Michael Pento: This Is "The Most Dangerous Market Ever"

Via Greg Hunter's USA Watchdog.com,

Money manager Michael Pento is sounding the alarm because we are getting very close to something called a “yield curve inversion.” Pento explains, “Why do I care if the yield curve inverts?"

"Because 9 out of the last 10 times the yield curve inverted, we had a recession... The spread with the yield curve is the narrowest it has been since outside of the start of the Great Recession that commenced in December of 2007... The last two times the yield curve inverted, we had a stock market drop of 50%. The market dropped, and the S&P 500 lost 50% of its value.”

Can we keep partying in the markets like it’s 1999 or is there an expiration date for the good times? Pento says,

“Well, I have put a check on the calendar for October because of the fact the rate of quantitative tightening goes to $50 billion per year, because the trade war will reach a crescendo, then because I believe, unfortunately because I am conservative, the Republicans lose the House of Representatives, because the Chinese credit boom will be in full reverse by October.

It is a confluence of events coming in October... we’ve already entered into the beginnings of a bear market around the world. The top 22 banks in the world are in a bear market. There are many, many examples of banks around the world that are in a bear market. You have a bear market in Chinese shares. 20% of the S&P 500 is in a bear market. This is an incipient bear market that is already beginning. I believe it manifests clearly to even the people on CNBC by October.

Where is there going to be the biggest trouble? Pento says,

“I have identified the nucleus of the next recession/depression to be corporate debt and not the housing market. We have a record amount of corporate debt outstanding right now. It is 45% of GDP. It has never ever been higher, but the quality of that debt... BBB, which is the lowest rung... of investment grade debt accounts for 50% of investment grade. The number of zombie companies is at a record high...

So, there is a record amount of debt, the quality of the debt is at a record low, and you have a record amount of companies just existing as zombies. They have to issue debt to pay back existing debt... The amount of zombie companies is going to surge when we get the next recession. The amount of credit defaults is going to surge...

The construct of corporate debt is so dangerous that when we hit a recession, defaults are going to skyrocket like we have never seen before. You will be talking about the layoffs and the plunge in the market and economic growth on a global basis.”

Pento also predicts,

The U.S. is not an island. The U.S. is not going to have 4% GDP growth while the rest of the world implodes... I look at the data, and data says this is the most dangerous market ever. This is the most precarious GDP on a global basis that we have ever had. Global central banks have never before printed $12 trillion...

We have never before had that happen, and the reason why they did it is to take sovereign debt into zero and negative territory so we can go on this inflation quest so asset prices don’t implode. That is all turned on its head. They have reached their inflation and it’s starting to unwind, and this whole thing is going to collapse.

When it collapses, the primary beneficiary is going to be the gold market... You should always have 5% to 10%, and if you are waiting, you are running out of time to get it cheaply. . . . I don’t think there is much downside to buying physical gold here, and you are running out of time if you have no position at all.”

Join Greg Hunter as he goes One-on-One with Michael Pento, founder of Pento Portfolio Strategies.

(This interview will talk about the coming recession and the inverting yield curve, record amounts of corporate debt and gold and silver in physical form as financial protection.)

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After the Interview:

Michael Pento added another omen for the markets. Pento says, “NYSE margin debt is at record high levels and cash is at record low levels. This means people will be wiped out more quickly and more thoroughly than ever before." There is free information, analysis and podcasts on PentoPort.com.

Comments

Cryptopithicus Homme Stuck on Zero Thu, 07/05/2018 - 14:55 Permalink

Michael Pento is one of my favorite interviews... I miss watching him take on the dunder-heads at CNBC.  No small wonder they don't want him back on TeeVee.  Pento seems quite anti-crypto but is obviously a very smart man.  I guess some people just do not "get" technology.  That said, I am confused about his late call that Gold will skyrocket to the moon but Silver fans should be happy if we even see $40??

