"They're Baaack! And Why You Should Be Worried – Very Worried"

Tyler Durden's picture

Authored by Mark St.Cyr,

Bubbles are easy to spot – pinpointing when they’ll pop – is quite another.

I coined that phrase a while back which is nothing more than adding my own spin combining two very old catch phrases used by seasoned traders and investors. I use the word “seasoned” for a reason. Why?

Because they’re the ones that have been around (and been burned themselves) yet lived to trade, or invest, another day. Those who remained wedded (usually the novice or one who’s never experienced true volatility) to the more prominent and specious claims of “you can’t tell when you’re in a bubble” followed with “you can always get out in time” for the most part are long gone. i.e.,The bubble popped into the ether – along with their money.

Nowhere was this phenom more apparent than the real-estate boom of the early 2000’s, which followed the prior phenom only 10 years prior (e.g., the dot-com crash) that should have seared into people’s memory for millennia just how “bubbles” take shape – and the resulting financial devastation that happens rapidly once they’ve popped.

Guess what? (actually you already know) nobody seems too care. Yet, here’s something you may not know, but should: It’s all happening again, and in the same time frame.

We are once again (you’re going to see that phrase a lot) hovering in and around the all-time highs in the “markets.” And, once again, all the warning signs are coming into place that should be the tell-tale signs for prudence and caution. Here are three, but they’re a very big 3 when combined. Ready?

  1. Tony Robbins has authored another financial book.
  2. Suze Orman has once again reemerged to deliver her brand of financial advice.
  3. They’re both delivering their insights at a venue titled (wait for it) Real Estate Wealth Expo™, where you too can learn how to become a millionaire via real estate.

So, let me make this statement right-off-the-bat: This isn’t a hit piece about either Tony, Suze, or The Expo. What I’m strictly relating my argument too is the phenom and psychology that reemerges with a vengeance during what is known as “the topping process.” aka “The late stages of a bubble mentality.”

This is the moment in time where generic, over simplified advice, that sounds so good (and too good) shouted too an adoring crowd  – should be taken as the siren, and clarion call to those who are diligent in preserving their wealth to buckle up, buckle down, and prepare in earnest. For once this show is over? “Over” is going to be something many of those attending these types of seminars are going to pray for – as in “Please make it stop!”

To re-aquaint you with a little ancient history, let’s remember Tony’s first book (Money: Master the Game) and when it emerged: November 2014. Do you remember what else took place at that point? Hint: QE (quantitative easing) ended in earnest.

Remember what followed for the next 2 full years? Again, hint: The “markets” ping pong’d between “all time highs” and “Holy S–t! This thing is all about to collapse – again!” Which is precisely why we now have something called the “Bullard Bottom.”

What were the markets doing prior to this?: A straight up, one-way, rocket-ship ride since the origination of the “Bernanke Put” then reiterated in 2010 by its namesake chairman in his now famous (or infamous) 2010 Jackson Hole speech, where he basically announced QE “forever” would remain under his tutelage until he retired in late 2014.

Since then what’s remained and is still prevalent today (maybe even more so) is that other phenom now known as “Buy The F’n Dip” (BTFD.)

When Tony’s book first emerged I made my opinion of it quite clear in the article, “Why Tony Robbins Is Asking The Wrong Questions” One of the main points I tried to express was the following. To wit:

“The real issue at hand from my point of view is this: Looking for answers to both financial safety as well as financial freedom in the same light or viewpoint where it seems one only needs to “think like a billionaire” or “tweak” or “slightly modify” perceptions on how one approaches these financial markets today – will hurt more than it will help.

 

The markets for all intents and purposes are no longer for the “average” person looking to make gains in any form today. What is needed now more than ever is a direct understanding that safety – safety above all else – is paramount. And exactly how one can achieve it. Or get as close to the proverbial “cash in the mattress” understanding of it as humanly possible.

