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10 Investor Warning Signs For 2016

Tyler Durden's picture




 

Submitted by Michael Pento via Contra Corner blog,

Wall Street’s proclivity to create serial equity bubbles off the back of cheap credit has once again set up the middle class for disaster. The warning signs of this next correction have now clearly manifested, but are being skillfully obfuscated and trivialized by financial institutions. Nevertheless, here are ten salient warning signs that astute investors should heed as we roll into 2016.

  1. The Baltic Dry Index, a measure of shipping rates and a barometer for worldwide commodity demand, recently fell to its lowest level since 1985. This index clearly portrays the dramatic decrease in global trade and forebodes a worldwide recession.

abc

 

2. Further validating this significant slowdown in global growth is the CRB index, which measures nineteen commodities. After a modest recovery in 2011, it has now dropped below the 2009 level—which was the nadir of the Great Recession.

def

 

3. Nominal GDP growth for the third quarter of 2015 was just 2.7%. The problem is Ms. Yellen wants to begin raising rates at a time when nominal GDP is signaling deflation and recession. The last time the Fed began a rate hike cycle was in the second quarter of 2004. Back then nominal GDP was a robust 6.6%. Furthermore, the last several times the Fed began to raise interest rates nominal GDP ranged between 5%-7%.

 

4. The Total Business Inventories to Sales Ratio shows an ominous overhang: sales are declining as inventories are increasing. This has been the hallmark of every previous recession.

ghi

 

5. The Treasury Yield curve, which measures the spread between 2 and 10 Year Notes, is narrowing. Recently, the 10-year benchmark Treasury bond saw its yield falling to a three-week low, while the yield on the Two-year note pushed up to a five-year high. This is happening because the short end of the curve is anticipating the Fed’s December hike, while the long end is concerned about slow growth and deflation.

Banks, which borrow on the short end of the curve and lend on the long end, are less incentivized to make loans when this spread narrows. This chokes off money supply growth and causes a recession.

 

6. S&P 500 Non-GAAP earnings for the third quarter were down 1%, and on a GAAP basis earnings plummeted 14%. It is clear that companies are desperate to please Wall Street and are becoming more aggressive in their classification of non-recurring items to make their numbers look better. The main point is why pay 19 times earnings on the S&P 500 when earnings growth is negative–especially when those earnings appear to be aggressively manipulated by share buy backs and through inappropriate charges.

 

7. The rising US dollar is hurting the revenue and earnings of multi-national companies. Until recently, multinational companies have enjoyed a slow and steadily declining dollar from its mid-1980’s Plaza Accord highs. This decline boosted the translated earnings of multi-national companies. As the dollar index breaks above 100 on the DXY, multinational companies, which are already struggling to make earnings from a slowing global economy, are going to have to grapple with the effects of an even more unfavorable currency translation. In the long-term, a rising US dollar is great for America. However, it in the short-term it will not only negatively affect S&P 500 earnings, but also place extreme duress on the over $9 trillion worth of debt borrowed by non-financial companies outside of the U.S.A.

!!

 

8. Recent data confirms that the US is currently in a manufacturing recession:

  • The November ISM Manufacturing Index entered into contraction for the first time in 36 months posting a reading of 48.6. This is a decline from the anemic October reading of 50.1 and marked the fifth straight month this index was in decline.
  • The Chicago purchasing manager’s index (PMI) came in at 48.7 for November signaling contraction.
  • The latest Dallas Fed Manufacturing Business Index fell to -4.9, from -12.7 in the preceding month.
  • The Empire State Manufacturing Survey came in at -10.7, a fractional increase from last month’s -11.6, signaling a decline in activity and registering close to the lowest levels since 2009.
  • The November Richmond Fed Manufacturing Index dropped 2 points to -3 from last month’s -1.

 

9. Credit Spreads are widening as investors flee corporate debt for the safety of Treasuries. The TED spread, the difference between Three-month interest rates on Eurodollar loans and on Three-month T-bills, has been on a steady rise since October of 2013; at the end of September it was at its widest since August of 2012 at the height of the European debt crisis.

