Mr Liu, deputy head of the commission's prudential regulation bureau in Beijing China, said his agency was looking into "systemic risk of some large enterprises" and that the risk could spread to other institutions.
If China crashes, the US crashes.....
Decennial Stock Market Patterns..... are indicating a major pullback in stocks starting either tomorrow (Friday) or Monday. Larger pullbacks are predicted in late July (July 21-25 ?) and possibly through November, according to legendary trader and technician Larry Williams. (The Street.com 6/20/17)
if the healthcare bill doesn't pass in the senate... skies the limit for TZA
For the last 10 days, China has had an ..........INVERTED YIELD CURVE.
Prior to EVERY........7 recessions the US has had, the US had an .........INVERTED YIELD CURVE.
Right now the US is again very close to having an............INVERTED YIELD CURVE.
Question: What will happen to global economic growth and PE multiples if the two largest economies in the world have a synchronized recession ? BOTH....will go down significantly.
With the Russell 2000 PE Ratio currently at a very high and overvalued "82.36," according to the Wall Street Journal Market Data Center, the ETF IWM is extremely vulnerable to a major decline. Just a 10-15% decline in IWM would result in a 30-45% upside move in TZA.
The perfect storm (trigger) is here.
John Ryding and Conrad De Quadros of RDQ Economics in Barron's this week:
"We think financial risks are building and low implied volatility suggests market participants may not be adequately protecting against those risks. For example, equity prices made new highs this week and corporate credit spreads are tight, but core domestic profit fundamentals are deteriorating (a negative for bonds, stocks and spreads ) "
Deutche Bank's derivatives analyst Aleksandar Kocic calls the current market "metastable" and the result of "widespread complacency and similar to an avalanche. A totally innocuous event can trigger a cataclysmic event."
Now what will be the trigger this time around ? In 1987 the unexpected trigger was Iran's bombing of a US supertanker in the Persian Gulf on Thursday, Oct. 15th 1987. Four days later we suffered Black Monday......
One possible trigger that could get the markets rattled is if/when that the State of Illinois receives a junk bond rating. This would be a first in US History and this would most definitely remind investors that all is not well at home.
BOUGHT A LITTLE THE LAST 2 DAYS IN MOSTLY GOLD RIGHT NOW IT IS GOING TO $1550 THIS SUMMER JNUG & NUGT FOR 3 X AS GOLD MOVES UP WILL ROTATE IN TZA LITTLE BY LITTLE .I THINK THINGS HOLD UP TILL FALL BY THEN GOLD WILL BE TOPPING OUT. JOIN THE RUN IN GOLD 1ST I THINK I GOT THE BOTTOM LAST WEEK.
Yellen's negative US GDP growth rate guidance of UNDER....2% by 2019 yesterday was the bell ringer that global markets reached a market high and are now about to decline and reverse to much lower levels. With growth rates decelerating, the Russell 2000 has no justification for trading at over "80x" earnings, according to Wall Street Journal Market Data Center. A 15-20% correction is justified given that Total Market Capitalization of US stocks to GDP is currently reading at 133%. This valuation is HIGHER.......than Housing Bubble levels of 2007 and only second to Internet Bubble levels of the late 90s.
tza will hit 45 by the end of summer. I think the Russel gets pounded from here, looking for a 20-30% pullback in IWM.
More Negative News That Supports a 15-20% Correction:
1)Households now have 39.2 % in equities. This is higher than the Housing Bubble levels of 2007-2008 and close to Internet Bubble levels of late 1990s.
2)Building permits have declined for 3 months in a row. Is the Housing Bubble about to pop ?
3)Consumer Sentiment readings were 94.5 for June; well below the 97.1 reading that economists were predicting.
All the stars are getting aligned for a major drop in US stock prices.
According to YCharts, "Total US Stock Market Capitalization to GDP as of June 8th, 2017, now sits at a very dangerous 133%" A reading of 100% represents fair value for the stock market. The market, according to Warren Buffett's favorite stock market metric, is currently overvalued by approximately 30 %.
