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On Tuesday, it was announced that over seventeen million new vehicles were sold in 2015, the highest it’s ever been in United States history. While the media claims that this record has been reached because of drastic improvements to the US economy, they are once again failing to account for the central factor: credit expansion. The auto bubble has yet to burst, but its negative effects are already starting to gradually appear.

Some very troubling charts for the stock bulls to consider.

Maybe because not enough people caught the dire warning the first time, moments ago Bloomberg reported that Han Jun, the deputy director of China’s office of the central leading group for financial and economic afairs, spoke at an event at the Chinese consulate in New York and practically reiterated the anonymous source's warning practically verbatim. To wit: "There won’t be a strong economic stimulus and people shouldn’t expect a V-shape recovery; instead long period of L-shape growth path is likely" said Han, who participated in the drafting of China’s latest five year plan.

"Panic is building, most likely setting the stage for a rally, but the missing ingredient here is growth. With analysts cutting estimates at an accelerating rate, increasing China risks and no apparent floor for oil prices, we remain cautious on our near term outlook for stocks."

Well that escalated quickly...

The momentous momentum stocks appear to have crashed into the reality of extreme valuations in a no-growth, carry-trade-unwind environment. It's not pretty out there...

When Americans speak of “the big one,” they’re talking about the potential for a super-massive earthquake that could essentially destroy most of quake-prone California. Now some scientists believe something similar could happen in the once geologically placid Oklahoma.

Down over 5%, Russia's RTS Index has plunged to its weakest level since Dec 2014 and the peak of its existential crisis mid-Ukraine/currency-crisis/oil-collapse. This is Russia's biggest one-day drop since April 2015. The Ruble continues to tumble (despite CNH strength) as oil pushes to new cycle lows...

Another algo-induced stop-run has tried and failed to maintain its gains this morning as Morgan Stanley becomes the latest (after Goldman) to join the "oil in the $20s is possible" bandwagon. Despite hopeful bullishness from Andy Hall who sees production destruction leading (an industry that couldn’t function at $50 certainly can't function with prices below $40) inevityably leading to higher prices, Morgan Stanley warns, "in an oversupplied market, there is no intrinsic value for crude oil. The only guide posts are that the ceiling is set by producer hedging while the floor is set by investor and consumer appetite to buy. As a result, non-fundamental factors, such as the USD, are arguably more important price drivers."

"Our view is that the risk-reward for equities has worsened materially. Yes, stocks had a rough time most recently, and some of the tactical indicators, such as Bull-Bear at -16 which is at the bottom of its trading range, argue for a short-term respite. Clearly, equities are unlikely to keep falling in a straight line, with periodic rebounds likely. However, we believe that one should be using any bounces as selling opportunities."

The following three charts make last week’s market turmoil easier to understand. Falling trade means lower corporate profits, which, if history is still a valid guide, means less valuable equities. So it could be that the markets are simply figuring this out and revaluing assets accordingly.

Many price-battered precious metals investors may currently be sitting on some quantity of capital that they plan to convert into gold and silver, but they are wondering when “the best time” is to do so.

"Shorter-term traders will feel that many moves have gone a long way very quickly and hence appear ripe for a brief rebound. The catalyst is that, in the height of a market panic, prices can become dislocated from fundamental valuations, as margin stops get triggered and “weaker” positions get cleaned out. The counter-argument is that distortions caused by the extraordinary monetary policies of global central banks mean markets might have been disconnected from traditional fundamentals for several years."