investmentwatchblog--2020-06-25--Really Bizarre Things Are Happening All Over The Globe

Just when you think that 2020 has been filled with enough trouble , even more stuff starts happening .
Coming into this week , we were already dealing with a new COVID-19 surge which has pushed the number of daily cases to the highest levels we have seen so far , a global economy which is in the process of imploding all around us , massive civil unrest in U.S. cities from coast to coast , and giant swarms of locusts that are wiping out farms all the way from eastern Africa to parts of India .
Unfortunately , now @ @ @ @ @ @ @ to our growing list .
Let ’ s start by talking about an alarming new outbreak of locusts .
The following comes from a British news source… Some of you may have just read that paragraph and come to the conclusion that this is “ old news ” .
After all , we have been hearing about the colossal armies of locusts in Africa for months , and I have published numerous articles about that unprecedented plague .
But the news story that I just quoted wasn ’ t talking about those locusts @ @ @ @ @ @ @ a brand new infestation that has erupted in Argentina , and one local official is saying that he has never seen anything like it ever before .
Just like on the other side of the Atlantic Ocean , these little critters are voraciously gobbling up everything in sight , and countless farms are being destroyed .
Now these swarms are heading for Brazil , and Brazilian officials are definitely extremely alarmed .
One of my readers in Brazil sent me an article about this emerging crisis from a Brazilian news source , and @ @ @ @ @ @ @ article which has been translated into English… What would you do if 40 million locusts suddenly descended on your farm ?
Of course the truth is that there would be very little that you could do that would make any sort of a difference .
Just like so many other farmers around the globe , you would simply watch as all of your hard work is completely wiped out .
Meanwhile , an absolutely gigantic plume of dust from Africa has crossed the Atlantic Ocean and is about to hit the United States @ @ @ @ @ @ @ Every once in a while a dust plume from Africa can cross the ocean like this , but the monstrous one that we are witnessing right now is truly unusual .
In fact , one expert says that this is “ the most significant event in the past 50 years ” … As this plume travels across the U.S. , air quality in some areas will drop precipitously .
Some of the dust has already arrived , but a “ thicker layer ” is projected to starting hitting Texas on Friday… On Wednesday @ @ @ @ @ @ @ across the Gulf of Mexico toward Texas .
Thursday morning , people in places like Brownsville in Texas and Houston will likely wake up to a beautiful sunrise and a hazier than normal sky .
Forecast models show the thicker concentration blanketing most of Central America and Mexico Thursday .
This thicker layer is likely to reach Texas by Friday and then take a turn to the east .
If the forecast model is right , it will move over most of the Southeast and MidAtlantic states over the weekend .
On top @ @ @ @ @ @ @ is starting to shake in a major way once again .
On Wednesday , southern California was struck by a magnitude 5.8 earthquake… That quake was followed by numerous sizable aftershocks , including one that was measured to be magnitude 4.6 .
Overall , there have been 2,267 earthquakes in California and Nevada over the last 7 days , and that is definitely alarming .
Farther south along “ the Ring of Fire ” , Mexico was hit by a magnitude 7.4 earthquake on Tuesday… Very large seismic events are happening so frequently @ @ @ @ @ @ @ on the news these days , and that is unfortunate because people need to wake up and understand that our planet is becoming increasingly unstable .
Here in the United States , scientists have been strongly warning us for years that we are way overdue for “ the Big One ” to hit California , and this is one of the things that I will be addressing in the new book that I am currently working on .
At some point there will be no more sand in the hourglass , and an @ @ @ @ @ @ @ .
Let us pray that we still have quite a bit more time before that happens .
But nothing can stop the inexorable march of time , and the deeper we get into 2020 the crazier it gets .
Unfortunately , the truth is that this “ perfect storm ” is just getting started , and that means that what we have experienced up to this point is just the tip of the iceberg .

by Michael Snyder
Just when you think that 2020 has been filled with enough trouble, even more stuff starts happening. Coming into this week, we were already dealing with a new COVID-19 surge which has pushed the number of daily cases to the highest levels we have seen so far, a global economy which is in the process of imploding all around us, massive civil unrest in U.S. cities from coast to coast, and giant swarms of locusts that are wiping out farms all the way from eastern Africa to parts of India. Unfortunately, now we have several more items to add to our growing list.
Let’s start by talking about an alarming new outbreak of locusts. The following comes from a British news source…
Dramatic footage captures an “astonishing” swarm of locusts swarm through farmland and destroy crops. The short-horned grasshoppers are capable of devouring the same amount of crops as 2,500 people would each day.
Some of you may have just read that paragraph and come to the conclusion that this is “old news”.
After all, we have been hearing about the colossal armies of locusts in Africa for months, and I have published numerous articles about that unprecedented plague.
But the news story that I just quoted wasn’t talking about those locusts. Instead, that report was about a brand new infestation that has erupted in Argentina, and one local official is saying that he has never seen anything like it ever before.
Just like on the other side of the Atlantic Ocean, these little critters are voraciously gobbling up everything in sight, and countless farms are being destroyed.
Now these swarms are heading for Brazil, and Brazilian officials are definitely extremely alarmed. One of my readers in Brazil sent me an article about this emerging crisis from a Brazilian news source, and the following is a quote from that article which has been translated into English…
In approximately one square kilometer they can have up to 40 million insects, which in one day consume pastures equivalent to what 2,000 cows or 350,000 people eat, Argentine agronomist Héctor Medina told Reuters.
What would you do if 40 million locusts suddenly descended on your farm?
Of course the truth is that there would be very little that you could do that would make any sort of a difference. Just like so many other farmers around the globe, you would simply watch as all of your hard work is completely wiped out.
Meanwhile, an absolutely gigantic plume of dust from Africa has crossed the Atlantic Ocean and is about to hit the United States. The following comes from CBS News…
A massive plume of dust from the Sahara desert in northern Africa has been traversing the atmosphere, thousands of feet above the tropical Atlantic Ocean, and is now cloaking the Caribbean and closing in on the southeastern United States.
Every once in a while a dust plume from Africa can cross the ocean like this, but the monstrous one that we are witnessing right now is truly unusual.
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In fact, one expert says that this is “the most significant event in the past 50 years”…
“This is the most significant event in the past 50 years. Conditions are dangerous in many Caribbean islands,” Pablo Méndez Lázaro, from the University of Puerto Rico’s School of Public Health, told the Associated Press.
As this plume travels across the U.S., air quality in some areas will drop precipitously. Some of the dust has already arrived, but a “thicker layer” is projected to starting hitting Texas on Friday…
On Wednesday, the dust is forecast to move across the Gulf of Mexico toward Texas. Thursday morning, people in places like Brownsville in Texas and Houston will likely wake up to a beautiful sunrise and a hazier than normal sky. Forecast models show the thicker concentration blanketing most of Central America and Mexico Thursday. This thicker layer is likely to reach Texas by Friday and then take a turn to the east. If the forecast model is right, it will move over most of the Southeast and MidAtlantic states over the weekend.
On top of everything else, the west coast is starting to shake in a major way once again. On Wednesday, southern California was struck by a magnitude 5.8 earthquake…
California residents received an emergency alert on their phones which read: “Earthquake! Expect shaking. Drop, Cover, Hold On. Protect yourself now. – USGS ShakeAlert”. The US Geological Survey (USGS) said the quake struck 17km south-southeast of Lone Pine. The tremor originated at a depth of 2.9km, with an epicenter around 17 kilometers south-east of Lone Pine. According to a USGS interactive shake map the impact of the earthquake could be felt in the Death Valley National Park. The earthquake has since been downgraded to 5.8 magnitude.
That quake was followed by numerous sizable aftershocks, including one that was measured to be magnitude 4.6.
Overall, there have been 2,267 earthquakes in California and Nevada over the last 7 days, and that is definitely alarming.
Farther south along “the Ring of Fire”, Mexico was hit by a magnitude 7.4 earthquake on Tuesday…
A powerful earthquake struck Mexico’s southern Oaxaca region on Tuesday, killing at least five people and shaking buildings hundreds of miles away. The 7.4-magnitude quake struck mid-morning, according to the U.S. Geological Survey. Its epicenter was off the Pacific coast about seven miles southwest of Santa María Zapotitlán, near the beach resort of Huatulco.
Very large seismic events are happening so frequently now that they barely make a blip on the news these days, and that is unfortunate because people need to wake up and understand that our planet is becoming increasingly unstable.
Here in the United States, scientists have been strongly warning us for years that we are way overdue for “the Big One” to hit California, and this is one of the things that I will be addressing in the new book that I am currently working on.
At some point there will be no more sand in the hourglass, and an unprecedented disaster will strike the west coast. Let us pray that we still have quite a bit more time before that happens.
But nothing can stop the inexorable march of time, and the deeper we get into 2020 the crazier it gets.
Unfortunately, the truth is that this “perfect storm” is just getting started, and that means that what we have experienced up to this point is just the tip of the iceberg.


