(Updated on 7/10/2015 @ 2:00pm)
Well, close enough to the end of the day to make a comment or two on my “Economic Warning.”
- All three US stock markets were up substantially today with not too much volatility. Same is true for the Chinese stock market. That all shows enthusiasm by investors for stocks. Maybe just a little government money thrown in to keep stock prices headed up in both countries.
- The 10-year Treasury was noticeable up, along with the VIX dropping moderately. Both those indicators show investors were more interested in stocks than safety.
- Although, silver & gold were both up today which indicates continued interested in precious metals for safety purposes.
- And copper and crude oil futures also dropped indicating that investors are still not sold on economic growth.
- It appears that Greece will sign a deal to restore their debt. One unsettling part of that agreement is reducing the principle. In other words, the folks lending the money to Greece know they won’t get all of their money back. So they are reducing the principle now to entice Greece to pay back the reduced amount later. I don’t think that is a good strategy and I don’t think it will work out well.
- In the last month the US stock market is still down 1.5% for the last month showing investors are not thrilled with what they see.
Here is the crux of my opinion of what is happening and what I am expecting to take place:
- The stock market will continue to be volatile and not a safe place for money, other than long-term money for 401k and IRA purposes. One day, in the not too distant future, the market will dive 3 – 5% and it will not pull out. I expect a 50+% pullback in the market in the medium-term and I do expect a total market crash in the long-term.
- Greece is not done. Greece will continue to have debt problems. More specifically, it will have payment problems. Greece will do bad on its debt, it is not possible for any other outcome. When it does go down the Euro will not be far behind.
- The US stock market is WAY over sold, meaning share prices are in “bubble” territory.
- The Chinese stock market has no resemblance to reality. The Chinese government is pumping so much money into it there is no way to tell what it is really doing as far as loses and gains. But the Chinese government has no options. It must keep the market propped up. Their standing in the world depends on it. More importantly, they have 1.3+BILLION people to keep happy. If over a billion people get unhappy then that country’s government has a huge problem on their hands. China doesn’t want a problem.
Many of the indicators show that things are back to being “good.” I don’t agree…period. I think the underlying economic and stock market conditions are unchanged in the bigger picture.
I am l standing behind my Economic Warning and still encouraging the actions laid out in previous day’s posts. Yes, that means I am doubling down on what I am saying. But, worst case scenario? I am wrong and the stock markets will do wonderfully and the world’s economies will be strong, vibrant and growing. And you will have done those things mentioned here in these posts and your family will be better for it.
Keep your eyes open…it is far from a position of safety.
(Updated on 7/10/2015 @ 5:15am)
Straight from me, my thoughts. Well……..
- the US stock market futures are way up this morning.
- the Chinese stock market is way up this morning (smacks of Chinese gov’t intervention).
- oil is up this morning.
- the 10-year bond is showing weakness.
That all shows confidence in the stock markets and economy. And it shows investors are less nervous about the direction of things economically. But……
- Gold & silver are up a bit.
- Copper is down.
- And another article about Chinese having to sell homes to cover stock losses.
All that shows there is still some concern about the stock markets and investors are still a bit jittery.
Somewhat mixed signals. But I think the stock markets have righted themselves for now. But it doesn’t change the underlying problems.
Let’s see what the day brings and I will write a little more.
(Updated on 7/9/2015 @ 4:45pm)
The stock markets reacted really interestingly today. Couple thoughts on the stock markets and current events that took place today:
- At the opening the stock market jumped 240 points, 1.3% increase. Not bad, I expected an early session jump. But then look what happened as the day went on…it dropped over 1%, shedding well over 200+ points. ending with a very, very modest .2% increase today (that’s less than 1/4 of 1% gain) . After yesterday, to me, in all reality, that means the market fell again today. Obviously the opening bell rise was coordinated with a massive influx of money to artificially “buy” the market and give the sense that the market had rebounded and all is well. But they couldn’t convince investors to maintain the artificially indiuced momentum.
- The Chinese stock market was up significantly today. But the only reason it was up…the Chinese government pouring in hundreds of millions of dollars (maybe billions) to artificially drive it up. They were simply trying to calm and reassure the Chinese people that all is well with their savings and investments. If I was the Chinese government I would want to keep over a billion people calm too.
