These Three Economic Bellwethers Indicate Danger Lies Ahead!

Phoenix Capital Research's picture


The markets are holding up based on hope for more stimulus from the Fed and ECB this week (Fed FOMC is Tuesday and Wednesday, the ECB meeting is on Thursday).


This is a very dangerous environment. We are entering the seasonal period in which stocks typically do poorly (May-November). Earnings guidance is falling. And even the massaged GDP number for 1Q13 was lower than expected.


In simple terms, we are getting multiple signs that the economy is slowing and heading towards recessionary territory. This is happening at the precise time that stocks are holding up on hopes of more stimulus.



The rising bearish wedge pattern in the S&P 500 that we noted last week remains in play. It should be resolved this week. However, multiple economic bellweathers are already warning DANGER DANGER!


Below is a price performance chart for the S&P 500 against Fed EX (postage and shipping), Arcelor Mittal (steel), and Caterpillar (machinery). As you can see, the real economy is falling. But stocks keep holding up.



We’ve seen this kind of divergence between stocks and the economy before in 2008. We all know how that ended.


For more market commentary and investment insights, visit us at


Best Regards,


Graham Summers

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rsnoble's picture

Heading towards recession territory. LMFAO gotta love it.  So we'll lay off another 20% of the workforce.  When things stabilize for the people remaining that have jobs then the recession will be over.  Crazy ass bullshit.

dizzyfingers's picture

You're implying the economy hasn't BEEN in recession, with the unemployment rate we have? I mean the REAL uneffed-with rate...?

The Heart's picture

Well now, talk about dangerous. Ain't this special.

"As Kevin Barrett’s hugely successful Press TV article pointed out yesterday we witnessed corporate media suggesting a major domestic terror attack might have been done by our own security people. Military Intelligence agrees."

Boston Bombing – DHS Contracted Security out to Israelis:

Now we know. And so many pictures and movies made of this too. When the bomb blast happened and this flag waved over the freshly created drill, everybody knew it was God showing the world who was responsible for this kind of stuff. What was funny to see, was how every media outlet and even people like Alex Jones covered up this flag, of all flags.

And how about those guys from CST?

Bleeding and bombed, what is so funny?

Exile on Mainstreet's picture

walkin' down mainstreet

gettin' to know the concrete

lookin' for a purpose

from a neon sign...

Gold Dog's picture

Graham is a one note songbird.

Wait until we see how he crows that note when, after many years of saying the same thing he is right!

I am going to open a subscription service that warns of the Sun expanding to the size of the Solar System before it collapses and becomes a red dwarf.

For even better info subscribe here;

akak's picture

Actually, the sun is expected to swell in size only to around the diameter of the earth's orbit, and when it then subsequently shrinks it will be into a white dwarf, not a red dwarf (the latter of which are, ironically, the longest-lived stars in the universe --- some of them will burn for more than one trillion years).

The Second Rule's picture

"the sun is expected to swell in size to around the diameter of the earth's orbit"

Long air conditioning and lakefront property.

The Second Rule's picture

Hopefully Suze Orman is listed on your website. If not, add her.

The Second Rule's picture

I'm sorry I wasn't listening... Michael Jackson's wrongful death trial just started.

Van Halen's picture

Please stop posting until I finish watching the latest sporting event, zombie episode, and Kim Kardashian news.

shovelhead's picture

Even better combined in one show...

Big Ass Zombie Ball.

sunny's picture

I can't be the only one who has seen DANGER DANGER DANGER announcements for the last three years.  BUT, this article is absolutely correct in inferring that we are facing a major economic collapse.  Of course, the only issue it timing.  Any decade now!


Kprime's picture

sooo soooon?


are we there yet?

Lewshine's picture


Couldn't agree with you more! DANGER DANGER...Sure! Eventually, but my June OTM PUTS will be worth zero at that exact hour - Watch!! (did I mentioned they're watching me).

Clowns on Acid's picture

It's great. In a matter of weeks since Maria showed unrehearsed shock at Alan Greensapn's comments regarding QE printing and the stock market performance (Greenspan has been sent back to his well appointed parlour), MSM and CNBC has become unrestricted cheer leaders for more QE !

Amazing how the MSM can try and bend the opinions of viweship to accept completely immoral, catrastrophic ploicy by the Fed, and presnt it like it is good for the ole USA.


are we there yet's picture

Zimbabwae citizens use the US dollar as their preferred currency for daily commerce. To them the US fiat look stable.

Mandel Bot's picture

People of Zimbabwe and other countries which suffered hyperinflation were lucky to have the dollar as a stable currency to use in the black market. When the dollar crashes, we Americans will not have an alternative currency. Showing up at the supermarket with a 1 oz gold eagle won't work well. Pre-1964 junk silver probably will work, but not enough people have it. What to do?

markar's picture

By the time the dollar crashes, someone will have the sanity to have an at least partially gold backed currency which will be universally accepted.

espirit's picture

Bullets come to mind.