 

The idea of “diversification” is a great sounding idea in principle and theory. However, it is one of the greatest myths when it comes to protecting one’s assets in today’s financial market place aka Wall Street.”

Not only do I still feel the same today as I did then. My opinion has become far more steadfast.

I had even expressed this a year later in Nov. of 2015 when (once again) Tony was appearing on many of main stream financial/business media outlets as the “markets” kept up the appearance of “gains” as they ping pong’d between “near death” experiences and ” new all time highs.” Even if those “highs” many times were only by a mere point or such, yet, the headline was the only thing that seemed to matter.

In the article “Why Tony Robbins Is Still Asking The Wrong Questions” I laid out my argument using charts, and current data, as to try to drive this singular point across. Again, to wit:

“First: The answers to the questions Tony realized are far from groundbreaking. They’ve been around for some time. Yet, it’s the second part that has the most troubling aspect in my view, and that problem is this: Although fees are a very important aspect of financial planning at any level. Where prudence in reducing them should always be sought with vigor. In markets such as these, just one year since Tony’s book “Money Master The Game: 7 Simple Steps to Financial Freedom,” (2014 Simon & Schuster) The most probing questions that should remain front-of-mind, everyday, with no respite should be focused squarely to: The surety for the return of one’s money. Then the proverbial “on.” Period. Confusing that sequence today is a recipe for financial disaster waiting to happen in my view.

 

Safety today is paramount. I am ever-the-more resolute of the opinion: Everything else is playing around the edges. And as I watched or listened – I heard nothing addressing the preponderance of possible systemic failures or upheavals. Let alone how one might safeguard themselves from one.

Oh wait, yes there was one: “diversification.” All I’ll point to on that note, is what I pointed to last time – 2008. For diversification in the markets was, for all intents and purposes; a meaningless exercise during the panic. Why? Lest I remind you during the panic how everything was going down the drain simultaneously?”

As illustrative of what the “markets” were doing back then. What I would like to remind you of is this:

During this period (e.g., 2015-16 and still present today) there’s a very little discussed fact: Many of the experts couldn’t do the one thing the least informed “investors” been doing in spades and “winning!” e.g., BTFD horns-over-hooves, forget fundamentals, forget diversification, forget the experts, forget everything. Just buy an ETF or Index (just make sure if has a central bank’s bullseye on it) and spend the rest of that time once used for “research” in researching and picking out your desired options in your new Rolls!” Bam!

For those who are questioning my assertions, may I remind you that even Paul Tudor Jones during 2016 was battling losses (yes – losing great amounts of money resulting in $2.1 Billion in redemptions alone.) The reason? (in my opinion)

Hedge funds (you know, where that term “diversification” is the root of its meaning) can’t hedge in a “market” without amassing losses for those hedges. Combine that with fees and more? And the best of the best can’t compete with a chimp throwing darts at a board full of ticker symbols supported via central bank intervention. Making the whole idea that one can simply “diversify” to safety pure poppycock. Period.

To repeat – if hedging is now pretty much a losing battle (see preceding paragraph) and hedge ultimately means diversify, as to hedge against losses – where even the professional money manager can no longer “hedge” without incurring losses (even those once considered “the best”) what does “diversify” currently mean to the unskilled or average investor? Where even going to “cash” which was once thought the ultimate “safety” as in a “Money Market” account no longer applies to that once thought “safety” zone.

Why some might ask? Easy…

Your “Money Market” fund today is basically nothing more than a stock with a different name. In other words: it can be gated without notice other than telling you – it’s been gated. (e.g.,you won’t be able to get at it. And who knows for how long, if ever.) Since the rule change.

Also: it can “break the buck” e.g., It’s no longer guaranteed to be worth what you’ve deposited. e.g., $1.00 can now fluctuate to be worth what ever the “market” states it to be. Just like a stock. Hint: Think Snapchat™ for clues.

