seasonal tendencies as we are coming into “the bad 6 months of the Dow”. “I think we have some rough seas ahead of us.”
 
“If you go back to 1950 the good 6 months, and this is amazing, has gained a little over 17,000 points. During this time when the stock market has gone up, the bad six months has lost 83 points.”
 
The good six months goes from the last day of October to the last day of April.
 
We also have the prospect of some impending negative factors like Fed tightening and we are starting to see some negative earnings comparisons. Put all that together and “I don’t really see a lot of upside for the markets over the next six months.”
 

GOLD

Gold has been very choppy right along with the Stock Market, but think we are getting close to a significant bottom here. 
 
Over the past 3 1/2 years Gold is down 40%. In Stock Market terms that would be a very significant Bear Market, and Bear Markets do come to an end. 
 
“Of all of the problems on the horizon I see, I think Gold might have some upside.” “Not maybe as much as it had before because if interest rates are going up that will retard Gold to some degree.”
 
“I think that with the problems in the world economy and the Stock Market may make Gold a good place to be in the not to distant future.”
 

OIL

“I am very bearish on Oil. We have had a normal countertrend bounce in my opinion, but I am so impressed with this Fracking Technology. If we go into a slowing economy Worldwide, we will be using less Oil and we have a lot more ability to take it out of the ground.” 
 
“I think Oil is in a long term Bear Market.”
 
……listen to the entire 17 minute interview HERE

test-php-789