 

10. The S&P 500 is at the second highest valuation in its history:

  • The Cyclically Adjusted Price-Earnings (CAPE) ratio, was19 in November, a value greater than 25 indicates that the stock market is overpriced in comparison to its earnings history. The CAPE ratio has averaged 17 going back to 1881.
  • The Q RATIO, the total price of the market divided by the replacement cost of all its companies, historically averages around .68, but is now hovering around 1.04.
  • The P/E RATIO of the S&P 500 is around 19 – above the long-term historic average of 15.
  • Total Market Cap to GDP ratio is 122, ten percentage points above the 2007 level and eighty percentage points higher than it was in 1980.
  • The Price to Sales Ratio for the S&P is 1.82. That is higher than 2007, when it was 1.52 and is at the highest since the end of 2000.
  • And finally, Advisors Perspectives chart of inflation-adjusted NYSE Margin Debt and the S&P 500 demonstrates the profoundly over-leveraged condition of the market. Margin debt in real terms is now 20% greater than it was at the peak of the dotcom bubble!

!

If those ten warning signs weren’t enough to rattle investors…this should. The Fed is threatening to do something highly unusual; to begin a rate hiking cycle when the global economy is on the brink of recession. Ms. Yellen has virtually promised to raise rates on December 16th and continue to slowly hike the cost of money throughout next year. Investors should forget about the “one and done” rate hike scenario. The truth is the Fed will be very slowly tightening monetary policy until the fragile US economy officially rolls over into a contractionary phase and the meaningless U3 unemployment rate begins to move higher.

This current economic expansion is now 78 months old, making it one of the longest in U.S. history. There have been six recessions since the modern fiat currency era began in 1971. The average of those has brought the S&P 500 down a whopping 36.5%. Given that this imminent recession will begin with the stock market flirting with all-time highs, the next stock market crash should be closer to the 2001 and 2008 debacles that saw the major averages cut in half.

Total U.S. public and private debt levels have climbed to the staggering level of 327% of GDP, which is nearly 600% of Federal tax revenue. Therefore, humongous debt levels and massive capital imbalances have set up the stock market for its third major collapse since the year 2000. Investors should proceed with extreme caution now that the warning signs have been blatantly explained.

 

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Tue, 12/15/2015 - 10:17 | 6925402 buzzsaw99
buzzsaw99's picture

i think this is the same headline as the last five years running

Tue, 12/15/2015 - 10:25 | 6925425 herkomilchen
herkomilchen's picture

Valid point, but in the article's defense, the data supporting the headline has gotten stronger.

Tue, 12/15/2015 - 13:02 | 6926243 Barrack Chavez
Barrack Chavez's picture

First we were told to read their lips.

Then we were told el-presidente didn't have sex with his intern

Then we learned WMDs were a slam dunk, ergo we had to go to war with a country completely unrelated to the stated problem.

And now we suffered 7 long years of a black Richard Nixon, who used the IRS to go after his enemies, had a tax cheat as his first Trsy Secretary, lied about health care, lied about Libya, lied about YouTube, and drew red lines all over Syria and Ukraine before trying unsuccessfully to pick a fight with China.

Washington DC has waved the white flag on the war on drugs - they are "legalizing" drugs long after the fact. The War on Poverty has gone even worse, with Food Stamp usage at all time highs (even in an economic recovery). The country cannot defend its own borders, they pretty much gave up on that.

And the war on terror? How many days passed between Obama declaring "Mission Accomplished" and the Boston marathon bombing? Then they declared victory a second time, and terrorists shot up San Bernadino CA. yeah, the war on terror is going just great...

Looking at our financial picture: debt is at all time highs. High paying factory jobs have been replaced with burger flippers. Stocks are levitating with unsustainable PE multiples and buybacks financed with more debt. And the banking system is so weak and feeble that a mere 25bp hike could send every bank into a tailspin.

A bunch of Alzheimers patients have assembled in the Eccles building to eat 5 star lunches for two days in hopes they can come up with some way to pretend like their policies aren't epic failures.

.

The "full faith and credit of the US government" doesn't mean what it used to.

Tue, 12/15/2015 - 10:27 | 6925431 NoDebt
NoDebt's picture

You figured out the secret sauce.