As alarming as the above might sound. (And I’ll bet dollars-to-donuts you wont hear that coming from the stage) You know who else was perplexed and calling for any help no matter how stupefying it sounded? You guessed it – today’s (once again) “financial expert” Suze Orman.

For those who may not remember how precarious and outright terrifying the “markets” were gyrating back during 2015 (you know, back in the ancient history) it was none other than Ms. Orman that took the Twitter-verse to call for the one. and only, great hope the “markets” seemed to have left, when she called to the heavens for none other than CNBC™ host James Cramer to plead with Janet Yellen as to not raise interest rates.

From the article, “The Week That Laid The Experts Bare” To wit:

“Then there was Suze Orman’s taking to Twitter™ pleading to none other than the Fed. and Jim Cramer.

 

Of Fed. Chair Yellen she pleads “help us out. Commit to no rate increases.” And to Mr. Cramer, “Jim do something” and more. This is coming from someone who self describes themselves as “America’s Most Trusted Personal Finance Expert.” I’ll let this stand on its own, and let you be the judge. I’m at a loss for lost for words, and for anyone who knows me – that’s saying something. For one can only surmise by her pleads, those that were taking her advice of late were caught and blindsided by the events of the day much like she appears to have been.”

I guess time heals all wounds, and BTFD investing advice heals all 401K balances. That is – until it doesn’t – but no one cares. Why? Let me express it this way for this is what now seems to be the current meme for creating wealth. Ready?

“Just BTFD, or flip that house! It’s so darn easy, and the music is playing so loud I can hardly hear myself think, but that’s the point – I don’t have too! It’s a win-win!! And Yes -you too! can become a millionaire easy-peasy. The only hard part? Are you willing to take the risk – and decide today?”

That’s about it as far as I can tell. However, since I’m also in the business/motivation business let me offer you up this little tidbit of caution if you’re planning on attending one of these so-called “wealth” seminars. And it’s this…

As you jump, cheer, and shout as Tony or any other speaker there screams from the stage for you to shout in unison, or to the person directly adjacent to you, “I own you!” as some mantra for you to remember as to help solidify your reasoning, and wherewithal as to commit to your decision making process. Let me add this one note of caution…

That is precisely what the banks, mortgage holders, credit card companies, city, and county real estate tax authorities, IRS, bankruptcy courts, lawyers, and more will be shouting at you if there’s even a hiccup in this current BTFD “market” stampede.

And if you think there’s no true “market” indigestion forth coming? Here’s just two as of late to consider.

First: Canada (you know, where the latest “Wealth Expo” just concluded March 18th in Toronto) is showing the beginning effects when “hot money” flows are seen (as in confused) as “proof” of investment prowess. Yes – Toronto is booming. But there’s a reason, and it’s not a good one. That reason? Because Vancouver values are collapsing. Now down some 40% and growing as Chinese “hot money” needed to find another spot to park, and quick!

How do you think all those newly minted “investors” in Vancouver currently feel?

Second: The Federal Reserve has now openly stated not only are they going to raise rates – they are going to raise far faster than anyone just 4 months ago thought plausible, while also openly discussing the need (and want) for balance sheet reduction to go hand in hand, all while the economic reports such as Atlanta Fed. estimates Q1 GDP have crashed to now below the previously revised down 1.2%, to now just .9%.

And if that wasn’t enough to make one think twice? Add to that the now professed answer by Minneapolis Fed. president Neel Kashkari when questioned about Fed. responses to any potential sell-off. To wit:

“Don’t care about stock market fall itself. Care abt potential financial instability. Stock market drop unlikely to trigger crisis.”

Remember: He was the only dissenter in the latest March hike. And appears to be not worried in the least.

Which is precisely why you should, for “History doesn’t repeat, but it often rhymes” no longer appears purely anecdotal with the above for context, does it?

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knukles's picture

Bones, do something.
The market's dead Jim.