investmentwatchblog--2020-06-25--Media-Induced Fear Of COVID-19 Is Starting To Cause A Second Wave Of Severe Economic Panic

Fear of COVID-19 absolutely crippled the U.S. economy during the first half of this year , and now it appears that there are some people that are pushing for that to happen again during the second half of 2020 .
Earlier this evening , I came across a headline that boldly declared that there will be “ 180,000 U.S. deaths of COVID-19 by October ” , and right now just about every mainstream news outlet is running stories about how the number of confirmed cases in the U.S. is surging .
And it is definitely true that we are seeing @ @ @ @ @ @ @ confirmed cases .
In fact , the number of new cases in the U.S. on Wednesday set a new record… The U.S. broke its record for the highest coronavirus cases recorded in a single day , with 36,358 new positives reported on Wednesday , according to a tally by NBC News .
Wednesday ’ s cases top the previous highest day count from April 26 — the first peak of the pandemic in the U.S. — by 73 cases , according to NBC News tracking data .
The World Health Organization saw its @ @ @ @ @ @ @ cases worldwide .
The mainstream media is treating this as some sort of a big shock , but of course the truth is that this shouldn ’ t be a surprise to anyone .
For months , I have been telling my readers that the lockdowns would “ flatten the curve ” for a while and that the number of cases would start to spike again once the lockdowns ended .
That is exactly what has happened , but anyone with even a little bit of common sense could have anticipated this .
@ @ @ @ @ @ @ northeastern portion of the nation were the epicenter for the outbreak in this country , but now it is states in the southern and western sections of the nation that have become the most prominent hotspots… Things are particularly bad in California .
Over the past two days , we have seen a 69 percent increase in the number of newly confirmed cases… Needless to say , the snowflake politicians in California are going to be even less eager to return to business as usual than they were before .
And since the @ @ @ @ @ @ @ activity than any other U.S. state does , this is going to be a major drag on the U.S. economy as a whole .
If this pandemic keeps dragging on for a couple more years , what are states like California going to do ?
Many had anticipated that life would be getting back to normal by now , but instead we are starting to see things go in reverse .
In fact , we just learned that the reopening of Disneyland has been postponed indefinitely… Other very large corporations are making similar @ @ @ @ @ @ @ shut down a whole bunch of their stores because of this new surge in coronavirus cases… On Friday , stocks slumped as second wave fears were reignited following a report that Apple would temporarily shutter 11 U.S. retail stores across Florida , Arizona , North Carolina and South Carolina.
” Due to current COVID-19 conditions in some of the communities we serve , we are temporarily closing stores in these areas , ” an Apple spokesman said in a statement.
“ We take this step with an abundance of caution as we closely @ @ @ @ @ @ @ to having our teams and customers back as soon as possible.
” Fast forward to today , when with stocks already sliding on renewed virus of a second wave of virus infections , moments ago Apple reported that it would re-close another 7 stores in Houston and Texas due to the coronavirus spike .
According to the optimists , this wasn ’ t supposed to happen .
The worst part of this pandemic was supposed to be over , and it was supposed to be all downhill from here .
But instead it @ @ @ @ @ @ @ will be with us for a long time to come .
New York , New Jersey and Connecticut have all announced that those traveling in from nine different states where COVID-19 is out of control will be forced into mandatory quarantine for 14 days , and police in New York will actually be actively searching for vehicles that have license plates from those particular states… Speaking of New York , this pandemic has already had a much larger financial impact than most observers had anticipated .
In particular , New York City is @ @ @ @ @ @ @ tax revenue , and Mayor Bill de Blasio says that the city may be forced to let 22,000 workers go… Sadly , a whole lot more government workers will be fired across the country before this crisis is over .
Of course things are even worse for the private sector , and we continue to get more examples of this every single day .
On Tuesday , we learned that GNC has decided to declare bankruptcy… And we have also just learned that the end may be near for Chuck E. Cheese… I @ @ @ @ @ @ @ E. Cheese in many years , but when I was a kid I absolutely loved to eat there .
As a youngster , it seemed like such a magical place , and now it deeply saddens me to hear that the company may not survive .
In the end , a lot more iconic companies will go under as America plunges even deeper into this new economic depression .
Fear of a virus has turned our economy completely upside down , and thanks to the mainstream media much of the population is going @ @ @ @ @ @ @ for the foreseeable future .

by Michael Snyder
Fear of COVID-19 absolutely crippled the U.S. economy during the first half of this year, and now it appears that there are some people that are pushing for that to happen again during the second half of 2020. Earlier this evening, I came across a headline that boldly declared that there will be “180,000 U.S. deaths of COVID-19 by October”, and right now just about every mainstream news outlet is running stories about how the number of confirmed cases in the U.S. is surging. And it is definitely true that we are seeing an alarming rise in the number of confirmed cases. In fact, the number of new cases in the U.S. on Wednesday set a new record…
The U.S. broke its record for the highest coronavirus cases recorded in a single day, with 36,358 new positives reported on Wednesday, according to a tally by NBC News. Wednesday’s cases top the previous highest day count from April 26 — the first peak of the pandemic in the U.S. — by 73 cases, according to NBC News tracking data. The World Health Organization saw its single-day record on Sunday with more 183,000 cases worldwide.
The mainstream media is treating this as some sort of a big shock, but of course the truth is that this shouldn’t be a surprise to anyone.
For months, I have been telling my readers that the lockdowns would “flatten the curve” for a while and that the number of cases would start to spike again once the lockdowns ended. That is exactly what has happened, but anyone with even a little bit of common sense could have anticipated this.
Earlier this year, states in the northeastern portion of the nation were the epicenter for the outbreak in this country, but now it is states in the southern and western sections of the nation that have become the most prominent hotspots…
Arizona, California, Texas, Florida, Oklahoma and South Carolina reported record-high new daily coronavirus cases during this week, as case counts continue to rise in more than half of U.S. states. Texas Governor Greg Abbott said the state is facing a massive outbreak with another 5,000 cases reported Wednesday. California Gov. Gavin Newsom reported Wednesday 7,149 tested positive, a record number for the nation’s largest state. Both states this week surpassed the entire European Union on the average number of daily cases.
Things are particularly bad in California. Over the past two days, we have seen a 69 percent increase in the number of newly confirmed cases…
The California Department of Public Health reported its second straight record jump in coronavirus cases on Wednesday as the state joins a handful of others with growing case numbers. California reported an additional 7,149 Covid-19 cases since Tuesday, a 69% increase in two days, bringing the state’s total to 190,222 cases, according to the state’s health department. The previous highest day jump was reported on Tuesday when the state recorded 5,019 additional new cases.
Needless to say, the snowflake politicians in California are going to be even less eager to return to business as usual than they were before. And since the state of California accounts for more economic activity than any other U.S. state does, this is going to be a major drag on the U.S. economy as a whole.
If this pandemic keeps dragging on for a couple more years, what are states like California going to do? Many had anticipated that life would be getting back to normal by now, but instead we are starting to see things go in reverse. In fact, we just learned that the reopening of Disneyland has been postponed indefinitely…
Disney is delaying the phased reopening of Disneyland and Disney California Adventure, the company’s flagship theme parks in California, the company said on Wednesday. The resort, located in Anaheim, California, was set to welcome back guests on July 17 after being closed for months because of the coronavirus pandemic.
Other very large corporations are making similar moves. For example, Apple just shut down a whole bunch of their stores because of this new surge in coronavirus cases…
On Friday, stocks slumped as second wave fears were reignited following a report that Apple would temporarily shutter 11 U.S. retail stores across Florida, Arizona, North Carolina and South Carolina.”Due to current COVID-19 conditions in some of the communities we serve, we are temporarily closing stores in these areas,” an Apple spokesman said in a statement.“We take this step with an abundance of caution as we closely monitor the situation and we look forward to having our teams and customers back as soon as possible.” Fast forward to today, when with stocks already sliding on renewed virus of a second wave of virus infections, moments ago Apple reported that it would re-close another 7 stores in Houston and Texas due to the coronavirus spike.
According to the optimists, this wasn’t supposed to happen. The worst part of this pandemic was supposed to be over, and it was supposed to be all downhill from here.
We are primarily funded by readers. Please subscribe and donate to support us!
But instead it has become exceedingly clear that this virus will be with us for a long time to come. New York, New Jersey and Connecticut have all announced that those traveling in from nine different states where COVID-19 is out of control will be forced into mandatory quarantine for 14 days, and police in New York will actually be actively searching for vehicles that have license plates from those particular states…
In New York, cops will stop cars with license plates from the affected states to ask the person why they are not quarantining and how long they have been in the state for. The quarantine applies to any state with infection rate of 10 infections per 100,000 people on a seven day rolling average or 10 percent of the total population testing positive.
Speaking of New York, this pandemic has already had a much larger financial impact than most observers had anticipated.
In particular, New York City is facing a nine billion dollar reduction in tax revenue, and Mayor Bill de Blasio says that the city may be forced to let 22,000 workers go…
New York Mayor Bill de Blasio said the city is considering 22,000 layoffs and furloughs among its 326,000 employees to cut $1 billion of expenses after lockdown-related revenue losses. De Blasio has projected a $9 billion loss in tax revenue over the next two years because of the pandemic.
Sadly, a whole lot more government workers will be fired across the country before this crisis is over.
Of course things are even worse for the private sector, and we continue to get more examples of this every single day. On Tuesday, we learned that GNC has decided to declare bankruptcy…
GNC Holdings Inc., which filed for Chapter 11 bankruptcy protection late Tuesday, has released an initial list of stores that will close. The list posted at the Pittsburgh-based chain’s site, GNCevolution.com, includes 248 closing stores, including 219 U.S. locations and 29 in Canada.
And we have also just learned that the end may be near for Chuck E. Cheese…
The coronavirus pandemic could spell the end of Chuck E. Cheese. The popular kid’s restaurant had to close its 610 locations nationwide during the outbreak. Now, $1 billion in debt has Chuck E. Cheese’s parent company, CEC Entertainment, approaching bankruptcy. The Wall Street Journal reports that CEC is asking lenders for a $200 million to keep its business going.
I haven’t been to a Chuck E. Cheese in many years, but when I was a kid I absolutely loved to eat there.
As a youngster, it seemed like such a magical place, and now it deeply saddens me to hear that the company may not survive.
In the end, a lot more iconic companies will go under as America plunges even deeper into this new economic depression.
Fear of a virus has turned our economy completely upside down, and thanks to the mainstream media much of the population is going to remain deathly afraid of this virus for the foreseeable future.