In reply to by Stuck on Zero

james diamond squid ted41776 Thu, 07/05/2018 - 14:55 Permalink

dangerous????

equities are somewhat undervalued....as are homes.

inflation is running at 10% + or - and asset prices are trying to keep up.  the workers wages are not going up much, because he has been transformed into a 21st century slave.  The purchasing power of the worker for a home or other assets has been crushed.

the fed should have short rates at 10%, but they (of course) are party to your enslavement

In reply to by ted41776

Totally_Disill… ted41776 Thu, 07/05/2018 - 16:21 Permalink

The cabal banksters have been masking inflation - ask any family, it now takes more wages (and has for the past 5+ years) to buy basic necessities like bread, milk, etc.  We're told everything is great while retail is failing, stores shuttering (toysRus), 96+Million under/unemployed, utilities rates have increased, gas is going up...best economy in years, right?

In reply to by ted41776

GoingBig silverer Thu, 07/05/2018 - 16:10 Permalink

The Chapwood Index is full of shit. You can prove it anecdotally. Did the US economy really shrink 25% between 2011-2014?

 

Another alternative CPI is called the Chapwood Index. The components of this index were selected based on a survey of what Ed Butowsky’s friends and associates spend their money on (Ed Butowsky is the index’s creator). The prices of the 500 most commonly purchased items were then added together to generate the index. Not surprisingly, considering the methodology, the result is not a realistic measure of the change in the dollar’s PP or the cost of living. As evidence I point out that if the roughly 10%/year average increase in the general price level estimated by the Chapwood Index during 2011-2014 is correct, then the US economy’s real GDP must have been about 25% smaller at the end of 2014 than it was at the end of 2010*. In other words, if the Chapwood Index is an accurate reflection of PP loss then the US economy now produces about 25% less goods/services than it did four years ago. This is not remotely close to the truth.

In reply to by silverer

KansasCrude GoingBig Thu, 07/05/2018 - 18:34 Permalink

Dude wake up!  Self employed and 2 years ago my health insurance doubled under Obummer care to a grand a month for just me BCBS.   I am healthy haven't had a medical  claim expense out side of a physical every 18 months for 22 years.  No meds, nada.   Will have to have my 2nd colonoscopy this year at 62 .   Drive an older car and the premiums go up double digits each year.  How about homeowners.  Freaking Safeco tried to ass rape me this year for 25% increase due to all the home inflation I told them to go pound sand (again no claims) I have a Decra Metal roof they are near bulletproof, all brick, but even with a change it hit me for just under 10%  Home inflation causing big jumps in Prop Tax.  My next door neighbor  Mr. Dumbass paid list for his house my  property tax bill is up 15% this year. 

 I am try to live well as frugally as I can when it comes to shopping but like to eat well and have a couple of glasses of red wine most nights.  Beef, Produce, Seafood, have gone sky high excepting maybe Shrimp,  Chicken and Pork not as much.  Going out is much more expensive.  We laugh make that cry at the carryout menu's we have for our fav places when we look at the tab versus the our old menu's prices not to mention the smaller portion sizes.  Wine I have to admit is better and for the most part static to perhaps down a bit in price for the day to day drinkers THANK YOU!  The higher end stuff is still stupid priced not saying its not good just not worth the premium most of the time.   Insurance is the biggest freaking rip off of all.  I pay more for my insurances than I do on food and drink and probably utilities  combined.    Having maybe a grand total of $25K in claims over 45 years is I guess lucky but sure could have a lot more in the retirement piggy.  Thats just for starters. 

Perhaps you don't participate in those markets, live in a cave and don't pay for medical and auto ins.?  Eat like a bird and or grow all your own food.  I grow a fair amount mostly year round.  If so maybe you are not seeing any inflation.  Good for you!

In reply to by GoingBig

AsEasyAsPi ted41776 Thu, 07/05/2018 - 15:00 Permalink

This is NOT the most dangerous market ever, geeez.  Yes, it is Volatile and yes the high point was Jan. 26th.  That doesn't make it unnavigable.  Just got to know how to sail it.

EDITED: Its obvious the down-votes are sailing without a rudder.

