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KEY TO TIPPING POINTS

1- Bond Bubble
2 - Risk Reversal
3 - Geo-Political Event
4 - China Hard Landing
5 - Japan Debt Deflation Spiral
6- EU Banking Crisis
 
7- Sovereign Debt Crisis
8 - Shrinking Revenue Growth Rate
9 - Chronic Unemployment
10 - US Stock Market Valuations
11 - Global Governance Failure
12 - Chronic Global Fiscal ImBalances
13 - Growing Social Unrest
14 - Residential Real Estate - Phase II
15 - Commercial Real Estate
16 - Credit Contraction II
17- State & Local Government
18 - Slowing Retail & Consumer Sales
19 - US Reserve Currency
 
20 - US Dollar
21 - Financial Crisis Programs Expiration
22 - US Banking Crisis II
23 - China - Japan Regional Conflict
24 - Corruption
25 - Public Sentiment & Confidence
26 - Food Price Pressures
27 - Global Output Gap
28 - Pension - Entitlement Crisis
29 - Central & Eastern Europe
 
30 - Terrorist Event
31 - Pandemic / Epidemic
32 - Rising Inflation Pressures & Interest Pressures
33 - Resource Shortage
34 - Cyber Attack or Complexity Failure
35 - Corporate Bankruptcies
36 - Iran Nuclear Threat
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38- Government Backstop Insurance
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"BEST OF THE WEEK "

MOST CRITICAL TIPPING POINT ARTICLES TODAY

 

   

 

2012 - FINANCIAL REPRESSION

2012

2013

2014

 

ROUND TABLE

 

Charles Hugh Smith is an American writer and blogger. He is the chief writer for the site "Of Two Minds", which started in 2005. His work has been featured on a number of highly acclaimed sites including: Zerohedge.com., The American Conservative and Peak Prosperity.

Rick Ackerman has professional background including 12 years as a market maker on the floor of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader. Rick Ackerman is the editor of Rick’s Picks and a partner in Blue Fin Financial LLC, a commodity trading advisor.

 

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Co-founder of The Financial Repression Authority, Gordon T. Long has an in-depth discussion on the current financial situation with Charles Hugh Smith, of OfTwominds.com and with Rick Ackerman, trader and forecaster of Rickackerman.com.

THE OUTLOOK ON QUANTITATIVE EASING

Rick:

“I’ve been shouting from the rooftops that the fed will never raise interest rates.”

If you want to find out if QE is working the first person you have to go to is the retiree. The whole idea of stimulus should have been refuted simply by the fact that savers have been cheated for so long.

Charles:

They may go ahead and do the quarter point rates increase because they have built up so many expectations to that. They will need to do this to create the allusion that the economy is recovering or else it’s robust.

Gordon:

The market may be a key driving factor, not because of the wealth effect; but because of collateral.

THE STATE OF JAPAN:

Charles:

“The Juggernaut of deflation is so huge now, that there isn’t going to be any time to react. Keep a shoebox full of cash because on that day we might wake up and the banks won’t be open, we will need that cash.”

I don’t see the possibility of massive inflation. The only viable way of getting money into the system is to borrow it into existence.

Japan, is a developed economy that has been in a deflationary setting for almost 25 years now. We can see what they’ve done and what effects it has. They have attempted to stimulate their economy by improving roads and infrastructure. But it has not worked. Japan refuses to cleanse their financial system to allow real investment so they have consequently brought in mal-investment with borrowed money.

Rick:

Japan had something over the last 20 years that we didn’t have, and that is us. Japan has a global economy to export into; we were the buyer of last resort.

NEGATIVE INTEREST RATES

Rick:

“If you can extrapolate a somehow positive benefit from negative interest rates, where would this benefit be and how long would it last?”

The idea is if people can no longer park money anywhere, they can only spend it or invest it, we have to ask, where are they going to invest or spend it? It’s inconceivable that money can find itself into somewhere in the economy that would promote growth and economic health.

Charles:

In a current example of negative interest rates we see what is happening with Sweden who is actively pursuing negative rates. The net result is that it is taking their housing bubble and inflating it even further. Basically it is pricing everybody out of housing and creating a credit bubble.

COLLATERAL GUARANTEES

Gordon:

“It is in the cards, in the middle of the next crisis.”

We have an approximately $500 trillion swaps market that is underpinned with collateral. So if bond prices were to drop it would be a horrendous situation. We were able to stop the 2008 crisis, we did not fix it we only stopped it. Now it will be a global issue, and the central banks will be forced to come in and pay attention to these collateral values. We have a huge pool of bond ETF’s that have exploded in the past few years, somebody has to sell these bonds but they are not easily transferred. The central banks will have to intervene in a massive way. I believe many people are betting on this, and are therefore taking risk adjusted positions. 

Rick:

“We are really talking about a quadrillion dollar bubble.”

Much of borrowing and leveraging shifted into rehypothecation. It occurred mostly in London markets that were more unregulated than US markets. So when we had the real estate bust in 2008 we needed something to pledge as collateral.

When you look at the entire quadrillion dollar enchilada, somebody may say the actual size of the bubble is only several hundred trillion dollars. When in reality the gross amount is something everyone involved in the daisy chain thinks they have a claim on a particular asset.

Charles:

We must own real assets, and have no debt. Whatever financial wormhole we are going to go through,we must own the right tools, because the tools will still exist after we get through the wormhole.