investmentwatchblog--2020-06-25--Retail investors finally went all in… yesterday. They loaded up on leveraged long ETFs and dumped le

Retail investors finally went all in… yesterday. They loaded up on leveraged long ETFs and dumped leveraged short ETFs. As a result, the Rydex Total Leveraged Bull / Bear Ratio is now more extreme than at the February peak. pic.twitter.com/21ptAzLqJI — Yuriy Matso (@yuriymatso) June 24, 2020
I can't believe I missed this up til now. That's a MASSIVE divergence. Now let's keep in mind that this IS the Nasdaq we're talking about here, which as we all know has supernatural powers that enable it to defy every bearish technical indication known to man. But wow. $NQ_F pic.twitter.com/dYFPqJDZun — Apollo Trading (@apollotradingsd) June 24, 2020
"The disconnect between economic reality and what is happening in the market is starting to close a little. That was really to be expected as we have seen one headline after another raise concern. That will have a real economic effect."#FoxBusiness t.co/GBZmvNTowI pic.twitter.com/1mMfgddr9m — Danielle DiMartino Booth (@DiMartinoBooth) June 25, 2020
US equities comfortably and consistently outperformed global equities over the past decade. The next decade will not be so easy…
t.co/QS4ZQBcw0A pic.twitter.com/njRpMd5RnN — Topdown Charts (@topdowncharts) June 24, 2020
Comps shoring up cash to survive coronavirus pandemic have raised >$50bn in US high-yield debt market in Jun, marking fastest monthly pace ever, BBG says. The milestone came amid sales by American Airlines and Dish Network on Wed that pushed total to $51.9bn. pic.twitter.com/BERCee4KF8 — Holger Zschaepitz (@Schuldensuehner) June 24, 2020
Lol it will be this year. t.co/4sFKilphBC — Hoz (@Hoz94s) June 24, 2020
HTZ CDS Auction values bonds at 26 cents. This implies an equity value of about -$3BN — zerohedge (@zerohedge) June 24, 2020


investmentwatchblog--2020-06-25--We’ve Been Here Before – And It Ended With An Epic Crash

Wolf Richter just published some charts that , for anyone with a sense of stock market history , are pretty ominous .
It seems that the major market indexes that recently soared back to record highs are being elevated by an amazingly small number of stocks – Apple , Microsoft , Amazon , Google and Facebook to be specific — which he calls the “ Giant 5.
” These stocks now account for nearly one-fifth of the Wilshire 5000 stock index ’ s value : That kind of dependence on just a handful of companies is intuitively scary .
What @ @ @ @ @ @ @ ’ ve been here before , and each time the result was ugly .
In the 1960s and early 1970s the US stock market was dominated by a group of large-cap stocks that took on a life of their own , elevating the market far beyond what it would have been without them .
See if this Investopedia entry sounds familiar : The Nifty 50 refers to the fifty most popular large-cap stocks that traded at high valuations in the 1960s and 1970s .
They included household names such as Xerox ( XRX @ @ @ @ @ @ @ ( KO ) .
Due to their proven growth records and continual increases in dividends , the Nifty Fifty were viewed as “ one-decision ” picks : investors were told to buy and never sell .
Many Nifty 50 stocks sported price-to-earnings ( P/E ) ratios as high as 100 times earnings .
They propelled the bull market of the early 1970s , only to come crashing down in the 1973-74 bear market .
Then in the 1990s , a group of Big Tech stocks strikingly similar to today ’ s Giant 5 @ @ @ @ @ @ @ global significance : In May 1999 , former Fed Chair Paul Volcker told an audience , “ The fate of the world economy is now totally dependent on the growth of the U.S. economy , which is dependent on the stock market , whose growth is dependent on about 50 stocks , half of which have never reported any earnings.
” Volcker saw the bubble .
Greenspan missed it .
Just a few weeks after Volcker ’ s speech , Greenspan testified before Congress , saying “ Bubbles generally are perceptible only after @ @ @ @ @ @ @ in advance requires a judgment that hundreds of thousands of informed investors have it all wrong .
Betting against markets is usually precarious at best.
” But the so-called “ informed investors ” were acting in response to Greenspan ’ s policy of lowering rates to help the financial markets .
In 2000 , inevitably , the bubble popped .
Minutes of FOMC meetings show that Greenspan was blind to the fact that the market had been racing up precisely because of his reckless monetary policy .
The market crash ruined many naive @ @ @ @ @ @ @ to take issue with Greenspan ’ s beloved productivity growth .
One found that productivity had actually decreased during the late 1990s .
Here ’ s what happened to the Nasdaq index when that generation of Big Tech stocks returned to their intrinsic value in 2000 : Now back to the current variation on this theme , which Wolf Richter summarizes as follows : This is how dependent the stock market , and broad portfolios reflecting it , have become on the “ Giant 5.
” It ’ s not that there aren @ @ @ @ @ @ @ that have gained as much or more than the “ Giant 5 ” in percentage terms – there are – but in dollar terms , and in weight in the market , they just don ’ t measure up to these five giants .
Apple and Microsoft both are now worth over $ 1.5 trillion .
Amazon is at nearly $ 1.4 trillion , Alphabet at $ 1.0 trillion .
These are gigantic valuations .
They also speak of an immense concentration of power in a single company .
Among the losers in @ @ @ @ @ @ @ that used to be the largest in the US stock market , such as Exxon-Mobile , which since January 26 , 2018 , has lost 48 % of its value .
The entire and once vast oil-and-gas sector has gotten crushed .
The market , and broad portfolios , are immensely dependent on the Giant 5 .
That was great on the way up – on their way to becoming giants , when their share of the overall market doubled in three-and-a-half years , from 10 % in January 2017 to nearly 20 @ @ @ @ @ @ @ off – there are myriad reasons why giants sell off , as all prior giants have found out – the impact of these five companies is going to be proportional to their giant size .

