WORST STOCK MARKET OPENING IN 84 YEARS
2016 is an election year. Specific weakness remain from the crash of 2008 in the system globally Interlinked markets globalize good and bad news rapidly. In 2016, an election year, we anticipate HIGHER VOLATILITY which we have been predicting. We also remain on guard as our blogs have been RISK OFF reporting about – for – SUPER CRASH.
These issues fall into out thinking review process on the markets:
- The cause of the CRASH ( wild leverage and speculation ) have not been addressed. The foundation cracks to our entire system are worse now than in 2008 as a result.
- Nations lie. You can’t rely on the reports.
- Unemployment is not 5% in the USA. Because they lie. The long term unemployed are no longer considered at all. They once were. They no longer are. When considered the USA is at 22% unemployment.
- The stock market participation index – the base of those participating never returned to NORMAL following the 2008 crash. The base of those participating in the market remains at a historic low.
- Institutions are not investing in equipment, innovation and growth. In 2015 the one trillion dollars that might have been invested in sustained recovery, over 1 trillion dollars, was invested in stock manipulations via stock buy backs often using fantastic leveraging with free money from the FED. Stock prices are manipulated with regulatory impunity.
- The US Debt has risen since the 1970’s from responsible spending and debt ratios, to unsustained spending and debt ratio’s. The fully allocated unfunded liabilities of the US have now passed 250 trillion dollars. In Ronald Reagan’s Presidency the USA had a first year of 1 trillion total in red ink. That line has risen straight up since, without leveling off. Our lenders Japan, China and the EU have cut back on buying our debt as they know our ratio of debt per citizen is greater than Spain, Greece, Italy, the Gulf or Asia nations. No nation has EVER accumulated this level of debt, at this pace, in such a short time, and continued to grow and prosper not EVER. Today 73% OF OUR DEBT IS BOUGHT BY THE FED – which is a merry go round of adding to the debt load of our people. This is not sustainable. Who says? Everyone. This debt rocket is not sustainable. Politicians can no longer spend more than they earn – well no one can – really – can they?
- Leverage – today a fully unregulated market manipulates prices on EVERYTHING. The market is called by many names but we will call it ETF’s. The ETF market was 800 billion before banks could speculate deposits of your grandmother – off shore – at fifty to one leverage borrowing – with no regulatory supervision at all. Shadow banking and dark pools further insulate the criminal nature of this casino capitalism. All nations participate for greed and profit. This game of musical chairs uses fantastic leverage. ETF and the like are contracts. They are traded privately. There is no regulatory central learning, or reserves, or method to manage MARGIN CALLS and collapse of these markets. They have risen now collectively to levels no one can report on, and to which we estimate has passed 400 trillion in 2015. This pig in the python, is DEBT ridden. As the market collapses into SUPER CRASH which it always does – and will soon again – the calls on the debt will dump assets from ETF’s into all markets as deflation tidal waves overwhelm all nations. The result will be worse than the 1920’s depression ( because law makers never learn ) and the consequence will be like always – world war. Every one of us can feel the truth we just don’t know WHEN. ETF’s are not vulnerable to the SUPER CRASH it is ETF’s and their secret private agreements and deals that are not systemically viable, that will CAUSE THE SUPER CRASH. ETF’s are Warren Buffet’s WEAPONS OF FINANCIAL MASS DESTRUCTION – the worse evolution of STRUCTURED ASSET investing and pools. A global regulatory frame work criminalizing speculation in all forms, from shorts to ETF’s is required to reign in the greed and abuse to the world system, now just a casino with computers playing one program against the other. This is too dangerous to discuss really.
- The Profit and Earnings ratio of stocks is healthy at a peak of 16 to 1 or 16 years to earn the price of that stock from earnings. Today the stock price averages around 30 to 1 due to fantastic leverage. Said another way – the ratio of stock price to earning is the highest it has ever been supported by the lowest base of trading participation known in modern decades. No market can continue to advance on low trading participation on totally over priced stock prices made possible by fantastic leverage with free money. As SUPER CRASH hits the margin calls on loans and from lenders becomes so instant the assets must be dumped from property to shares and bonds such that the entire market becomes a NIGERA of dumping – fostering sustained SUPER CRASH. Anything can trigger the SUPER CRASH.
- We predict a real estate slaughter and an equity SUPER CRASH for the reasons set forth in our blog since August.
- We have suggested to ride out a decade long deflation ( downward price storm ) globally as the market DELEVERAGES from the abuse of credit and the greed of unregulated financial institutions – who trade in the cloud when the regulations are all local to nations – THAT individuals move from RISK ( stocks bonds real estate and other assets ) into diversified insurance portfolio investing with licensed agents telling you options for your situation. You will sleep like a baby. You will have principle fully protected no loss. You will insulate against inflation and protect against deflation at the same time. There is no other equal SAFE HAVEN in our opinion in todays’ market for reasons set forth here.
On opening day – China melts down 7% triggering a stop of all trading on Asian Shares due to panic. When they open tomorrow the panic will continue and another stop is likely. This is known as a contagion event. This will trigger a world wide panic. If it does not happen tomorrow it WILL HAPPEN soon the issue is when. The reasons are set forth here. The issue is national debt – every where for every nation – and leveraged speculation into markets that require a global RE-REGULATION more signifiant than any time since the NEW DEAL of the 1930’s. The financial regulations were set up before there were internets, flash trading, digital trading, and software manipulation of price. Speculation which is rampant must be once again made criminal. Without such RE-REGULATION the economics of the world are hostage to unfair trade practices the regulatory community has no tools to control or moderate.
The system is broken. All nations. All markets. All jurisdictions. Great leadership is required to FIX IT. The problem is not the symptom the problem is the CRISES OF LEADERSHIP. That remains the one problem facing the world today. Great leadership will fix the broken system. Anything less will perpetuate the greed.
1% own more world wide wealth than 99%. This is a breach of social contract and economic foundation. Unless we fix that systemically we move to SUPER CRASH and WORLD WAR. The USA and other nations must stop spending more than we make, revise social contracts that are not possible to ecumenically manage, redistribute wealth, and reset the system at core – balancing budgets by law. If we don’t reframe our debt saddles globally, world war is the outcome as we default on obligations and the world system breaks into the void.
The void is coming because the CRISES OF LEADERSHIP remains the core item.
Meanwhile the house of cards, the musical chairs, moves around the room while the band continues to play. Have fun folks. Enjoy the dance. But please be mindful of where you will be standing when the music stops ( financially speaking ).
CEO SPACE is Forbes # 1 Conference business owners and professionals CAN NOT AFFORD TO MISS in 2016 – for many reasons but one is we will work to assure your safe when the music stops and profitably maximally while the song continues to play.
Information is power.
Thanks for staying tuned.
This too shall pass.
Berny Dohrmann – Chairman CEO SPACE next meeting March 6th and the world is coming.