Shemp 4 Victory's picture

Welcome back to the Chuck Prince Memorial Dance Marathon...

abyssinian's picture

hahaha Pit Bullshiter! The sad part about that clown is he thinks he is a legit businessman... just because he blah blah blah rapping backups on other people's songs, next thing you know, he calls himself "international clown world wide" lol Now giving out investment advice... what's next? cooking show and how to steal my hubcaps? lol

political_proxy's picture

"shouted too an adoring crowd"

Stopped reading there.

Ignatius's picture

"Hi.  I'm Don Lapre.  I used to live in a 1 bedroom apartment.  Now I live in an 8 bedroom apartment, and it's so easy."

Mano-A-Mano's picture
Mano-A-Mano (not verified) Ignatius Mar 26, 2017 10:38 PM

LOL.

Great piece, btw. These guys sing the MERMAID song of the American CURSE. Luring the gullible.

http://biblicisminstitute.wordpress.com/2014/07/17/is-america-cursed/

stizazz's picture

But I bought a million-dollar house with no money down and no credit.

Is that good enough to get a job with those guys?

Chris Dakota's picture
Chris Dakota (not verified) political_proxy Mar 26, 2017 10:14 PM

Bubbles need to have participation of the broader public.

When you get the subprimes with zero down, interest only, stated income then it will be maybe 2-3 yrs before boom.

When your gardner who doesn't speak English buys a million dollar home its close.

They also recruit minorities to sell these toxic mortgages to their same group.

I recall in Oakland 2005 they had a truck all painted up with subprime loans and bullhorn in Spanish on International.

Joe Sichs Pach's picture

I'm thinking the subprimes and gardeners are all tapped out.
In the "good old days" they could at least make a few months of payments before defaulting. Not sure that can even happen anymore.

BeanusCountus's picture

So true. We aren't exactly there yet. But getting closer. Signs sprouting, not yet in full bloom. Musical chairs kickin a few people out now. Only thing different is Central Banks ready to step in and save another day.

S Spade's picture

hit too close to home?  you one o barack's zombies?

jcaz's picture

LOL-  Suze Muff-Muncher-  showed everybody how to flame out a phony career-  

Do something useful for once, Suze- go back to waiting tables, sweetie.....

Oldwood's picture

Now is when the big money shows up for these shysters. Just enough price history to create the appearance of credibility....that the time has never been better to BUY...and then it is GONE!

NihilistZerO___'s picture

But the dipshit who wrote the article says...

Nowhere was this phenom more apparent than the real-estate boom of the early 2000’s, which followed the prior phenom only 10 years prior (e.g., the dot-com crash)

The Real Estate Bubble began only 2 years after the dot-com crash.  In anycase this mother is going to pop spectatcularly over the next 2 years...

Takeaction2's picture
Takeaction2 (not verified) knukles Mar 26, 2017 10:49 PM

I went to this (Portland, Oregon) and it was absolutely amazing.   Now...They are using these headliners to get you in.  Tony Robbins was amazing...and Robert from Shark Tank was amazing.  These headliners just talk about motivational stuff...and you are entertained and enlightened.  Between these headliners...you are ransacked and HAMMERED by these slick salespeople doing these pitches...It is insane.  The first one was the real estate pitch.  How to flip homes...use our money.  All you have to do is come to our 3 day retreat and we will authorize you to do this.  I am shortening this 2 hour pitch.  I was in a buisness owner section...I had lunch & talked to Tony Robbins myself...I got his new book...etc.  The average Joe who paid the $199 in the back rows (Numbered around 7000) was all ears.  The section that I was in with fellow business owners could see this snake oil salesman scam from a mile away...

The Pitch...

Could use an extra $66,000 every couple weeks? (Crowd behind us RAORED..."YEAHHHH"

They stated "That is the average profit on a house flip after everyone is paid with our system."

All you need to do is come to our 3 day retreat and we will authorize you to be part of this.