BY JOHN RUBINO
Wolf Richter just published some charts that, for anyone with a sense of stock market history, are pretty ominous. It seems that the major market indexes that recently soared back to record highs are being elevated by an amazingly small number of stocks – Apple, Microsoft, Amazon, Google and Facebook to be specific — which he calls the “Giant 5.” These stocks now account for nearly one-fifth of the Wilshire 5000 stock index’s value:
That kind of dependence on just a handful of companies is intuitively scary. What’s even scarier is that we’ve been here before, and each time the result was ugly.
In the 1960s and early 1970s the US stock market was dominated by a group of large-cap stocks that took on a life of their own, elevating the market far beyond what it would have been without them. See if this Investopedia entry sounds familiar:
We are primarily funded by readers. Please subscribe and donate to support us!
The Nifty 50 refers to the fifty most popular large-cap stocks that traded at high valuations in the 1960s and 1970s. They included household names such as Xerox (XRX), IBM, Polaroid and Coca-Cola (KO). Due to their proven growth records and continual increases in dividends, the Nifty Fifty were viewed as “one-decision” picks: investors were told to buy and never sell. Many Nifty 50 stocks sported price-to-earnings (P/E) ratios as high as 100 times earnings. They propelled the bull market of the early 1970s, only to come crashing down in the 1973-74 bear market.
Then in the 1990s, a group of Big Tech stocks strikingly similar to today’s Giant 5 so dominated the market that they gained global significance:
From Bill Fleckenstein’s book Greenspan’s Bubbles: In May 1999, former Fed Chair Paul Volcker told an audience, “The fate of the world economy is now totally dependent on the growth of the U.S. economy, which is dependent on the stock market, whose growth is dependent on about 50 stocks, half of which have never reported any earnings.” Volcker saw the bubble. Greenspan missed it. Just a few weeks after Volcker’s speech, Greenspan testified before Congress, saying “Bubbles generally are perceptible only after the fact. To spot a bubble in advance requires a judgment that hundreds of thousands of informed investors have it all wrong. Betting against markets is usually precarious at best.” But the so-called “informed investors” were acting in response to Greenspan’s policy of lowering rates to help the financial markets. In 2000, inevitably, the bubble popped. Minutes of FOMC meetings show that Greenspan was blind to the fact that the market had been racing up precisely because of his reckless monetary policy. The market crash ruined many naive speculators. Meanwhile, economic researchers began to take issue with Greenspan’s beloved productivity growth. One found that productivity had actually decreased during the late 1990s.
Here’s what happened to the Nasdaq index when that generation of Big Tech stocks returned to their intrinsic value in 2000:
Now back to the current variation on this theme, which Wolf Richter summarizes as follows:
This is how dependent the stock market, and broad portfolios reflecting it, have become on the “Giant 5.” It’s not that there aren’t a bunch of other companies that have gained as much or more than the “Giant 5” in percentage terms – there are – but in dollar terms, and in weight in the market, they just don’t measure up to these five giants. Apple and Microsoft both are now worth over $1.5 trillion. Amazon is at nearly $1.4 trillion, Alphabet at $1.0 trillion. These are gigantic valuations. They also speak of an immense concentration of power in a single company. Among the losers in that rest of the market are companies that used to be the largest in the US stock market, such as Exxon-Mobile, which since January 26, 2018, has lost 48% of its value. The entire and once vast oil-and-gas sector has gotten crushed. The market, and broad portfolios, are immensely dependent on the Giant 5. That was great on the way up – on their way to becoming giants, when their share of the overall market doubled in three-and-a-half years, from 10% in January 2017 to nearly 20% today. But if they sell off – there are myriad reasons why giants sell off, as all prior giants have found out – the impact of these five companies is going to be proportional to their giant size.


investmentwatchblog--2020-06-25--Nike Is A Great Business But A Risky Stock

At the bottom of the article , there is a video version for those that prefer watching .
The management is doing expensive buybacks and other financial engineering moves to keep the perspective of a growth stock .
Nike has returned more than 25 % per year to shareholders over the past 35 years .
Nike ( NKE ) is not a good buy because the market is pricing in the expectation that future growth will be similar to past growth .
That is very exuberant due to the concerns related to current and future growth .
However , Nike @ @ @ @ @ @ @ never know how such stocks are going to be priced over the long term .
In this Nike stock analysis , we are going to discuss : • The 5 key factors indicating why Nike is a great business and , consequently , has been a great stock to own .
It rewarded shareholders that bought in 1985 with more than 700 times their money .
• How Nike might not be a great investment in the coming decade as it has been over the last decades due to a slowdown in growth @ @ @ @ @ @ @ usually leads to mostly short-term benefits .
• Within the investment thesis conclusion , based on the discussed fundamentals , we ’ ll share the key factors you have to watch if you are a Nike investor .
Nike stock – 5 Fundamentals that make Nike a great business to own The 5 characteristics a great business has are the following : • No need for much capital Nike ’ s dividend has been constantly growing as the business and earnings expand .
A growing dividend is an indication of great business as @ @ @ @ @ @ @ the quality of the business model .
It also shows how the company has enough free cash flow to reward shareholders .
This might be counterintuitive , but low book value is another great business indicator .
A low book value shows how Nike doesn ’ t need much capital to do business and grow where the earned money is to reward shareholders .
Despite the relatively low book value , Nike is not in financial distress .
Its Altman-Z score is far from a level below 1.81 that would indicate distress .
@ @ @ @ @ @ @ capital ( ROCE ) and Nike ’ s returns are staggering .
With a high ROCE , a company that can grow revenues at high single digits , improve net profit margins over time , and , consequently , improve earnings at teen digits , as Nike did , can only result in a great investment over time .
With the capacity of investing your capital with a high return , it pays to grow as fast as you can , which is what Nike has been doing .
Plus , apart from @ @ @ @ @ @ @ been capable of expanding margins and profits even more .
Nike ’ s net profit margin expanded from the high single digits in the 2000s to the low teens over the last few years .
Just the margin expansion adds $ 1 billion to yearly profits .
Further , thanks to buybacks , earnings and dividends per share grew at an even faster pace than revenues and net income which is good for the stock .
However , this was the past as it has been great .
Let ’ s look at @ @ @ @ @ @ @ most likely not be as great for investors as the last few decades have been .
Nike stock price outlook – slower growth and valuation are the issues Average revenue growth has been 6.17 % over the last 5 years .
It represents a significant decline from teen growth rates that were the norm in the past .
When we combine the slower growth rate with the exuberant valuation , it creates a high-risk investing situation .
Let me use $ 3 per share as the owner ’ s earnings , which would @ @ @ @ @ @ @ the coronavirus .
At a price of $ 100 that would give a price to earnings ratio of 33 .
Thus , the investment returns investors can expect are around just 3 % .
Expectations for higher investment returns are based on growth .
Buying something with a lofty valuation just because of good growth prospects is risky because the stock gets hit very hard if the growth expectations aren ’ t met and we have already seen Nike ’ s revenue slowing down .
Plus , Visa ( V ) is a @ @ @ @ @ @ @ revenue growth is 15 % per year but trades at a similar valuation to Nike ’ s .
Nike ’ s issue is the slower growth rate that is around 6 % .
The management is trying to do what is possible to ensure at least higher earnings growth .
Over the last 10 years , the company has bought back around 20 % of shares outstanding and , consequently , increased earnings per share .
But , 10 years ago , the share price was below $ 20 which made it 80 @ @ @ @ @ @ @ consequently , improve investment metrics .
Further , the company changed its revenue recognition method in 2018 .
They decided to recognize revenue on shipment and not on delivery .
Given that e-commerce is growing fast , recognizing revenue on shipment might keep the image of faster revenue growth as it doesn ’ t account for returns immediately .
The revenue recognition change might just be a curious fact , but it is one that raises an eyebrow and tells us we have to watch the amount of financial engineering the company will @ @ @ @ @ @ @ it comes to investing in great businesses , the question is always whether the future will be of resemblance to the past ?
Unfortunately , each company has a life cycle and that , in the best scenario , a growth company turns from a fast grower into a slow-growth cash machine .
You can take Apple ( AAPL ) as a good example of that .
The only difference is that , in 2016 , AAPL ’ s price to earnings ratio was around 10 and not above 30 like it is @ @ @ @ @ @ @ high valuation is the prime risk for the company as slight changes in the market ’ s perception on Nike ’ s future growth prospects could have a high impact on investment returns .
I will personally avoid Nike and look for better risk reward opportunities even if Nike is and will definitely remain a great business .
The above doesn ’ t mean Nike ’ s stock will fall .
In the current ‘ free money ’ environment , the market might remain exuberant about the 1 % dividend yield that looks @ @ @ @ @ @ @ ahead .
I just hope that this analysis gives you a different perspective on Nike , a new factor to carefully watch and that it helps you with assessing the value of the stock to your portfolio .
For those that prefer watching or listening , here is the video : If you enjoyed the analysis and investment perspective , please consider subscribing .
Disclosure : I/we have no positions in any stocks mentioned , and no plans to initiate any positions within the next 72 hours .
I wrote this article myself @ @ @ @ @ @ @ .
I am not receiving compensation for it .
I have no business relationship with any company whose stock is mentioned in this article .