Got Ammo?

Tinky's picture

Of course a "blowout" is coming. The increasing desparation on the part of the managers of the world's major economies is palpable. When the next Cyprus occurs, the masses will begin to recognize that banks are, contrary to long-held beliefs, not safe. When pensions and the likes of 401ks are confiscated, the same type of siesmic change will occur.

The recent artificial smackdown of gold was another sign of desparation, and as things continue to deteriorate, more and worse mistakes will be made. Those currently in charge have already lost control, and are now simply attempting to keep the balls in the air as long as possible.

There is no clever, technical solution to unwind the greatest debt bubble in world history in a controlled manner. All that's left are the questions of when and precisely how the system will come crashing down.

Lewshine's picture

Tinky, God I hope you are right. I loaded up on Gold and Silver on the pullback 1385/22.90....But then I got cocky and through 10K in OTM JUNE PUTS prior to thi last parbolic move. I addedd to the puts today at pennies on the dollar - Let the collapse begin...Please!

NOTfromSanFrancisco's picture

Does anyone have a chart showing U.S. industrial electrical consumption and actual tonnage of goods and freight delivered by trucks and rail to compare with these charts shown above?...

are we there yet's picture

The Baltic dry index is a good index that is not falsified by the FED etc.

LongSilverJohn's picture

Okay, I am fully hedged but a question keeps nagging me.

Devils advocate: why can't the fed just issue enough new cash to buy all the toxic assets off the banks' balance sheets. Banks keep cash in excess reserves and don't loan it into economy.

Feds balance sheet balloons, but so what. Thats an inside deal. Problem solved?? Or if not, then how does the money leak out into inflation??

Also, if central banks on occasion buy others' currencies, would this not stabilize relative exchange values to prevent dollar dump?

And if they use futures to short PM, then doesn't that keep game going indefinitely? I know a blowout is coming but would enjoy some views on mechanics....

are we there yet's picture

Because reality always .... always .... catches us with magic accounting. Someone or some group of people somewere always looses buying power, assests in the present or future, or a tax burden from magic accounting ...... always. 

OneTinSoldier66's picture

You can fool some of the people some of the time, but you can't fool all of the people all of the time.

ronaldawg's picture

Also because of human nature.  With the toxic assets removed, the banks will create more toxic assets. 

I believe this is called moral hazard.

Rinse and repeat until it takes a wheelbarrow of money to buy a loaf of bread.

Aaron Burr's picture

Oh yeah... Well said Dawg. The ruling class elitist asshats (of both stripes) and their Klepto-Korperate puppetmasters have teamed up with the entitlement masses to PLUNDER whats left of this economy. Like modern corporate leadership in kahoots with their union counterparts suck a company dry (think GM and Hostess, etc.) the banksters fulfill their primary mandate of making sure they have and get to keep a million times more shit than everyone else (and if the parasite kills the host? Fuck them). Since the bank bail-outs the primary reason for the crisis (bullshit insurance --CDS etc.-- on bullshit financial products --CDO's etc.) have fucking tripled instead of being reigned in. But no worries--the academics say we are fine--I'm so fucking relieved.

dontgoforit's picture

Not to mention those on the 'inside' are milking this thing - all that money is going somewhere; some of it is going into the pockets of those in the know.

espirit's picture

The banksters and the politicians have most of the outcomes figured to provide incomes for themselves.

Only when the sheeple get hungry enough to open their eyes...

stiler's picture

Most corrupt to date, but not to be the most corrupt ever. That economy is coming to the ME, not here. Read all about it in Revelation 18. America somehow is not mentioned in the scriptures and I do not wonder why. We aren't returning to the good ol' days ever. The behavior of WS is typical corruption of a falling civilization: the sun is setting on the west. The invisible hand always oversees the economy, even a centrally planned one.

Umh's picture

God didn't know America was here?

tango's picture

LOL    I never get a response when I ask why ever "prophecy" in the Bible applied to those times and those people except these that applied to a place no one knew existed.  (ANSWER:  "Faith"...oh well)

Welder's picture

I doubt that Europeans didn't know about the existence of another continent prior to Columbus.

dontgoforit's picture

This particular apocalyptic writing was about the Roman Empire - but, as we have seen, history repeats itself and America seems to be the modern equivalent of the Roman Empire.