You use our money to finance the homes, The money is loaned to you at 1.65% (No terms, No nothing mentioned...)

You don't pay us back until you are paid...

How much is the retreat??  Normally it is $3000.  If you sign up now...it is $997.  AND if you sign up now, I will give you a certificate that will give you credit for $997 after you close your first deal...SO THIS ENTIRE THING IS FREE.

You need to get to the tables now....we only have 600 spots available.

....................OKAY...BREAK......That was the pitch...I watched 40 foot black tables lined up with closers.  My fellow employees and I counted how many people (approx) were at these tables.  The tables were all around the venue.  Probably 75 closers handling the payments...There were around 1000 people that signed up for this.  So 1000 Times $1000 is $1,000,000.  THis guy pocketed $1 million dollars in less than 2 hours.  People were running to the tables.  And the 600 spot limit was horse shit.  

The second pitch was on Stocks, and Options Trading...2 hours...riled everyone up...You can't lose with our system...Guess how much?  Yep $997.00  This must be a magic price point.  Next one was hours on how to publish your own books.

It was absolutely incredible how this show drained people of their money playing with their dreams.... 

If this show is in your town...I would recommend going just for the entertainment and watch the PRECISION marketing. I am a business owner...I learned so much on how to make people react...
Never a mention or RISK, LOSS, NOTHING Negative.   

CompleteAphasia's picture

And for the $2495 package you only get a continental breakfast - lol

runnymede's picture

How much for the VIP upgrade?

Moe Hamhead's picture

To the moon Alice!

Bigly's picture

Bilious, odious roided freaks and big two faced lesbians should not be considered experts by boobus americanus.

I literally cannot stand to watch...or look at...any of them.

Nasty. Just release the kraken already

Anarchyteez's picture

Bigly just won the thread. All bow down in honor.

Yen Cross's picture

  Gold is right at the 200day and 50week averages. If those go, they're gonna be good support levels.

Anarchyteez's picture

Dude. I hope it collapses! I'm praying! PLEASE BREACH ALL SUPPORT!!!

Imagine the stacking!!!

AR15AU's picture

over a billion ounces of open interest in silver on the comex.. i'd love to see them take it to two billion... they make these promises to the world and i redeem their promises with my little green pictures of dead people

Anarchyteez's picture

Great description of fiat.

PlayMoney's picture

Support breach = PPT to fix said breach. Don't get too excited. 

booboo's picture

Get Lewis Ranieri on the phone, we need to dump these MBS now!

Angelo Misterioso's picture

ms dyke or man - very creepy person - almost predatory like

Mazzy's picture

They're already offering sub-sub-prime loans, with nothing down.....at credit unions.

Anyone been hearing these on the radio lately?

Atomizer's picture

Deutsche Bank and AIG fallout. It's coming. 

roddy6667's picture

All we need now to be complete is Don Lapre with a new scam that he invented in his tiny one bedroom apartment.
Being dead shouldn't stop him.

Atomizer's picture

I forgot about that scamming asshole. Good reference. 

Blano's picture

He killed himself in 2011.

 

Blano's picture

Oh sorry didn't see your last sentence.

Well depending on where he's buried, he can still vote.

Atomizer's picture

Derivatives markets are spinning out of control. 

red1chief's picture

True, the only question is how deep is the hole in that Ponzi. It's gotta be in the many trillions. Anyone who recommends buying the stock of TBTF banks must be smoking something. Trump is not likely to spare the shareholders, but the taxpayers will backstop the depositors to keep the system afloat. 

BorisTheBlade's picture

Many trillions, so many that it's already 1,2 quadrillion (in 2013): https://moneymorning.com/2013/09/18/heres-what-1-2-quadrillion-looks-like/Ahem, Porsche 911 2012 Turbo Carreras for every man, woman and child on Earth. Notional amount, yes, but still.