by Sven Carlin
At the bottom of the article, there is a video version for those that prefer watching.
The management is doing expensive buybacks and other financial engineering moves to keep the perspective of a growth stock.
Nike has returned more than 25% per year to shareholders over the past 35 years.
Nike (NKE) is not a good buy because the market is pricing in the expectation that future growth will be similar to past growth. That is very exuberant due to the concerns related to current and future growth. However, Nike is definitely a great business and you never know how such stocks are going to be priced over the long term.
In this Nike stock analysis, we are going to discuss:
The 5 key factors indicating why Nike is a great business and, consequently, has been a great stock to own. It rewarded shareholders that bought in 1985 with more than 700 times their money.
How Nike might not be a great investment in the coming decade as it has been over the last decades due to a slowdown in growth and an increase in financial engineering that usually leads to mostly short-term benefits.
Within the investment thesis conclusion, based on the discussed fundamentals, we’ll share the key factors you have to watch if you are a Nike investor.
Nike stock – 5 Fundamentals that make Nike a great business to own
The 5 characteristics a great business has are the following:
A growing dividend
No need for much capital
Extreme financial stability
High return on capital employed (ROCE)
Fast-growing revenues and faster-growing profits
Dividend
Nike’s dividend has been constantly growing as the business and earnings expand.
Nike’s dividend since 2004
A growing dividend is an indication of great business as growth comes alongside increased profits, confirming the quality of the business model. It also shows how the company has enough free cash flow to reward shareholders.
Book Value
This might be counterintuitive, but low book value is another great business indicator. A low book value shows how Nike doesn’t need much capital to do business and grow where the earned money is to reward shareholders.
Nike stock book value
Nike’s financial stability
Despite the relatively low book value, Nike is not in financial distress. Its Altman-Z score is far from a level below 1.81 that would indicate distress.
Nike stock – Altman-Z
High ROCE
Great businesses have high returns on employed capital (ROCE) and Nike’s returns are staggering.
We are primarily funded by readers. Please subscribe and donate to support us!
Nike stock – ROCE
With a high ROCE, a company that can grow revenues at high single digits, improve net profit margins over time, and, consequently, improve earnings at teen digits, as Nike did, can only result in a great investment over time.
Growth in revenues, earnings, and margins
With the capacity of investing your capital with a high return, it pays to grow as fast as you can, which is what Nike has been doing. Plus, apart from expanding its business, the management has been capable of expanding margins and profits even more.
Nike stock – revenue growth, net profit margins, and net income
Nike’s net profit margin expanded from the high single digits in the 2000s to the low teens over the last few years. Just the margin expansion adds $1 billion to yearly profits. Further, thanks to buybacks, earnings and dividends per share grew at an even faster pace than revenues and net income which is good for the stock.
Nike stock – owner’s earnings per share
However, this was the past as it has been great. Let’s look at the future, a future that will most likely not be as great for investors as the last few decades have been.
Nike stock price outlook – slower growth and valuation are the issues
Average revenue growth has been 6.17% over the last 5 years. It represents a significant decline from teen growth rates that were the norm in the past.
Nike stock analysis – growth rate
When we combine the slower growth rate with the exuberant valuation, it creates a high-risk investing situation. Let me use $3 per share as the owner’s earnings, which would be a likely level for 2020 without the coronavirus. At a price of $100 that would give a price to earnings ratio of 33. Thus, the investment returns investors can expect are around just 3%. Expectations for higher investment returns are based on growth.
Buying something with a lofty valuation just because of good growth prospects is risky because the stock gets hit very hard if the growth expectations aren’t met and we have already seen Nike’s revenue slowing down. Plus, Visa (V) is a business that I analyzed where the expected revenue growth is 15% per year but trades at a similar valuation to Nike’s.
Nike’s issue is the slower growth rate that is around 6%. The management is trying to do what is possible to ensure at least higher earnings growth. Over the last 10 years, the company has bought back around 20% of shares outstanding and, consequently, increased earnings per share. But, 10 years ago, the share price was below $20 which made it 80% cheaper to do buybacks and, consequently, improve investment metrics.
Further, the company changed its revenue recognition method in 2018. They decided to recognize revenue on shipment and not on delivery. Given that e-commerce is growing fast, recognizing revenue on shipment might keep the image of faster revenue growth as it doesn’t account for returns immediately.
Source: Nike 10-K 2019
The revenue recognition change might just be a curious fact, but it is one that raises an eyebrow and tells us we have to watch the amount of financial engineering the company will be doing in the future.
Investment Conclusion
When it comes to investing in great businesses, the question is always whether the future will be of resemblance to the past? Unfortunately, each company has a life cycle and that, in the best scenario, a growth company turns from a fast grower into a slow-growth cash machine. You can take Apple (AAPL) as a good example of that. The only difference is that, in 2016, AAPL’s price to earnings ratio was around 10 and not above 30 like it is the case with Nike now. The high valuation is the prime risk for the company as slight changes in the market’s perception on Nike’s future growth prospects could have a high impact on investment returns.
I will personally avoid Nike and look for better risk reward opportunities even if Nike is and will definitely remain a great business. The above doesn’t mean Nike’s stock will fall. In the current ‘free money’ environment, the market might remain exuberant about the 1% dividend yield that looks amazing compared to Treasuries and slow growth ahead. I just hope that this analysis gives you a different perspective on Nike, a new factor to carefully watch and that it helps you with assessing the value of the stock to your portfolio.
For those that prefer watching or listening, here is the video:
If you enjoyed the analysis and investment perspective, please consider subscribing.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.


investmentwatchblog--2020-06-25--CAN TOO BIG FOR FED & ECB

CAN TOO BIG FOR FED & ECB

There are lies , damned lies , and economists .
Whether these economists work for the government or a bank , they spend all their time on the computer extrapolating current trends with minor adjustments .
If you want to understand the future , don ’ t spend your life preparing and constantly revising an Excel sheet with masses of economic data .
Collective human behaviour is extremely predictable .
But not by spreadsheet analysis but by studying history .
HISTORY IS A BETTER FORECASTER THAN ECONOMISTS There just is nothing new under the sun .
So why is there @ @ @ @ @ @ @ the world to make economic forecasts that are no better than a random job by a few chimps ?
Instead , give some lateral thinkers a few history books and let them study the rise and decline of the major empires in history .
That will tell them more about long term economic forecasts than any spreadsheet .
After a 50 year decline of the US economy and the dollar , we still hear about the V-shaped recovery being imminent .
On what planet do these people live who believe that a world @ @ @ @ @ @ @ social collapse is going to see a miraculous recovery out of the blue .
This is the problem with a system that is totally fake and dependant on constant flow of stimulus even though it has zero value .
Most people are fooled and believe it is for real .
ALL EMPIRES END WITH COLLAPSING CURRENCY AND SURGING DEBTS We are now in the final stages of the end game .
The end of the end could be extended affairs or they could be extremely quick .
Most declines of major cycles are @ @ @ @ @ @ @ half a century .
During that time the dollar is down 50 % against the DM/Euro and 78 % vs the Swiss franc .
And US debt has gone up 65x since 1971 from $ 400B to $ 26T .
A collapsing currency and surging debts are how all empires end .
But the end of the end has also been drawn out and started in 2006 with the Great Financial Crisis .
The financial system was on the verge of collapse in 2008 but was miraculously rescued with tens of trillions of @ @ @ @ @ @ @ Central banks have since then frenetically kept the party going by manufacturing worthless paper money .
The music should have stopped in 2008 but the participants are still dancing on the grave of a system that is about to succumb .
The degree of the coming disintegration of the world economy will only be known with certainty by future historians .
What is clear though is that we are seeing the end of a major cycle .
What we will experience next is not just the fall of one nation but of most @ @ @ @ @ @ @ developing countries .
Debt is a global problem that virtually every country is seriously affected by .
When the financial system crumbles so will world trade .
WHAT WILL HAPPEN NEXT ?
Asset Bubbles can only end in one of two ways : Either they Implode or they Explode The principal bubbles we are here talking about is the financial system , stock markets , bond markets , and property .
So in principle , we are looking at two options for this era to end .
The net result is always the @ @ @ @ @ @ @ the more violent and lead to a quicker massacre than the Implosion .
The risk of an Explosive end is very high .
That would most probably involve acute problems in the banking system leading to a major bank defaulting , say Deutsche Bank .
This would spread throughout the whole banking system like wildfire and obviously also affect the derivatives bubble of $ 1.5+ quadrillion .
It would happen so quickly that central banks wouldn ’ t be able to print money fast enough to stop it .
In any case , @ @ @ @ @ @ @ that point that any freshly printed money would have ZERO value and therefore ZERO effect .
An Explosive outcome of this 100-year bubble-era would clearly be cataclysmic for the world .
It would lead to a global deflationary depression of a magnitude never seen before .
It would also take life back to a level of devastation and deprivation that would be unimaginable today .
The only difference with an Implosive outcome is that it would take longer and therefore involve both hope and pain as desperate central banks create trillions and quadrillions @ @ @ @ @ @ @ temporarily keep the balloon inflated .
Even though this process would be more drawn out , it would also fail in the end .
First , there would be a brief period , maybe a couple of years , of hyperinflation before it would end in a deflationary collapse .
So these are the two options .
There is absolutely nothing that can stop it .
Well , we always have Deus ex Machina of course .
Yes , miracles can always happen and the world would certainly need one this time .
@ @ @ @ @ @ @ favour of these kinds of wonders .
WHAT WE KNOW • Coronavirus is a convenient excuse but not the cause of the current problems .
CV was a catalyst but the real crisis this time started in Aug-Sep 2019 with the Fed and ECB panicking .
• The real problem is excessive debt at all levels of the economy , sovereign , corporate , financial , and personal .
Governments and CBs have created the debt and are now desperately trying to remedy their mistake by doing more of the thing that created @ @ @ @ @ @ @ “ We can not solve our problems with the same thinking that we used when we created them ” .
• But CBs have no other tools .
Rates are already zero and making them negative means you would have to pay for lending money to a bankrupt borrower .
There are clearly more attractive investments which I will discuss later .
• Unemployment is currently in the 100s of millions globally .
Many people now earn more by not working and would be allergic to having to work for the money in @ @ @ @ @ @ @ percentage of the lost jobs will not come back in the world .
• Businesses , big and small , are failing .
1000s of companies are going under in all sectors .
Total losses will easily be in the $ trillions .
• Bad loans surging as companies and individuals can neither afford to pay interest or installments .
In the US , it is estimated that no payments have been made on over 100 million loans .
• Half of Americans consider selling their houses to survive financially .
Most Americans @ @ @ @ @ @ @ more than two weeks of spending .
• Global printing presses are working 24/7 to save the world from perdition .
Since CV started , the total fiscal and monetary stimulus so far is $ 18T .
• The $ 18T stimulus could easily double .
But “ just ” $ 18T is a massive 22.5 % of global GDP .
The above list of problems is just an example of the global pressures on states , companies , and individuals that either are bankrupt or will collapse under the weight of their @ @ @ @ @ @ @ .
WHAT THE EFFECTS WILL BE • As I have already discussed in this article , there is no solution to a global debt problem in a world that is collectively bankrupt .
• The $ 18T stimulus that has just been created is not real money .
It is monopoly money that might be useful if you play the Monopoly board game but it has zero value in the real world .
So throwing $ 18T of fake money at $ 275T global debt ( which can ’ t be repaid either @ @ @ @ @ @ @ few weeks .
It is certainly fooling retail stock investors who are being lured into the biggest suckers ’ rally in history .
They will soon have the shock of a lifetime .
• Virtually all asset markets will collapse , including stocks and property .
But the biggest devastation will be when bond and credit markets implode .
When that happens the $ 2quadrillion derivative market will go up in smoke too with devastating consequences for the world .
• Whether we finish with an explosion or implosion makes little difference to @ @ @ @ @ @ @ a hyperinflationary explosion first , which I believe is more likely .
But that would soon end in a depressionary and deflationary implosion .
This will take the world back at least 50 years in production and trade terms and thus also in the standard of living .
But before the decline stops , there will be massive financial and human suffering in the world , including social unrest and probably wars .
• I was with one of my grandsons yesterday who wanted to photograph a peregrine falcon ’ s nest .
@ @ @ @ @ @ @ ( 240mph ) to hit their prey which can be a pigeon for example .
The poor pigeon doesn ’ t know what has hit him when the world ’ s fastest animal comes diving from above at 390km/h .
If the economic bubble explodes as I have described above , the world will not know what has hit it either .
It will all happen so fast .
WHAT WE SHOULD DO Most people sadly can not plan for what is coming .
They don ’ t have any savings and might @ @ @ @ @ @ @ house or apartment .
For the ones with small savings , even if it is only a few hundred dollars , take it out of the bank and buy some silver or gold bars or coins .
One gramme of gold costs $ 60-70 .
One gramme of silver costs 70 cents and an ounce of silver costs $ 20 .
Many people can afford that and what today looks like small investments could save your life in a few years .
Just ask the Venezuelans .
For bigger investors , get out @ @ @ @ @ @ @ silver stocks , and get out of bonds and investment properties .
On your own home , pay down the mortgage if you can .
And obviously , buy as much physical gold and silver that you can afford and store it outside the banking system .
Gold and silver will work effectively as wealth protection both in inflation and deflation .
In a period of crisis , your best asset and support system is a close circle of friends and family .
This is what will keep you going physically , mentally @ @ @ @ @ @ @ market in stocks ended in February 2020 .
We have now entered a secular and devastating bear market .
The first leg down finished in mid-March and we are just finishing the suckers ’ rally that makes retail investors uber-optimistic .
The next leg down is imminent .
It will shock the world .
There could be a vicious catalyst .
The move up to $ 1,950 – $ 2,100 has started .
We could see an acceleration starting soon .
Once gold clears $ 2,000 much higher values are coming .
For @ @ @ @ @ @ @ , I hardly need to repeat that you mustn ’ t focus on the price of gold or silver measured in soon worthless paper currencies .
Just own physical precious metals for insurance and wealth preservation .
Measured in overvalued paper money , gold and silver are absurdly cheap .