- The Chinese poured nearly $30BILLION into American real-estate last year. They were looking for a “safe-haven” to counter the risks in the Chinese stock market. There is some concern that some amount of the $100BILLION of recent Chinese money that has been going into American real-estate market will now “outflow” back to China. If it does…the American housing and real-estate market will take a serious hit. China is the #1 foreign buyer of American real-estate.
- Initial jobless claims jumped to nearly 300,000 last week. That is a very large and unexpected increase in jobless claims. This clearly shows a significant problem in the jobs market. Not only didn’t the jobs market keep up with new people entering the job market, but the job market actually shrank. This number shows that companies are very concerned economically about the coming weeks and months and refuse to hire people.
- The VIX (economic/market fear volatility index) continued to gain today indicating that investors are still worried about the economy and the market.
- “Short-Sales” are basically bets against good stock market performance. Investors are betting that the market will drop. And those “short-sales” are at the highest levels since before the financial crisis, the stock market crash and the great recession seven to eight years ago. Investors simply think the market is headed lower.
- Marine General Joseph Dunford, the nominee for the Chairman of the Joints Chief of Staff (highest ranking military officer in the country) made the statement today, Russia now poses the greatest threat to US national security and its behavior is nothing short of alarming. He went on to express concerns about Russia’s nuclear capability and their willingness to use it. That should put a lot of issues into perspective for you.
All-in-all today was a day that continued to raise my “concern level” about what is going on right now in the world and how it could affect us. Today didn’t make it worse by a quantum factor, but it did inch things worse a bit. I think what happens n the markets tomorrow right before the weekend should be telling. I will be watching. I have taken the afternoon off tomorrow to keep my eyes on events. I will post anything of importance that I see.
Stay vigilant, keep a calm head about you, and drop the Normalcy Bias.
Do those things right now that you feel are most important to you and your family.
(Updated on 7/9/2015 @ 0545)
“About half of the 2,800 stocks on mainland Chinese markets have been suspended from trading as companies attempt to stem further losses by sitting out the market upheaval.
Experts said the wave of trading suspensions could have the opposite of the intended effect. Instead of stabilizing the market, they could add to the selling pressure by transferring it to other shares that remain active.“
That comes straight from an Associated Press story < source > just hitting the wires. What this story is getting at are a couple things:
- The Chinese government already put trading restrictions and limitations into place to try and stem the market crash. There is little evidence that those actions are working.
- Half of all the Chinese companies who have stocks traded in their market have now suspended trading on shares in those companies. That means people can no longer buy or sell 1400 of the 2800 companies whose shares are listed/traded on their stock exchange.
- Experts say (and I agree) that removing half of the stocks from being able to be sold, will transfer ALL of the selling to the 1400 shares sill available to be sold.
This could turn out to further hurt the Chinese stock market and that would ripple here to the US markets as well. But the US futures continue to show a significant upswing this morning, so I could be wrong about the implications of this move by Chinese companies.
(Updated on 7/9/2015 @ 0520)
As expected, the Chinese has made a rebound this morning. And the US market futures are looking higher as well. That will probably move the price of oil higher, and precious metals prices will drop. The 10-year yield will probably rise and the VIX will drop significantly if the Fed comes to the rescue.
I am sure that this morning’s market move in China is based on the information that came out yesterday, the Chinese government is pumping billions of dollars into their market to keep it from a total melt down. I am sure our Federal Reserve is coordinating the same thing here in the US.
I am encouraging you to think this through, gather all the information you can and then make your choices based on what you think is right for you and your family.
(written 7/8/2001 @ 4:30pm)
I posted Economic Warning – Part #2 (update, please read), now I am adding the latest and rather significant information to what is happening right now…today. It is important that you know this information and take action. Here are the red flags taking place:
#1 – Chinese stock market took another dump in its last trading session, a bad one. So bad that trading was suspended.
#2 – Also, major shareholders were told by the Chinese government that they are not allowed to sell their stock for some unspecified period of time.
#3 – The NYSE computers “failed” and trading was suspended for hours. The “failure” was blamed on a “technical” issue, possibly network related. I am calling Bu$$sh*t on that! The two suspensions of trading were not coincidental…period.
#4 – The US stock market is down well over 260 points, that is 1.5% of the market value dropped in one day…today. The same day that Chinese market took a huge dump, their trading is suspended and the NYSE trading is suspend. That is no a coincidence.
