I"ve been looking for triggers that will kick start the next World Finacial Crisis (make people to panic or realize that we have a huge debt problem)
But I feel governments around the world are trying to contain it.
In the United States, makes me nervous when Larry Kudlow and Steven Mnuchin come out to reassure people of no Recession is coming. Larry Kudlow said the same things in the middle of THE GREAT RECESSION. Also Steven Mnuchins meeting week before Christmas with the 6 largest US banks to assure them that the Economy is good (plunge protection team at work) Hard to hear the truth. Latest Economic Data is horrible but the Stocks still inching higher. I guess Markets like to Trap, Fool and Frustrate everyone. Right now we are long the Market vs short, (equals Sep 2018, Dec 2017) At least shorted since 2007.
Triggers:
1: Countries started to go Bankrupt: Greece, Venezuela, Turkey, Italy. That seems doesn't bother anyone for now
2: Banks to go Bankrupt: Greek and Italian banks. Largest derivative monster Deutsche bank is bankrupt but its contained by ECB and it's in the middle of a merger. The Chinese and Asian banks are locally contained (reserve requirements lowered) No one seems bothered.
3: Bond Bubble to Burst, but current Market sell-off helped the Bond Market in the Short term. Most so-called experts are not expecting higher rates to come and destroy the Bond Market. No one seems to bother about the large supply of treasuries to hit Markets right about now.
All of the above seems to only bother the French (I guess French pay more attention). So my conclusion is that it has to be the Stock Market Crash will start it. It will be exacerbated by Margin Bubble Bursting. I'm sure that will wake everyone up. And I still believe this is Bear Market Rally(5%+ single day gains only happen in a Bear Markets) The Margin Leverage Ratio for Institutions is 5/1. If we get a 5% correction assuming they bought last Friday their losses can equal to 25%. Margin Call is coming and Liquidity won't be there to pick it up until 30-50% drop.
I can't believe S&P 500 and DJI got to Dot.com bubble level. It's all thanks to FEDERAL RESERVE 0% policy and QE1,2,3. By the way, negative interest rate and QE 4 is a possible scenario. If you hear that run and buy gold and gold miners(you should be buying them now).
Bellow links to Margin Debt vs S&P500. Also, a link to a chart showing negative Credit Balance of Investors. These levels are unsustainable as interest rates go higher (federal reserve 2-2.25% is already too high).
www.advisorperspecti...d9367b9a603ff584.png
www.advisorperspecti...326233b57214f0cc.png
But I feel governments around the world are trying to contain it.
In the United States, makes me nervous when Larry Kudlow and Steven Mnuchin come out to reassure people of no Recession is coming. Larry Kudlow said the same things in the middle of THE GREAT RECESSION. Also Steven Mnuchins meeting week before Christmas with the 6 largest US banks to assure them that the Economy is good (plunge protection team at work) Hard to hear the truth. Latest Economic Data is horrible but the Stocks still inching higher. I guess Markets like to Trap, Fool and Frustrate everyone. Right now we are long the Market vs short, (equals Sep 2018, Dec 2017) At least shorted since 2007.
Triggers:
1: Countries started to go Bankrupt: Greece, Venezuela, Turkey, Italy. That seems doesn't bother anyone for now
2: Banks to go Bankrupt: Greek and Italian banks. Largest derivative monster Deutsche bank is bankrupt but its contained by ECB and it's in the middle of a merger. The Chinese and Asian banks are locally contained (reserve requirements lowered) No one seems bothered.
3: Bond Bubble to Burst, but current Market sell-off helped the Bond Market in the Short term. Most so-called experts are not expecting higher rates to come and destroy the Bond Market. No one seems to bother about the large supply of treasuries to hit Markets right about now.
All of the above seems to only bother the French (I guess French pay more attention). So my conclusion is that it has to be the Stock Market Crash will start it. It will be exacerbated by Margin Bubble Bursting. I'm sure that will wake everyone up. And I still believe this is Bear Market Rally(5%+ single day gains only happen in a Bear Markets) The Margin Leverage Ratio for Institutions is 5/1. If we get a 5% correction assuming they bought last Friday their losses can equal to 25%. Margin Call is coming and Liquidity won't be there to pick it up until 30-50% drop.
I can't believe S&P 500 and DJI got to Dot.com bubble level. It's all thanks to FEDERAL RESERVE 0% policy and QE1,2,3. By the way, negative interest rate and QE 4 is a possible scenario. If you hear that run and buy gold and gold miners(you should be buying them now).
Bellow links to Margin Debt vs S&P500. Also, a link to a chart showing negative Credit Balance of Investors. These levels are unsustainable as interest rates go higher (federal reserve 2-2.25% is already too high).
www.advisorperspecti...d9367b9a603ff584.png
www.advisorperspecti...326233b57214f0cc.png