There are lies, damned lies, and economists. Whether these economists work for the government or a bank, they spend all their time on the computer extrapolating current trends with minor adjustments.
If you want to understand the future, don’t spend your life preparing and constantly revising an Excel sheet with masses of economic data. Collective human behaviour is extremely predictable. But not by spreadsheet analysis but by studying history.
HISTORY IS A BETTER FORECASTER THAN ECONOMISTS
There just is nothing new under the sun. So why is there so much time and money wasted around the world to make economic forecasts that are no better than a random job by a few chimps?
Instead, give some lateral thinkers a few history books and let them study the rise and decline of the major empires in history. That will tell them more about long term economic forecasts than any spreadsheet.
After a 50 year decline of the US economy and the dollar, we still hear about the V-shaped recovery being imminent.
On what planet do these people live who believe that a world on the cusp of an economic and social collapse is going to see a miraculous recovery out of the blue.
This is the problem with a system that is totally fake and dependant on constant flow of stimulus even though it has zero value. Most people are fooled and believe it is for real.
ALL EMPIRES END WITH COLLAPSING CURRENCY AND SURGING DEBTS
We are now in the final stages of the end game. The end of the end could be extended affairs or they could be extremely quick. Most declines of major cycles are drawn out and this one has lasted half a century. During that time the dollar is down 50% against the DM/Euro and 78% vs the Swiss franc. And US debt has gone up 65x since 1971 from $400B to $26T. A collapsing currency and surging debts are how all empires end.
But the end of the end has also been drawn out and started in 2006 with the Great Financial Crisis. The financial system was on the verge of collapse in 2008 but was miraculously rescued with tens of trillions of dollars in printed money and guarantees.
Central banks have since then frenetically kept the party going by manufacturing worthless paper money. The music should have stopped in 2008 but the participants are still dancing on the grave of a system that is about to succumb.
The degree of the coming disintegration of the world economy will only be known with certainty by future historians. What is clear though is that we are seeing the end of a major cycle. What we will experience next is not just the fall of one nation but of most nations on earth, both advanced and developing countries. Debt is a global problem that virtually every country is seriously affected by. When the financial system crumbles so will world trade.
WHAT WILL HAPPEN NEXT?
Asset Bubbles can only end in one of two ways: Either they Implode or they Explode
The principal bubbles we are here talking about is the financial system, stock markets, bond markets, and property. So in principle, we are looking at two options for this era to end.
The net result is always the same although the Explosion finale will be the more violent and lead to a quicker massacre than the Implosion.
Explosion
The risk of an Explosive end is very high. That would most probably involve acute problems in the banking system leading to a major bank defaulting, say Deutsche Bank. This would spread throughout the whole banking system like wildfire and obviously also affect the derivatives bubble of $1.5+ quadrillion. It would happen so quickly that central banks wouldn’t be able to print money fast enough to stop it. In any case, the whole financial world would know at that point that any freshly printed money would have ZERO value and therefore ZERO effect.
An Explosive outcome of this 100-year bubble-era would clearly be cataclysmic for the world. It would lead to a global deflationary depression of a magnitude never seen before. It would also take life back to a level of devastation and deprivation that would be unimaginable today.
We are primarily funded by readers. Please subscribe and donate to support us!
Implosion
The only difference with an Implosive outcome is that it would take longer and therefore involve both hope and pain as desperate central banks create trillions and quadrillions of worthless dollars, euros etc to temporarily keep the balloon inflated.
Even though this process would be more drawn out, it would also fail in the end. First, there would be a brief period, maybe a couple of years, of hyperinflation before it would end in a deflationary collapse.
So these are the two options. There is absolutely nothing that can stop it. Well, we always have Deus ex Machina of course. Yes, miracles can always happen and the world would certainly need one this time. But sadly the odds are not in favour of these kinds of wonders.
WHAT WE KNOW
Coronavirus is a convenient excuse but not the cause of the current problems. CV was a catalyst but the real crisis this time started in Aug-Sep 2019 with the Fed and ECB panicking.
The real problem is excessive debt at all levels of the economy, sovereign, corporate, financial, and personal. Governments and CBs have created the debt and are now desperately trying to remedy their mistake by doing more of the thing that created it all. As Einstein said, “We cannot solve our problems with the same thinking that we used when we created them”.
But CBs have no other tools . Rates are already zero and making them negative means you would have to pay for lending money to a bankrupt borrower. There are clearly more attractive investments which I will discuss later.
. Rates are already zero and making them negative means you would have to pay for lending money to a bankrupt borrower. There are clearly more attractive investments which I will discuss later. Unemployment is currently in the 100s of millions globally. Many people now earn more by not working and would be allergic to having to work for the money in the future. Also, a high percentage of the lost jobs will not come back in the world.
46 million Americans, almost 30% of the US workforce, have filed unemployment claims since CV started. ILO (International Labour Organisation) estimates that almost 50% of the world’s labour force, in particular in developing countries could lose their jobs.
Businesses, big and small, are failing. 1000s of companies are going under in all sectors. Total losses will easily be in the $trillions.
As an example, the whole travel industry is on the verge of a total collapse. Carnival the cruise business just announced a $4.4 billion loss and the sale of 6 major cruise ships. Airlines and hotels are either going under or losing fortunes. Global tourism is a $5T market and with indirect support businesses making a $9.2T contribution to global GDP. Just imagine, here is an industry that represents 11% of global GDP that is hemorrhaging and will not recover in this decade at least. Another example is the Swiss watch industry which is important to the country. It lost 81% of exports in April and 68% in May compared to 2019. Another sector which will never be the same.
Bad loans surging as companies and individuals can neither afford to pay interest or installments. In the US, it is estimated that no payments have been made on over 100 million loans.
Half of Americans consider selling their houses to survive financially. Most Americans don’t have savings to cover more than two weeks of spending.
Global printing presses are working 24/7 to save the world from perdition. Since CV started, the total fiscal and monetary stimulus so far is $18T.
The $18T stimulus could easily double. But “just” $18T is a massive 22.5% of global GDP.
The 6 biggest money manufactures are:
US $6.5T, EU $3T, Japan $2.1T, China $1.2T, Italy $1.1T France $0.8T
The above list of problems is just an example of the global pressures on states, companies, and individuals that either are bankrupt or will collapse under the weight of their own debt in the next few years.
WHAT THE EFFECTS WILL BE
As I have already discussed in this article, there is no solution to a global debt problem in a world that is collectively bankrupt.
The $18T stimulus that has just been created is not real money. It is monopoly money that might be useful if you play the Monopoly board game but it has zero value in the real world. So throwing $18T of fake money at $275T global debt (which can’t be repaid either) might fool some people for a few weeks. It is certainly fooling retail stock investors who are being lured into the biggest suckers’ rally in history. They will soon have the shock of a lifetime.
Virtually all asset markets will collapse, including stocks and property. But the biggest devastation will be when bond and credit markets implode. When that happens the $2quadrillion derivative market will go up in smoke too with devastating consequences for the world.
Whether we finish with an explosion or implosion makes little difference to the end result. We could have a hyperinflationary explosion first, which I believe is more likely. But that would soon end in a depressionary and deflationary implosion. This will take the world back at least 50 years in production and trade terms and thus also in the standard of living. But before the decline stops, there will be massive financial and human suffering in the world, including social unrest and probably wars.
I was with one of my grandsons yesterday who wanted to photograph a peregrine falcon’s nest. These majestic birds can dive at 390km/h (240mph) to hit their prey which can be a pigeon for example. The poor pigeon doesn’t know what has hit him when the world’s fastest animal comes diving from above at 390km/h. If the economic bubble explodes as I have described above, the world will not know what has hit it either. It will all happen so fast.
WHAT WE SHOULD DO
Most people sadly cannot plan for what is coming. They don’t have any savings and might have problems affording to stay in their house or apartment.
For the ones with small savings, even if it is only a few hundred dollars, take it out of the bank and buy some silver or gold bars or coins. One gramme of gold costs $60-70. One gramme of silver costs 70 cents and an ounce of silver costs $20. Many people can afford that and what today looks like small investments could save your life in a few years. Just ask the Venezuelans.
For bigger investors, get out of stocks, except for gold and silver stocks, and get out of bonds and investment properties. On your own home, pay down the mortgage if you can.
And obviously, buy as much physical gold and silver that you can afford and store it outside the banking system.
Gold and silver will work effectively as wealth protection both in inflation and deflation.
In a period of crisis, your best asset and support system is a close circle of friends and family. This is what will keep you going physically, mentally, and morally.
MARKETS
Stocks
The secular bull market in stocks ended in February 2020. We have now entered a secular and devastating bear market. The first leg down finished in mid-March and we are just finishing the suckers’ rally that makes retail investors uber-optimistic. The next leg down is imminent. It will shock the world. There could be a vicious catalyst.
Gold & Silver
The move up to $1,950 – $2,100 has started. We could see an acceleration starting soon. Once gold clears $2,000 much higher values are coming.
For most people who know and follow me, I hardly need to repeat that you mustn’t focus on the price of gold or silver measured in soon worthless paper currencies. Just own physical precious metals for insurance and wealth preservation.
Measured in overvalued paper money, gold and silver are absurdly cheap.