Tue, 12/15/2015 - 10:37 | 6925476 TeamDepends
TeamDepends's picture

The secret sauce on the Big Mac is bull semen. This has been my little secret for years.
-Ray Kroc, 1989

Tue, 12/15/2015 - 12:28 | 6926112 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

You got your sliced tomatoes, shredded lettuce, secret sauce.

What's the secret sauce (at All-American Burger)?

Thousand Island dressing.

What's the secret sauce at Bronco Burger?

Ketchup and mayonnaise.

Gotcha.

Tue, 12/15/2015 - 10:29 | 6925446 McCormick No. 9
McCormick No. 9's picture

The headline does seem vaguely familiar. But in past iterations, QE was a given. If Yellen hikes, then this time, it WILL be different.

Tue, 12/15/2015 - 12:46 | 6926214 Barrack Chavez
Barrack Chavez's picture

You put way too much faith in economic central planners

Tue, 12/15/2015 - 15:52 | 6927065 thinkmoretalkless
thinkmoretalkless's picture

Will Lucy let Charlie kick the ball?

Tue, 12/15/2015 - 11:29 | 6925778 Angel_Eyes
Angel_Eyes's picture

Check this legitimate ways to mak? money from home, working on your own time and being your own boss... Join the many successful people who have already used the system. Only reliable internet connection needed, no prior experience neccessary, that's why where are here. Start here... www.wallstreet34.com

Tue, 12/15/2015 - 12:45 | 6926205 Barrack Chavez
Barrack Chavez's picture

After trillions in "stimulus" spending, zero interest rates to the politically connected few (most of the world corporate and consumer pay much higher rates)... The S&P500 has yet to reach its 2001 highs, adjusted for CPI.

Even with massive debt financed spending at politically decreed interest rates, even with PE multiples at the 2nd highest levels ever -- stocks have failed to keep up with CPI.

of course, not everyone invests in the S&P500. Some people put their money into hedge funds, and made HF managers a lot of money.

Tue, 12/15/2015 - 10:21 | 6925411 nmewn
nmewn's picture

No growth. Collapsing trade. Stagnant wages. Insurmountable debt. Rising interest rates.

Clearly bullish for stawks.

Tue, 12/15/2015 - 10:24 | 6925421 NoDebt
NoDebt's picture

"Where else you gonna put your money?"

Tue, 12/15/2015 - 10:27 | 6925433 nmewn
nmewn's picture

I'm on the Fone with my broker Satoshi, Wright & Gollum LLP even as we speak ;-)

Tue, 12/15/2015 - 10:45 | 6925532 TeamDepends
TeamDepends's picture

Hate to preach but nothing is safer than Kimberly-Clark, makers of Depends and toilet paper. What, are Western peoples suddenly going to stop wiping they ass?

Tue, 12/15/2015 - 10:53 | 6925573 NoDebt
NoDebt's picture

Sounds risky.  I'm sticking with my safe haven plays:  AMZN, NFLX, and FB.

Tue, 12/15/2015 - 13:32 | 6926392 nofluer
nofluer's picture

You're saying that soap and water is "just so YESTERDAY/

Tue, 12/15/2015 - 13:38 | 6926419 False_Profit
False_Profit's picture

Kimberly Clark will tank when people switch to using frn$ instead...

Tue, 12/15/2015 - 10:47 | 6925541 cpnscarlet
cpnscarlet's picture

What's one less wop in the world?

Seriously, this is the biggest G-D billboard for buying gold you can think of. "Buy gold instead of rope!"

Tue, 12/15/2015 - 10:23 | 6925419 sTls7
sTls7's picture

Expansion?  Juiced market...  wraps that up.

Tue, 12/15/2015 - 10:23 | 6925420 NoDebt
NoDebt's picture

Quibble over the others if you like, but please stop using the Baltic Dry Index.  It's completely worthless for any type of analysis.

Tue, 12/15/2015 - 10:32 | 6925455 gatorengineer
gatorengineer's picture

Why?  It reflects supply and demand for shipping goods internationally.  You are at a point where the freightlines cannot take more capacity off (to raise prices) and remain viable....