The longterm average of Total US Stock Market Capitalization to GDP is..............79.56
Not only is the stock market selling above the Housing Bubble levels of 2007, but potential Black Swan risks increase worldwide:
1)North Korea 2)Iran 3)Housing Bubble in Australia and Canada 4)China's Housing and Debt Bubble 5)Commercial and industrial Loan Growth is Decelerating 6)Under 40 demographic is shrinking worldwide 7) Stalemate in Washington while ACA collapses and our Debt Bubble continues to expand
Without a tax, infrastructure and healthcare deal, a 13% pullback in equities , which will unwind all of the post-Trump rally gains, is warranted. One thus must be positioned accordingly.
Paul Singer who manages $34B recently said that ..."the global financial system is more leveraged than 2008"
*If chart doesn't show, go to ZeroHedge...... Zero Hedge Published on Zero Hedge (http://www.zerohedge.com) Home > Blogs > Phoenix Capital Research's blog > Bubble Watch: We've Passed 2007 and Are Closing In on 2000 Bubble Watch: We've Passed 2007 and Are Closing In on 2000
By Phoenix Capital Research Created 06/08/2017 - 09:20 Phoenix Capital Research's picture  by Phoenix Capital...  Jun 8, 2017 9:20 AM TwitterFacebookReddit  We continue to see articles and comments in the financial media proclaiming that stocks are not in a bubble.
The people claiming this are either delusional or intentionally lying.
Most people would argue that Warren Buffett knows a thing or two about investing. He’s possibly the single most famous investor of all time and is widely thought to be one of the greatest, if not THE greatest investor in history.
Buffett’s favorite metric for measuring the pricey-ness of stocks is the Stock Market Capitalization to Gross National Product ratio. This was one of the key metrics Buffett cited when he arguing why the Tech Craze in the late ‘90s was a mania to avoid.
Below is this metric running back to the early ‘90s. As you can see, today this ratio is above its 2007 peak: a period that is widely known to have been a massive bubble.
Indeed, the last time the ratio was this high was in the fourth quarter of 1998… right before stocks went completely parabolic in the single largest stock market bubble of all time.
Put simply: the only other time stocks have been more expensive based on Buffett’s favorite valuation metric was during the single largest stock market bubble of all time: a period that everyone now acknowledges was utter insanity.
This bubble will burst just as the Tech Bubble and the Housing Bubble did.
And smart investors will use it to make literal fortunes from it.
Zero Hedge | On a long enough timeline the survival rate for everyone drops to zero
Leading news site for global finance, economics, market, and political analysis.
According to FINRA Statistics:
Debit balances in customers' securities MARGIN ACCOUNTS has ballooned from:
335.154 BILLION ......... in April of 2012 to a dangerous...
**590.797 BILLION..... in April of 2017
According to The Wall Street Journal Market Data Center, the PE Ratio for the Russell 2000 on June 2nd, 2017 was a nosebleed "80.56"
Again! The Dow index is going down but this ETF is also down too. What's going on?
Here's another "Fun Fact" to digest: ....MARGIN DEBT at the NYSE reached new highs for the 4th month in a row, surpassing $549 BILLION in April.
More good news: second 2%+ drop in three weeks. The more frequent, the better. Fed likely to raise rates again this month. Even if they initiate more QE, it will only serve to delay the inevitable.
In leading indicator geographies like Silicon Valley, where I live, rents have been dropping for months, commercial "For Lease" signs are popping up like mushrooms and venture flow peaked two summers ago. FANG, et al is reminiscent of the dot com and Nifty Fifty where "sure thing" companies lifted market capitalization weighted markets. That said, today's market is 55% more expensive than the dot com on a median price basis and 7% cheaper on an average price basis.
I bought LABD, DRIP and BZQ March 21 (already own TZA), and cumulatively they are only down .9% while the market is up 7.4%, which is mildly heartening. Hang tight and eventually you will be rewarded.
Go look at a 20 year weekly chart of the Nasdaq. It appears history is repeating itself. If so this phase is the greater fool/irrational exuberance stage where the final leg is nearly straight up over the next few months followed by a devastating crash. If we don't soon get a 10% correction or more I wouldn't be surprised to see that outcome.