investmentwatchblog--2020-06-25--Wirecard – I was so wrong! (my experience report)

So im one of those guys , who invested in Wirecard and want to share some of my experience .
Afterwards one is always smarter or what ’ s the word ?
With Wirecard , I was actually really wrong .
I think that you have to stand up for it and you should check whether you made a mistake in your investment decision .
I want to work through that in this report .
How did the investment come about , why did I hold on to the company despite the attacks of the short sellers and the reports @ @ @ @ @ @ @ how the result turns out in the end , it is always worth thinking about your bad investments and questioning yourself even more self-critically .
This is the only way , and I am convinced of this , to get ahead on the stock market .
Why did I invest in Wirecard at all ?
I actually stayed away from Wirecard for a long time .
I missed the price increases of the last few years .
Before contactless payment became more and more popular , I did not have this trend on @ @ @ @ @ @ @ continue to deal with the company .
In addition , until a few years ago I only and exclusively dealt with strong dividend payers .
That has changed somewhat in the last 3 years .
I have further developed myself and my investment style , as probably everyone does .
Then the Apple Watch came to my wrist and the possibility to pay contactlessly with the watch everywhere .
More and more people were doing it and the topic was more and more often covered in the media and relevant stock market magazines @ @ @ @ @ @ @ bank shares due to bad experiences , I had a gap in my portfolio .
How do you fill it now ?
I decided on system providers who have their foot very far in the door .
That was VISA on the one hand and Adyen and Wirecard on the other .
I liked the story at Wirecard .
Not least of all , that a man named Markus Braun is obviously such a passionate manager who managed to launch the store from nowhere into a world-famous corporation within a few years .
@ @ @ @ @ @ @ .
Due to the many untapped markets , the chance of a growth rocket emerged .
Despite the already immense price increases – there was still plenty of room for the next few years .
I dared the first small entry with 5 shares at a price of 135 Euro .
At some point , the time was when the short sellers attacked and the reports in the Financial Times about inconsistencies in the balance sheet .
For me it was a classic .
I thought : Hey , we ’ re talking @ @ @ @ @ @ @ else would you choose to attack from the DAX ?
The business is entangled and you need subcontractors or partners all over the world to be able to represent the transaction at all .
It is difficult to see through that , even if you do everything right .
A real find , then .
Moreover , the price of the share had long since been geared to the growth of the company .
That means that future growth was already priced in .
Such shares are increasingly susceptible to volatility as those @ @ @ @ @ @ @ reflects the business .
So what did I do ?
Repurchased , of course !
Why did I stick with Wirecard and what did I learn ?
I just couldn ’ t believe it .
It was beyond irrational .
If I have to realize that you can ’ t hide something like that forever , it should have been clear to a CEO of a DAX company long ago .
Besides , every year there was a certificate and economic report from the renowned auditors .
You look twice as much on @ @ @ @ @ @ @ Wrongly conceived !
That is the greatest learning in history .
You can not even trust the auditors to do their job properly .
I have closed my eyes for too long in good faith that there are too many functioning control bodies .
With my capabilities , I have to trust my gut .
But even large investment funds like DWS , which can have insight into the company at any time , have been deceived .
I am convinced that no small shareholder could have foreseen the fraud itself , but @ @ @ @ @ @ @ as shortsellers on a large scale start attacking a stock somewhere , I am OUT !
We small shareholders have even less insight than the big boys and then such an investment quickly turns into a gamble .
Since my money is too good for gambling I will keep my hands off such shares in the future .
There are so many wonderful opportunities and companies , it is not necessary to take such a ride on the cannonball .
What did I do with the Wirecard shares ?
I still have it @ @ @ @ @ @ @ Thursday , I still thought something was wrong .
Why does the auditor only come around the corner on the day the annual financial statements are published and say “ Hey , we ’ re missing 1.9 billion euros ” ?
I thought it was clearing up .
If I sell now , I ’ ll have massive losses and tomorrow the price will go through the roof .
On Friday , when it was clear that there was no 1.9 billion or the two banks did not know Wirecard as customers , @ @ @ @ @ @ @ All in all , I have never been heavily invested in Wirecard .
I had and have a total of 20 shares .
At a price of 80 euros I can sell them +/- 0 .
I have decided to sit out the dilemma .
I have mentally written off the money but who knows : Maybe there will be a turn around story with new management at some point or another company or bank will buy Wirecard .
In this sense , my thoughts are with those who had to cope with @ @ @ @ @ @ @ once again how important diversification is .
Do not put all your eggs in one basket .
A good guideline is certainly that no position in the portfolio should amount to more than 5 % .
I do very well with a maximum of 2-3 % .
But that also means a lot of work , as I have to deal with more and more companies all the time .
It is important that you do not let your head hang down and question whether company investments are the right investment .
To @ @ @ @ @ @ @ investing .
It is much more important to learn from it .
To look the facts in the eye and to question critically where you could have done something better yourself .
On the stock exchange , nothing is as important as experience – the good ones , and unfortunately also the bad ones !
Are you invested in Wirecard or have you sold at a loss ?
I am looking forward to your comment .
Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based @ @ @ @ @ @ @ Do you own due diligence .