MassDecep's picture

Rev 18:1 - And after these things I saw another angel come down from heaven, having great power; and the earth was lightened with his glory.
Rev 18:2 - And he cried mightily with a strong voice, saying, Babylon the great is fallen, is fallen, and is become the habitation of devils, and the hold of every foul spirit, and a cage of every unclean and hateful bird.
Rev 18:3 - For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies.
Rev 18:4  - And I heard another voice from heaven, saying, Come out of her, my people, that ye be not partakers of her sins, and that ye receive not of her plagues.
Rev 18:5 - For her sins have reached unto heaven, and God hath remembered her iniquities.
Rev 18:6 - Reward her even as she rewarded you, and double unto her double according to her works: in the cup which she hath filled fill to her double.
Rev 18:7 - How much she hath glorified herself, and lived deliciously, so much torment and sorrow give her: for she saith in her heart, I sit a queen, and am no widow, and shall see no sorrow.
Rev 18:8 - Therefore shall her plagues come in one day, death, and mourning, and famine; and she shall be utterly burned with fire: for strong [is] the Lord God who judgeth her.
Rev 18:9 - And the kings of the earth, who have committed fornication and lived deliciously with her, shall bewail her, and lament for her, when they shall see the smoke of her burning,

Rev 18:10  - Standing afar off for the fear of her torment, saying, Alas, alas, that great city Babylon, that mighty city! for in one hour is thy judgment come.
Rev 18:11  - And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more:
Rev 18:12  - The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble,
Rev 18:13  - And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.
Rev 18:14  - And the fruits that thy soul lusted after are departed from thee, and all things which were dainty and goodly are departed from thee, and thou shalt find them no more at all.
Rev 18:15 - The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing,
Rev 18:16  - And saying, Alas, alas, that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls!
Rev 18:17  - For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,

Rev 18:18 - And cried when they saw the smoke of her burning, saying, What [city is] like unto this great city!
Rev 18:19 - And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas, that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate.
Rev 18:20  - Rejoice over her, [thou] heaven, and [ye] holy apostles and prophets; for God hath avenged you on her.
Rev 18:21 - And a mighty angel took up a stone like a great millstone, and cast [it] into the sea, saying, Thus with violence shall that great city Babylon be thrown down, and shall be found no more at all.
Rev 18:22  - And the voice of harpers, and musicians, and of pipers, and trumpeters, shall be heard no more at all in thee; and no craftsman, of whatsoever craft [he be], shall be found any more in thee; and the sound of a millstone shall be heard no more at all in thee;
Rev 18:23  - And the light of a candle shall shine no more at all in thee; and the voice of the bridegroom and of the bride shall be heard no more at all in thee: for thy merchants were the great men of the earth; for by thy sorceries were all nations deceived.
Rev 18:24  - And in her was found the blood of prophets, and of saints, and of all that were slain upon the earth.

Savyindallas's picture

Damn  -that John Lennon was smart. I  never realized how good a lyricist he was.  No wonder the damned Banksters killed him.

algol_dog's picture

Great ... Bible study on ZH. Man you guys are getting desperate. I hope for all of you, that there will be at least a little correction in the future, so as to keep you guys from going completely off the deep end ...


akak's picture

Personally, I am deeply offended by ANY religious twaddle here that does not conform to and acknowledge the one TRUE religion, The Pastafarian Church, and the one TRUE god, The Holy Flying Spaghetti Monster (may you be blessed by the touch of His Divine Noodly Appendage),

Savyindallas's picture

Actually Pastafarianism was created by the Jesuits. Don't trust a damn one of them. They secretly belive in Vununupsychoastrianism. A very dangerous sect indeed. 

espirit's picture

Rastafarianism, created by the Jamaicans.

I prefer 2:Timothy - The Dangers of the Last Days.

uncle_vito's picture

That was befoe QE.

WSP's picture

The assertion Graham Summers makes with all of his articles as well as most other bearish outlooks is that we operate in a market driven economy----WE DO NOT.  The market is "controlled" and has been for quite some time.  The criminals that are in control of the market move it up and down based their strategic needs-----charts, earnings, multiples, etc., ARE ALL MEANINGLESS and are only used as "props" and "distractiions" by Shysters to deceive and profit from the ignorance of others.  In the end, all statistics, charts, and financial measurements are meaningless in a centrally planned banana repulik.

The bottom line is we live in the most corrupt financial system in the history of mankind.  The reason it is the "most corrupt" is because never before in history have the criminals (central planners) had so many tools at their disposal to lie, cheat, redistribute, and manipulate markets in the direction they want.

One could argue that the markets will fall to fair value when everyone just shuts their feeds off and goes home---BUT, even then the criminals would still jack the markets so that their mockingbird useful idiots in the media could pump it.   The bottom line is it matters not what the market participants "think" in this criminal, centrally planned economy.  The only thing that determines prices is the central planners (a.k.a the thug bankers, federal reserve) and anyone that believes otherwise is a fool.

The only way to win in a rigged game is "not to play".