THE INDIRECT EXCHANGE:

Regarding a recent show with Warren Buffet, and Ty Andros, Editor at Tedbits Newsletter,

Warren Buffet so masterfully utilizes the indirect exchange. He takes paper, which is his entire insurance side of business and plows it back into real hard assets that will sustain themselves at a fair price. Buffet has don’t this so consistently for so many years and that is why balances; paper products (insurances, bonds, and structures against real assets). Buffet has certainly been a consistent winner without question.

Rick:

Buffet has also resisted the temptation of going after easy money. His money is not in Uber, Dropbox, and Instagram etc. It’s simple to see that it is not going to end well, not only for the companies but for the whole city, if I were to short any city in this country it would be San Francisco. Everything is so pumped up in that city because there are companies that hire these people that are extremely overvalued.

Buffet has demonstrated amazing restraint and discipline for sticking with the nuts and bolts, instead of going after the alluring high attraction companies. He has found real businesses with real products that have a sustaining capability to survive during good times and bad. 

Charles:

Raising the issue of risk, how do we deal with the kind of systemic global risk that we currently have? Risk is extremely misrepresented to the average middle class American. We are trying to help people make a realistic assessment of the global risk they are engaged in by having a 401k that is involved in these risky financial assets.

CLOSING REMARKS

Rick:

“You can’t look at what’s in prospect as hypothetical, if you don’t think there is going to be a collapse then you don’t understand the problem.”

 There is no way we can continue to muddle on, for one its taking a lot more debt to create the dollars’ worth of GDP growth at the margin. We are really going to face a day of reckoning. The most important thing is for us to be resourceful and ready for when it comes.

Charles:

“This enormous supernova of debt is going to implode and whatever is left will not be a financial instrument.”

Gordon:

“Crisis is nothing more than change trying to happen.”

We have so many global imbalances. We have political, economic, and financial systems that are not correct, we are still running from a Bretton Woods; post WWII model. And during this process, mal-investment, lack of price discovery and mispricing are rampant.

But on the flip side, for those who have prepared themselves for this storm, I think the world is going to see its greatest years. The advancements in technology, and so many other endeavors is staggering.  !5-25 years out will be an incredible time for the world but meanwhile we are going to go through some rough times, but there will be winners and there will be losers, and the winners are always the ones who prepare.

 

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LINK HERE to the VIDEO

 

MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - Nov. 15th, 2015 - Nov 21st, 2015      
BOND BUBBLE     1
RISK REVERSAL - WOULD BE MARKED BY: Slowing Momentum, Weakening Earnings, Falling Estimates     2
RISK REVERSAL - WOULD BE MARKED BY: Slowing Momentum, Weakening Earnings, Falling Estimates     2
GEO-POLITICAL EVENT     3
CHINA BUBBLE     4
JAPAN - DEBT DEFLATION     5

EU BANKING CRISIS

   

6

TO TOP
MACRO News Items of Importance - This Week

GLOBAL MACRO REPORTS & ANALYSIS

     

US ECONOMIC REPORTS & ANALYSIS

     
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES      
     
Market Analytics
TECHNICALS & MARKET ANALYTICS

 

   
COMMODITY CORNER - AGRI-COMPLEX   PORTFOLIO  
SECURITY-SURVEILANCE COMPLEX   PORTFOLIO  
     
THESIS - Mondays Posts on Financial Repression & Posts on Thursday as Key Updates Occur
2015 - FIDUCIARY FAILURE 2015 THESIS 2015
2014 - GLOBALIZATION TRAP 2014

2013 - STATISM

2013-1H

2013-2H

2012 - FINANCIAL REPRESSION

2012

2013

2014

2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS

2011

2012

2013

2014

2010 - EXTEND & PRETEND

   
THEMES - Normally a Thursday Themes Post & a Friday Flows Post
I - POLITICAL
     
CENTRAL PLANNING - SHIFTING ECONOMIC POWER - STATISM   THEME  

- - CORRUPTION & MALFEASANCE - MORAL DECAY - DESPERATION, SHORTAGES.

  THEME
- - SECURITY-SURVEILLANCE COMPLEX - STATISM M THEME  
- - CATALYSTS - FEAR (POLITICALLY) & GREED (FINANCIALLY) G THEME  
II-ECONOMIC
     
GLOBAL RISK      
- GLOBAL FINANCIAL IMBALANCE - FRAGILITY, COMPLEXITY & INSTABILITY G THEME  
- - SOCIAL UNREST - INEQUALITY & A BROKEN SOCIAL CONTRACT US THEME  
- - ECHO BOOM - PERIPHERAL PROBLEM M THEME  
- -GLOBAL GROWTH & JOBS CRISIS      
- - - PRODUCTIVITY PARADOX - NATURE OF WORK   THEME

MACRO ANALYTICS w/ CHS

- - - STANDARD OF LIVING - EMPLOYMENT CRISIS, SUB-PRIME ECONOMY US THEME
MACRO ANALYTICS w/ CHS
STANDARD OF LIVING - SUB-PRIME ECONOMY US THEME
MACRO ANALYTICS w/ CHS
III-FINANCIAL
     
FLOWS -FRIDAY FLOWS

MATA

RISK ON-OFF

THEME
CRACKUP BOOM - ASSET BUBBLE   THEME  
SHADOW BANKING - LIQUIDITY / CREDIT ENGINE M THEME  
GENERAL INTEREST

 

   
STRATEGIC INVESTMENT INSIGHTS - Weekend Coverage

 

RETAIL - CRE

 

 

  SII

 

US DOLLAR

 

 

  SII

 

YEN WEAKNESS

 

 

  SII

 

OIL WEAKNESS

 

 

  SII
 
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Please note that Mr. Long may already have invested or may from time to time invest in securities that are discussed or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

 

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