by Random_Dude_20
So im one of those guys, who invested in Wirecard and want to share some of my experience.
Afterwards one is always smarter or what’s the word? With Wirecard, I was actually really wrong. I think that you have to stand up for it and you should check whether you made a mistake in your investment decision. I want to work through that in this report.
How did the investment come about, why did I hold on to the company despite the attacks of the short sellers and the reports of the Financial Times? No matter how the result turns out in the end, it is always worth thinking about your bad investments and questioning yourself even more self-critically. This is the only way, and I am convinced of this, to get ahead on the stock market.
Why did I invest in Wirecard at all?
I actually stayed away from Wirecard for a long time. I missed the price increases of the last few years. Before contactless payment became more and more popular, I did not have this trend on my screen. So I did not continue to deal with the company. In addition, until a few years ago I only and exclusively dealt with strong dividend payers. That has changed somewhat in the last 3 years. I have further developed myself and my investment style, as probably everyone does.
Then the Apple Watch came to my wrist and the possibility to pay contactlessly with the watch everywhere. More and more people were doing it and the topic was more and more often covered in the media and relevant stock market magazines. Since I don’t buy bank shares due to bad experiences, I had a gap in my portfolio. How do you fill it now? I decided on system providers who have their foot very far in the door. That was VISA on the one hand and Adyen and Wirecard on the other. I liked the story at Wirecard. Not least of all, that a man named Markus Braun is obviously such a passionate manager who managed to launch the store from nowhere into a world-famous corporation within a few years. Sales and profits knew only one direction. Due to the many untapped markets, the chance of a growth rocket emerged. Despite the already immense price increases – there was still plenty of room for the next few years. I dared the first small entry with 5 shares at a price of 135 Euro.
The shortsellers are coming
At some point, the time was when the short sellers attacked and the reports in the Financial Times about inconsistencies in the balance sheet. For me it was a classic. I thought: Hey, we’re talking about a DAX company here. Who else would you choose to attack from the DAX? The business is entangled and you need subcontractors or partners all over the world to be able to represent the transaction at all. It is difficult to see through that, even if you do everything right. A real find, then. Moreover, the price of the share had long since been geared to the growth of the company. That means that future growth was already priced in. Such shares are increasingly susceptible to volatility as those of solidly valued companies where the price reflects the business. So what did I do? Repurchased, of course!
Why did I stick with Wirecard and what did I learn?
I just couldn’t believe it. It was beyond irrational. If I have to realize that you can’t hide something like that forever, it should have been clear to a CEO of a DAX company long ago. Besides, every year there was a certificate and economic report from the renowned auditors. You look twice as much on the fingers of a DAX company.
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Wrongly conceived! That is the greatest learning in history. You cannot even trust the auditors to do their job properly. I have closed my eyes for too long in good faith that there are too many functioning control bodies. With my capabilities, I have to trust my gut. But even large investment funds like DWS, which can have insight into the company at any time, have been deceived.
I am convinced that no small shareholder could have foreseen the fraud itself, but I decided for myself that as soon as shortsellers on a large scale start attacking a stock somewhere, I am OUT! We small shareholders have even less insight than the big boys and then such an investment quickly turns into a gamble. Since my money is too good for gambling I will keep my hands off such shares in the future. There are so many wonderful opportunities and companies, it is not necessary to take such a ride on the cannonball.
What did I do with the Wirecard shares?
I still have it! At the first massive slide last Thursday, I still thought something was wrong. Why does the auditor only come around the corner on the day the annual financial statements are published and say “Hey, we’re missing 1.9 billion euros”? I thought it was clearing up. If I sell now, I’ll have massive losses and tomorrow the price will go through the roof. On Friday, when it was clear that there was no 1.9 billion or the two banks did not know Wirecard as customers, it was too late to sell. All in all, I have never been heavily invested in Wirecard. I had and have a total of 20 shares. At a price of 80 euros I can sell them +/- 0. I have decided to sit out the dilemma. I have mentally written off the money but who knows: Maybe there will be a turn around story with new management at some point or another company or bank will buy Wirecard.
In this sense, my thoughts are with those who had to cope with high losses with Wirecard. It shows once again how important diversification is. Do not put all your eggs in one basket. A good guideline is certainly that no position in the portfolio should amount to more than 5%. I do very well with a maximum of 2-3 %. But that also means a lot of work, as I have to deal with more and more companies all the time.
It is important that you do not let your head hang down and question whether company investments are the right investment. To lie beside it belongs to it when investing. It is much more important to learn from it. To look the facts in the eye and to question critically where you could have done something better yourself. On the stock exchange, nothing is as important as experience – the good ones, and unfortunately also the bad ones!
Are you invested in Wirecard or have you sold at a loss? I am looking forward to your comment.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-06-25--[Bloomberg] Day Traders Will Have Fun Until They Get Wiped Out

One time when I was sitting in my college dormitory , I heard a whoop of joy from down the hall .
My dormmate announced that he had just made $ 500,000 trading in the stock market , after having invested only a few thousand dollars .
When I asked him how he did it , he grinned and simply said : “ Call options.
” I spent the rest of the day reading about how this marvelous financial instrument could be used to make a fortune in a day with just a small initial stake .
Of course , @ @ @ @ @ @ @ investment and ended up losing most of his money when the dot-com bubble burst a couple of months later .
This saga illustrates the danger of day trading , especially with leveraged instruments such as options .
After the 2000 tech bust , day trading declined , but the coronavirus pandemic seems to be driving something of a renaissance .
Goldman Sachs Investment Research reports that the percent of trading volume in the stock and option markets from small trades has increased a lot since January , while discount brokerage TD Ameritrade reports @ @ @ @ @ @ @ how to trade stocks have nearly quadrupled .
Robinhood , a trading app that offers zero-commission trades and a simple , video-game-style interface , had 3 million new accounts opened in the first quarter .
Half of its new customers are first-time investors .
Many online communities are filled with the standard elements of day-trader culture — stories of fabulous fortunes gained , hot tips , trading systems and theories and so on .
Coronavirus probably isn ’ t the only reason for the boom in day trading .
Brokers realized that they @ @ @ @ @ @ @ for it with interest earned by lending out their cash balances .
Mobile apps made trading easier and more fun than ever , and allowed new traders to start off with small amounts of cash .
A new generation of speculators has no painful memory of the dot-com bust .
But whatever the reasons , the new day trading mania is not likely to result in a happier outcome than the last one .
There are many theoretical reasons and a wealth of empirical evidence to suggest that most day traders are wasting @ @ @

www.bloomberg.com/opinion/articles/2020-06-23/robinhood-traders-will-have-fun-until-they-get-wiped-out
One time when I was sitting in my college dormitory, I heard a whoop of joy from down the hall. My dormmate announced that he had just made $500,000 trading in the stock market, after having invested only a few thousand dollars. When I asked him how he did it, he grinned and simply said: “Call options.” I spent the rest of the day reading about how this marvelous financial instrument could be used to make a fortune in a day with just a small initial stake.
Of course, my lucky dormmate doubled down on his investment and ended up losing most of his money when the dot-com bubble burst a couple of months later.
This saga illustrates the danger of day trading, especially with leveraged instruments such as options. After the 2000 tech bust, day trading declined, but the coronavirus pandemic seems to be driving something of a renaissance. Goldman Sachs Investment Research reports that the percent of trading volume in the stock and option markets from small trades has increased a lot since January, while discount brokerage TD Ameritrade reports that visits to its website teaching people how to trade stocks have nearly quadrupled. Robinhood, a trading app that offers zero-commission trades and a simple, video-game-style interface, had 3 million new accounts opened in the first quarter. Half of its new customers are first-time investors. Many online communities are filled with the standard elements of day-trader culture — stories of fabulous fortunes gained, hot tips, trading systems and theories and so on.
Coronavirus probably isn’t the only reason for the boom in day trading. Brokers realized that they could offer zero-commission trades and make up for it with interest earned by lending out their cash balances. Mobile apps made trading easier and more fun than ever, and allowed new traders to start off with small amounts of cash. A new generation of speculators has no painful memory of the dot-com bust.
But whatever the reasons, the new day trading mania is not likely to result in a happier outcome than the last one. There are many theoretical reasons and a wealth of empirical evidence to suggest that most day traders are wasting their money.