Tue, 12/15/2015 - 10:37 | 6925470 Rainman
Rainman's picture

yah ... besides, it's hard to imagine a metric moar worthless than the P/E RATIO < post-FASB 157 >

Tue, 12/15/2015 - 12:38 | 6926177 Barrack Chavez
Barrack Chavez's picture

I'll take that challenge... I give you:

Non-GAAP EBITDA

Earnings before expenses, adjusted by management paid with stock options

Tue, 12/15/2015 - 10:50 | 6925556 NoDebt
NoDebt's picture

Because it's the PRICE of shipping in a world massively over-supplied with vessels that were built largely on expected Chinese demand that never materialised.  Its decline is as predictable as commodities taking a huge hit when enough people finally woke up and realized all Chinese data is fake.  Doesn't mean less stuff is being shipped.  It means that there is less stuff being shipped RELATIVE TO UNREALISTIC GROWTH EXPECTATIONS.

Wouldn't surprise me if it fell another 30% from here even if the quantity of shipments went up 10%.

Tue, 12/15/2015 - 13:39 | 6926412 nofluer
nofluer's picture

China doesn't NEED money! It can declare Prison Made NIKEs to be money and pay expenses with that. If they need moar money, all they have to do is convict more citizens of something (anything will do) and *poof* more money makers!!!

Tue, 12/15/2015 - 14:04 | 6926539 herkomilchen
herkomilchen's picture

You just explained why the BDI is in fact a good indicator.  Yes, the drop in the price of shipping indeed says less stuff is being shipped relative to unrealistic growth expectations.

Those unrealistic growth expectations were not solely in the realm of shipping - they were also in the realms of factories, equipment, workers, etc.  Over-investment in ships mirrors over-investment in all capital goods used for production, the source of goods to fill those ships.  Artificially cheap money causes over-investmentent to produce volumes of goods for which insufficient consumer savings and demand actually exists.

The shortfall in shipping demand vs. expectations goes hand-in-hand with an impending shortfall in consumer goods demand vs. expectations.  Just slower time delay to realize it.  Container ships with debt to service will be run even below cost to operate rather than get mothballed.  Unlike goods which can be cheaply warehoused for months.  So container ship pricing immediately shows shortfalls in demand while consumer goods prices don't show that until months later - but inevitably do.

After they do, we know what follows.  Slashing of excess productive capacity meaning shuttering of factories, workers, and businesses, i.e. a recession.

Tue, 12/15/2015 - 10:25 | 6925423 wmbz
wmbz's picture

 "humongous debt levels and massive capital imbalances have set up the stock market for its third major collapse since the year 2000".

Well, you can be very sure our "humongous" debt levels are going to get far more "humongous-er"

Tue, 12/15/2015 - 10:30 | 6925450 Usurious
Usurious's picture

trav7777

 

 

''The housing bubble was a necessary artifact of an economy which had long since run out of core economicalness.  When real production doesn't generate sufficient returns, you resort to pyramiding leverage and synthetic economics.

The reality is that our debt/GDP is far worse because most of that GDP for the past 10 years was complete bullshit.  It was nominal or transaction GDP.

If you originated a ton of mortgages, you have GDP.  Then if you tranche them up with some leverage in a CDO, you have more GDP.  Sell the paper, GDP.  Retranche the tranches into a CDO^2 with more leverage, even more GDP.  Originate a CDS and tranche the payments streams, more GDP.  But this shit is all fake, it is not production.  It's just credit origination and transactional volume, not real things getting made or built.  It's a synthetic economy.''

http://www.zerohedge.com/article/why-staggering-us-debt-load-sure-preven...

Tue, 12/15/2015 - 12:35 | 6926166 Barrack Chavez
Barrack Chavez's picture

I am very sure that China and OPEC have realized Uncle Sam isn't going to repay them.

Krugman keeps writing in the NYTimes (because he is supposedly a full time professor?) that "now is not the time to repay debts" -- he has been saying now isn't the time for decades. What he means is: the US will never pay its debts.

Debtors don't make the rules, and at some point the world stops taking them seriously. The Obama regime has added more debt than every regime before it.

Will dead beats whine and cry and throw temper tantrums that they should be allowed to issue unlimited debt? Of course.