#5 – Without the suspension of trading, the S&P500 and the NASDAQ both fell even more than the DOW…down 1.65% and 1.75% respectively.
#6 – Investors and Thailand’s citizens are so worried about the threat from China that billions of dollars have left Thailand’s stocks and bonds so far this year headed to other countries the see as safer.
#7 – Oil dropped over 1.25% today. Shows market thinks worldwide finical condition worsened and will continue to worsen.
#8 – Gold and silver is up, so is the price of the US 10-year bond. That indicates a clear move of investors to safety.
#9 – The VIX (a volatility indicator of financial woes) shot up 22% today.
#10 – I am hearing that the US Mint will suspend sales of the 1oz Walking Liberty silver coin. That coin is the mainstay of investment grade silver. I have not been able to confirm this directly back to the US Mint itself but I am working on that.
I am not saying the “end is near” or that the SHTF but I am letting you know that I am doing the following:
- Checking my guns and ammo, ensure they are good to go.
- Going to buy some bottled water. I won’t tell you how much, but we have 30-days of bottled water stacked in the house.
- Make sure I have a solid first aid kit (IFAK) for each member of my family and they are ready. Same for a family first aid kit (TBAK).
- Fill up the gas tank on each vehicle we own. Keep them above ¾ of a tank for the next few days.
- Make sure all our spare propane tanks are full.
- Ensure that we already have at least a 2-week supply of pantry food. If not, go to the store and buy it.
- Ensure we already have a “Get Home Bag” (GHB) put together and in our vehicles, do so now.
- If we have a GHB ready then get our “Get Out Of Dodge – Bug Out Bag (GOOD BOB) completed.
Now, let me explain why. I think that conditions around the world right now could, I said “could”, be early red flags to more serious problems that are developing. I am not saying the world is coming to an end or that this is the start of the great apocalypse. I do believe that we are seeing the beginning of some potentially bad times.
And I don’t want anyone to be blind-sided. I don’t want any surprises here.
So what if NOTHING comes of this current stuff? Fine, I am thrilled if nothing comes of it. I don’t want anything to come of it. And if nothing does come of it then everything you just did was a good test of where you’re at in terms of preparedness and readiness.
A dry run if you will…great practice for you…and hopefully for your whole family.
None of the money you spent on any of the above will have been wasted. You will use it at some point…so the money was well spent.
If you think I am crazy to talk about all of this…fine. I have no problem with what you think of me, crazy or otherwise. If I wasn’t me and know that things I know, I probably would think I was a bit crazy to go on the record like this as well.
Do you remember the purpose of me starting this website to begin with? It is to help people be prepared for emergencies, disasters and especially grid-down. I don’t want to fail at that. I will put this warning and advice out there and you can take whatever action you feel is important for you and your family.
I hope, truly hope, that nothing comes of any of this crap going on right now. I hope that markets rebound tomorrow, the sun comes out, and we all hold hands and sing together. But I also don’t want to hold inside the warning that I feel I must share with those that will listen.
This is not a “panic”, this is not a “the sky is falling”, this is not some supposed “prophetic” message. It is none of those things. This is just me sharing with you what I think, my opinion, some thoughts, and some suggestions.
Feel free to post whatever comments you wish, I think it would be good for people to hear what others are thinking and feeling. So please share your comments.
Final thought…About mid-afternoon my wife called me. She told me that her mid-40’s niece (four kids) had just hung up talking to her. Her niece had called and the first thing her niece said was, “Should we pack up and head your way?” My buddy called me about 20 minutes later and asked, “What do you think?” We talked for about 30 minutes, he is spooked.
(update 7/9/15 @0515 : My wife’s niece contacted us last night. She had been talking to her mom for almost an hour. There plan is to group up and then come to our place when it hits the fan. Wow, they are spooked. Any one else?)
Keep your eyes open folks…keep em wide open.
Related Articles –
- Economic Warning – Part #2 (update, please read) 7/8/2015
- Economic Warning (6/8/2015)
- Silver & Gold…Really?
- WARNING – Special Edition (5/29/2015) : Part #1
- Get Home Bag
- Get Out of Dodge – Bug Out Bag
- Food Storage – Pantry Food
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