GoldHermit's picture

Their sheep-like disciples will go bankrupt in two ways – gradually then suddenly.

runnymede's picture

Hemmingway reference will always get an upvote

TAALR Swift's picture

Bull or Bear, remember that there's a sucker born every minute.

If you don't know who the Sucker is, odds are...

JustPrintMoreDuh's picture

Green chutes are here again.  

Dilluminati's picture

I'm rolling out of these non-garunteed dollar-in dollar out investments.

Your “Money Market” fund today is basically nothing more than a stock with a different name. In other words: it can be gated without notice other than telling you – it’s been gated. (e.g.,you won’t be able to get at it. And who knows for how long, if ever.) Since the rule change.

Also: it can “break the buck” e.g., It’s no longer guaranteed to be worth what you’ve deposited. e.g., $1.00 can now fluctuate to be worth what ever the “market” states it to be. Just like a stock. Hint: Think Snapchat™ for clues.

My deposits are now in cerificate of deposits for the self-directing IRA.  The managed funds of most 401K's subscribe to the above.

https://fixedincome.fidelity.com/ftgw/fi/FILanding?bar=p#tbcds|treasury|cd-new-issue|cd-tab-content

I grabbed the 10 year and at my age that was wise, I hold to maturity I get the money back unless banking as we know ceases to exist then it's on to precious metals (lead).


The demographics alone, the fights in the sand this weekend, the indiference by policy makers to take into account automation, robotics, and AI.  

https://www.nytimes.com/2017/03/19/business/dealbook/adam-lerrick-imf-tr...

I'm not saying that the punchbowl won't stay refreshing for the short-term, but the current valuations are simply unsustainable.  I hope people are long here and sell out higher, grab even more of the absurdity and pocket it.  Doesn't bother me in the least.

But even former 1st world nations are starting to show signs that we use to attribute to failed nation states.

Last week was a pretty good example of that in the USA, UK, and other G8 nations.  Terrorism, politcial deadlock, mounting financial irresponsibility, and government and business leadership simply not responding to the challenge.

We're turning into an ugly culture and there is no turning back.

This folks is indeed going to end badly.

Tony Robbins and his ilk are entertainers who sell dreams, their huckster books and quick get rich schemes make money in bubbles and then destroy people in corrections.  If politician's are hollywood for ugly people then the unique Tony Robbins is opening night for the theatre of the absurd.

I sell when I see Drudge touting a bull market on his front page, I buy when he has a bear as the cover.  Time, Drudge, MSM touting one or the other and I'm going the other f0cking direction, I did better than Tudor Jones, he was just born rich.

aloha_snakbar's picture

Would that be the same Suzie Orman who lived in her van for six months after she got out of college? Think Ill pass; I have a crack whore that gives me pretty good tips now...

Stan Smith's picture

I can tell you from being in the RE and Financial Services industry my whole professional career, the number of hucksters involved with this is long and wide.  And quite frankly, embarrassing.

I always used to joke -- and still do sometimes -- that being in sales SELLING SHIT to folks in the Real Estate industry (salespeople specifically) is likely a more profitable venture than actually being involved in moving houses and condos.

Having seen some of this first hand,  it's true that there is some good stuff that comes out of this.   But I'd say 80% of is crap.   And I mean REAL crap.

But getting a desperate Realtor to think that your information and/or product will help them boost sales and listings?   It's close to the easiest deal around.   Remember too, most all of these folks are self employed,  and footing the bill for these 'conventions' themselves.    They arent going to go to these things and come home empty handed.

alfbell's picture

Tony Robbins last financial book was worthless. He's a great business man (revenue/profit earner) but he knows zero about investing, markets, finance, money, etc.

kahplunk's picture

Shoe shine boy gave a tip

runnymede's picture

^^^^That would make him a huckster.

He's selling air and an emotional experience. But I think you do get a certificate. Sort of like college.

 

Hillarys Server's picture

But that's not the point. The point is that he's seven feet tall and has big hands.