Will creditors lend unlimited to lying deadbeats at 0%? Not so obvious.

US Treasuries were mocked as "certificates of confiscation" back in the 1970s, and after 16 years of incompetence and corruption in Washington, they could easily be called that again.

Tue, 12/15/2015 - 13:48 | 6926457 nofluer
nofluer's picture

Well, you can be very sure our "humongous" debt levels are going to get far more "humongous-er"

So... what happens when it all comes down to the end Pushed to the xtreme, the Octopus/squid (a branch of la Piovra, maybe?)the crooks? end up with all the gold and a collection of highrise banks (to toss mid-level execs from?) and "deeds" to the real estate of the world and all the world's gold is belong to them? then what?

Seems to me that in extremis, the people of the world, who do not need PMs to live, just pretty much ignore the existence of their "new landlords" and get on with life. when the Big boys get POd at being ignored, they muster Guido and his buds and go out to enforce his rule, and the people get kinda tired of it all and start blowing up (or knocking down) the banks (tallest building goes first)? Or what? I mean what good is OWNING stuff and being "in charge" if your existence is pretty much irrelevant to the rest of the world?

Tue, 12/15/2015 - 10:25 | 6925424 mayhem_korner
mayhem_korner's picture

 

 

The last chart is a story unto itself.  The stock market rally is entirely a leveraged levitation illusion.  Can't be much clearer than that.

Increase the cost of the leverage and where o where could the S&P be headed?

Tue, 12/15/2015 - 10:26 | 6925427 yogibear
yogibear's picture

It's all Federal Reserve. 

They'll keep QEing (QE4) to make Wall Street and Obama happy.

Besides 2016 is an election year. They can't allow it to fail.

Fed just keeps pushing for it's banks to buy stawks.

Let's see how long the 25 bp rate hike sticks.

Tue, 12/15/2015 - 11:07 | 6925631 FreeNewEnergy
FreeNewEnergy's picture

YOGI, YOGI, YOGI, are you blind?

2016 is an election year and you say the Fed can't allow the markets to crash because of that.

Just scroll up the page and look at 2000 and 2008. Election years, market crashes.

My main thesis is that they crash the market in election years when a change is what is wanted.

2000, Clinton out, Bush in. 2008, Bush out, Obama in. 2016, Obama out, Trump in.

Well, we could just Cruz into 2017, as that might be OK, but Trump is holding the right cards (sorry, bad pun).

You may want to rethink your market strategy.

Tue, 12/15/2015 - 12:30 | 6926123 Barrack Chavez
Barrack Chavez's picture

Stop hyping the imaginary "power" of the Fed. They couldn't stop the credit bubble, they couldn't stop the implosion after, and they haven't been able to get Main Street re-started after $4 trillion and zero rates for 8 years. They can't do anything.

And before you say "stocks!", the S&P still hasn't returned to its 2001 highs adjusted for CPI (lets stick to CPI, and not get into actual higher cost of living changes). Even Goldman Sachs has admitted that stock levitation was based entirely on PE multiple expansion and debt induced stock buy-backs.

Anyone can eat 5-star lunches for two days and then max out their kids (and grandkids) credit cards. Doesn't take any skill at all.

Tie Bernanke and Yellen's compensation (and pensions) to an actual recovery. Otherwise, shut up.

Tue, 12/15/2015 - 10:27 | 6925438 Bill of Rights
Bill of Rights's picture
Harvard Law Professor: Flying Isn't a Right. Gun Ownership Is

http://www.dallasnews.com/opinion/latest-columns/20151214-noah-feldman-g...

Tue, 12/15/2015 - 10:43 | 6925511 nmewn
nmewn's picture

Speaking of that, Trey Gowdy COMPLETELY OWNED some dimwitted bureaucrat sent up to the Hill to defend "Constitutional Law Professor" Obama's connecting No-Fly lists with gun rights...I mean fucking hammered her...lol...

"Last week, Rep. Trey Gowdy (R-SC) schooled an official from the Department of Homeland Security on our Constitutionally protected right to due process.

“Let me ask you another question about the terrorism list, what process is afforded a U.S. citizen before they go on that list?” Gowdy asked.

