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If the Economy is Strong, Why Are These Assets In Full Blown Bear Markets?
We are often told that the global economy is strong… that fears of a contraction are overblown… that China is still an engine for economic growth… and that the US has detached from the turbulence in the Emerging Market space.
If the above claims are true, then economically sensitive assets should be rallying as global demand propels them to higher prices.
But they’re not.
In fact, they ENDED their bull markets and have erased several DECADES’ worth of gains.
Consider Coal.
In the US, Coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.
With that in mind, consider that Coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market end… but Coal has erased ALL of the bull market’s gains (the green line represents the pre-bull market low) and fallen BELOW its pre-bull market lows.

Those who believe that the global is in an economic expansion will shrug this off as the result if the US’s shift away from Coal as an energy source. The US accounts for only 15% of global Coal demand. The collapse in Coal prices goes well beyond US changes in energy policy.
What’s happening in Coal is nothing short of “price discovery” as the commodity moves to align itself with economic reality. In short, the era of “growth” pronounced by Governments and Central Banks around the world ended. The “growth” or “recovery” that followed was nothing but illusion created by fraudulent economic data points.
We get confirmation of this from Oil.
For most of the “so called” recovery, Oil gradually moved higher, creating the illusion that the world was returning to economic growth (demand was rising, hence higher prices).

That blue line could very well represent the “false floor” for the recovery I mentioned earlier. Provided Oil remained above this trendline, the illusion of growth via higher energy demand was firmly in place.
And then Oil fell nearly 60% from top to bottom in less than six months.

As was the case for Coal, Oil’s drop was nothing short of a bubble bursting. From 2009 until 2014 Oil’s price was disconnected from economic realities. Then price discovery hit resulting in a massive collapse.
Moreover, the damage to Oil was extreme. Not only did it collapse 60% in a matter of months. It actually TOOK out the trendline going back to the beginning of the bull market in 1999.

This is a classic “ending” pattern. Breaking a critical trendline (particularly one that has been in place for several decades) is one thing. Breaking it and then failing to reclaim it during the following bounce is indicative of BEAR MARKET.
In short, the era the phony recovery narrative has come unhinged. We have no entered a cycle of actual price discovery in which financial assets fall to more accurate values. This will eventually result in a stock market crash, very likely within the next 12 months.
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Why are they lying about the economic strength............BECAUSE IT IS MUCH, MUCH WORSE THAN WE EVEN IMAGINE......
Can you imagine what would happen to wages if you removed government guaranteed student loans, ended minimum wage, instituted free trade, ended unemployment insurance, stopped processing fake SSDI claims, ended all forms of welfare, made public sector collective bargaining illegal and prohibited expensive schooling requirements and licensure? Commodities, outside labor, do not have these price supports.
Writer neglects to mention that Obomit and EPA are using the coal industry as a scapegoat for emissions and is trying to shut down the industry.
On the Navajo reservation they've had a big plant for ages. EPA shut them down because it wasn't cost effective to meet the new emission restrictions.
Governor of Kentucky, first Republican for some time was elected because he promised to defend Kentucky's coal industry against the marauding EPA using the tenth amendment.
COAL is under attack by our own government and few Americans know or care about it. But they should because if the EPA (and whoever is behind them) has there way, energy costs will skyrocket in this country as we'll have to convert to more expensive energy generation.
Juicy details on Navajo plant:
http://www.azcentral.com/story/money/business/2014/07/28/epa-approves-pl...
Over supply and lower demand of oil will do it every time.
But every commodity looks like it is headed into a bear market. Why do people insist on looking just at oil is lost to me.
1oz Silver American Eagles €12 @ EurGold
https://www.eurgold.eu/silver/silver-coins/american-eagle-1oz-silver-coi...
Can't say I've ever blown a bear, so can't tell.
And when one drills down in the stock market itself, the picture is ugly too. It's not just the typical lagging sector performance we see, but the artifact of concentration of momentum chasing and PPT focus on "generals" among stocks (yeah, and their index futures buying too) that helps to goose the stock market higher.
This morning, Dave Kranzler published a fantastic article on this theme as well. ZeroHedge picks-up and publishs some of his stuff, but here's his latest before they get it.
The Silent Scream Of Crashing Stocks - Dave Kranzler
http://thenewsdoctors.com/?p=538630
The FANG's our being used to prop up the markets while the big guns are exiting the building. Follow those plays, and when the music stops, get agresively short, or buy VOL. The santa claus rally will be used to sell into this year. The front side of 2016 will be most interesting ....