In reply to by ted41776

curbjob ted41776 Thu, 07/05/2018 - 15:02 Permalink

Michael Pento sounds like a snowflake;

His long list of "never befores" doesn't include;

"We have never before had a president with the business acumen of Donald Trump."

Stability is a given with a stable genius at the helm.

In reply to by ted41776

Uchtdorf curbjob Thu, 07/05/2018 - 15:37 Permalink

L'Orange And In Charge's so called business acumen consists of him, back in the days before his attorney Cohn died of AIDS, dragging bankers to parties where all sorts of perversion occurred. That and the elites, having Polaroids of Trump at those same parties, loaned him a bit of money to play around in real estate with. Have you forgotten how current Commerce Secretary, Wilbur Ross, of Rothschild fame, bailed Trump out? Good boy. Good little Trumpet.

In reply to by curbjob

GoldenDonuts Thu, 07/05/2018 - 14:48 Permalink

The coming recession/depression is not so much a matter of time, but rather a matter of how much rigging, corruption, and outright crime the system can withstand.   It HAS to fall over under it's own weight at some point.

10044 Thu, 07/05/2018 - 14:56 Permalink

these book-salesmen shit heads have been saying shit like this since 2011...fuck'em all.

their only 'clients' (after being fired from wall st for being wrong so many years) are the poor uneducated public who keep on believing them so they buy their books, and youtube is their only sales venue.

Fuck'em all:

Peter "Shill" Schiff

Jim "CIA EXPERT" Rickards

Jim "fool's gold" Sinclair

 

 

gregga777 pods Thu, 07/05/2018 - 17:24 Permalink

But there's no room for bitchez.

You say that like it's a bad thing. Besides that they can always follow along in their cars anyway. And I don't want bitch back there screaming and rocking the boat because I'm winding it out way over 200 kilometers per hour. The ECU has a software limiter for 300 kph. 

In reply to by pods

gregga777 gregga777 Thu, 07/05/2018 - 17:41 Permalink

Apropos of nothing.

Back when I was living in Western Washington. One weekend there were some guys arrested by the WaSP for speeding on their motorcycles somewhere between Issaquah and North Bend on Interstate 90. They were nailed for, respectively, doing 120, 140 and 160 miles per hour. It's like geez guys, you can only do that sort of shit way, way East of Snoqualmie Pass. Preferably East of Moses Lake. 

In reply to by gregga777

HRH of Aquitaine 2.0 gregga777 Thu, 07/05/2018 - 19:33 Permalink

I knew a guy that drove a bus in Seattle. Bought a Ducati. Went to visit him and he had put duck tape on it because his fanny pack was rubbing the paint.

There is a special kind of stupid when you are such a loser that you put duck tape on a machine like that and actually admit to wearing a fanny pack as a grown man that is under the age of 80.

Don't know where that fucktard is, don't want to know.

In reply to by gregga777

junction Thu, 07/05/2018 - 14:59 Permalink

Who is this guy, Michael Pento?  Another mandarin with all the answers?  Sure, I'll buy that for a dollar.  If I want commentary, I will listen to someone who knows the score, like Ed Schultz.  MSNBC cashiered him in 2015 for not wearing rose-colored glasses.  

Oh, wait. . .

Political commentator and former MSNBC host Ed Schultz has died at the age of 64.

Schultz died of natural causes in Washington D.C., according to WDAY-TV, the Fargo, North Dakota, station where Schultz got his start.

----

No doorknobs seem to be involved in his death.

gdpetti Thu, 07/05/2018 - 15:09 Permalink

History calls it 'pulling the rug out'.... as the puppet masters close their OWO and introduce us to their NWO.

So, of course the market will crash, as it won't be needed in the NWO, any version of it.

It isn't just the common herd that has been 'dumbed down' ,but these sheep dogs as well, all of whom think themselves 'special'...  'masters of the universe', when they are really only sheep like all the rest.

falconflight Thu, 07/05/2018 - 15:33 Permalink

Before the US and her sovereignty was completely surrendered during the 1990's, the US could and did have higher growth rates than Europe...before, during, and after recessions.  I remember looking and marveling at the statistical differences.