After a brief pause, Ms. Burriesci of the Department of Homeland Security, obviously confused said, “I’m sorry, there’s not a process afforded the citizen prior to getting on the list. There is a process should someone feel they are unduly placed on the list.”

You see what she said there?...CITIZEN.

Continuing...

“My question is, can you name another Constitutional right that is chilled, until you find out it’s chilled, then you have to petition the government to get it back?” continued Gowdy."

Oh fuckin A...popcorn anyone?

“Or my favorite, the eighth amendment. We’re going to subject you to cruel and unusual punishment until you petition the government to get off the list. Is there another Constitutional right that we treat the same way for American citizens that we do the Second Amendment? Can you think of one?” Gowdy concluded."

Deer-In-The-Headlights...lmao!

Tue, 12/15/2015 - 10:29 | 6925442 madbraz
madbraz's picture

Cut the BS.  There are no "investors".  Does anyone with more than one braincell between their ears actually believes that "investors" jumped right in at 4AM on Monday and 4AM today and pushed futures higher?  Does anyone believe that any economic data point is not manipulated to fit into a previously defined plan?  does anyone believe that it is a coincidence that FMOC is always on the same week as options expirations?  does anyone believe that the NY FED does not engage in CME futures trades with their buddies as counterparts?  does anybody believe that PMI and ISM numbers are real and that it's just a coincidence that their release date has been changed to be on the first of every month?

 

call me a stupid old monkey, but these guys don't give a rats a$$ anymore if what they do every day is illegal, immoral or criminal.  no one is watching, no one will stop them, no one will ever go to jail, and they all become filthy rich while it lasts (or later when they join a hedge fund (GASP!!! pucking on myself here)  or get paid back $250k for a "speech").

 

there is nothing more fraudulent than the "market" and "investors" today.  very sad indeed.

Tue, 12/15/2015 - 10:39 | 6925485 Arnold
Arnold's picture

My pension fund and my 401k are are investors.

You burn it to the ground again and I am coming to introduce myself to all you fuckers.

I will not be presenting a business card.

--Retired Wiseguy

Tue, 12/15/2015 - 10:45 | 6925530 Peter Pan
Peter Pan's picture

I call BS on your threat because literally hundreds of millions of retirees everywhere have been mauled and not one of them has done anything worthy of an avenger.

More likely than not you will make up for the loss by taking the job of some teenager at a MacDonalds.

Other than that I agree with your sentiment and hence no down vote.

Tue, 12/15/2015 - 10:49 | 6925551 Arnold
Arnold's picture

Thanks, when logic doesn't work, hyperbole often does.

Tue, 12/15/2015 - 11:11 | 6925605 InnVestuhrr
InnVestuhrr's picture

Have you also noticed that AARP which allegedly represents the nation's retired people has said and done ZERO to force the FED to restore interest rates on savings, IRAs, 401Ks? All that HUGE AARP political power from MILLIONS of oldies contributing ZERO to fixing the problem.

The ONLY time that you see or hear ANY action from AARP is to beg and demand more freebies from Congress for their entitlement programs.

USA would be MUCH BETTER off if all these old useless parasites died immediately and made financial and economic space available for the upcoming generations.

Tue, 12/15/2015 - 11:48 | 6925890 Tall Tom
Tall Tom's picture

...literally hundreds of millions of retirees everywhere have been mauled and not one of them has done anything worthy of an avenger.

 

Now who is going to be the first to brag about breaking the law?

 

Really. You'd not hear it from me.

 

Yeah. Please send me to jail for that property destruction which I did the other day. I am stupid and I am going to publish that which I did. (end hyperbolic satire)

 

But seriously I will continue to publish that which can be easily done...like, for instance, anybody can ignite Thermite on top of Gas Meters to remove buildings...or even cars.

 

Now I am not suggesting that they actually spend just a few Bernanke Bux to take out a building worth a Half Million Bernanke Bux. But they can. Yes they can. It is actually quite simple for the motivated.

 

All wars are economic. If one can force the opponent to spend lots of currency when one will spend little then one WINS THE EXCHANGE. One can bring the opponent to a state of insolvency to where they can no longer afford to conduct warfare. That is how to win a war.

 

Will you care to call BS on this?

 

But even more damage can be inflicted by raising an army. And there are many willing, ignorant and well motivated by rage and anger, who are sitting in jail.  All one has to do is become a guest on the county for a little while. And, unwittingly, they will hand that one a well motivated and angry army to educate.

 

Sooner or later they do release these thugs.

 

And as they ignite and detonate the corner Gas Station, while all of the Law Enforcement is distracted, then they can be robbing the Banks.

 

Who needs a gun? See how powerful information is?

 

This might even make a good Action Movie Script, eh? Yeah.

 

Disgruntled by the Financial Repression, a Senior Citizen goes to jail and educates the thugs on how to pull off successful Bank jobs.

Thu, 12/17/2015 - 12:45 | 6935496 Jstanley011
Jstanley011's picture

If you've got retirement money exposed to equities this late in the game, you deserve being burned down. As a matter of fact, anybody who hasn't hedged after more than a year sideways deserves being burned down. As a matter of fact, anybody with capital exposed to the markets who doesn't know how to hedge when interest rates are raised for the first time in a decade deserves to be burned down.

Tue, 12/15/2015 - 10:40 | 6925486 yogibear
yogibear's picture

"NY FED does not engage in CME futures trades with their buddies as counterparts"

Sure do. Their the magic buying that comes out from nowhere during overnight hours, when the markets look like their going to fall.

Their trading partners are making billions off this.

Tue, 12/15/2015 - 10:42 | 6925509 kill switch
kill switch's picture

Louis Richard "Lou" Rukeyser

Wall Sreet Week with guests.

Where are they now?

Tue, 12/15/2015 - 10:54 | 6925585 InnVestuhrr
InnVestuhrr's picture

I am not disputing the points that you listed, but those of us who need income to support our families have to "invest" in something to get that income, therefore there actually are "investors" out here in the real corrupt manipulated markets trying to earn income and not lose our savings.

It is extremely difficult and time-consuming to navigate all the corruption and manipulation, but if we fail, then our families collapse into poverty, and our children and grandchildren will suffer greatly. Investing for REAL people is serious business, not a harmless game.

Tue, 12/15/2015 - 10:39 | 6925488 Peter Pan
Peter Pan's picture

The generations to come will marvel at how humanity pondered and debated the rights and wrongs of a 25 basis point interest rate increase. And if humanity is in such fear of such a small increase, then it is quite telling of this market's true strength.

But I guess it's alright to be wanting almost zero rates to persist forever as long as some miserable sod is stuck with paying multiples of that low rate on his credit card which he uses to keep afloat in a world of bullshit.

Tue, 12/15/2015 - 10:40 | 6925495 Kina
Kina's picture

Until they can burn up the massive global corporate, government and personal debt there can be no growth - just long years of recession, or the new normal, very low growth. Standard of living back a generation or two.

Tue, 12/15/2015 - 10:47 | 6925540 Peter Pan
Peter Pan's picture

Burning debt means relieving thedebt  slaves of their chains and that my dear friend is a no no at this stage.

Tue, 12/15/2015 - 10:42 | 6925508 lordbyroniv
lordbyroniv's picture

Guy from Raymond James on CNBC said get ready for 'rip your face off, rally'.

Uh..ok...sure.

Tue, 12/15/2015 - 10:51 | 6925566 Kina
Kina's picture

Never ending corporate bankruptcies, government spending cuts, massive unemployment, very low standard of living for many.

 

But of course US will never cut military spending......they will bankrupt everybody else but keep the military industrial complex as rich as possible.

Tue, 12/15/2015 - 10:55 | 6925588 Project_Engineer
Project_Engineer's picture

As someone who works in manufacturing, just curious which specific manufacturing industries are suffering? We have some pretty bad capacity issues on our hands so to me that doesnt scream recession.My thoughts are this is industry specific.

For the record I work for a custom injection molding company.

Thu, 12/17/2015 - 12:49 | 6935529 Jstanley011
Jstanley011's picture

The indexes being down means it's more likely that your capacity issues are what's industry specific.

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