How 2019’s Market Top Parallels to the Time Right Before the 2008 Financial Crisis (w/ Sven Henrich)

How 2019’s Market Top Parallels to the Time Right Before the 2008 Financial Crisis (w/ Sven Henrich)

SVEN HENRICH: Sven Henrich, been running Northman
Trader for about six years. Originally, private investors, way background
was corporate management actually in corporate strategy internationally, always been looking
at companies and opportunities. Hence, the background and analyzing stock
markets comes natural to me. Our business model is really looking at identifying
the big moves. We’re not day traders where we’re looking
at swings, so be it long be short. Of course, as part of that, we’re looking
at the macro environment markets in general– central banks, what have you, although that’s
secondary, the key is technicals and being able to identify the big turns and that’s
what we do. You see me on Twitter, @NorthmanTrader or
on the website, Yeah. In April, I had put out a piece called, “Combustion”. It was this whole notion that both bulls and
bears need to be mindful of potentially this really uplifting scenario. We had a big turn from the lows of 2018. We’re literally all central bank policy combusted
by them and the view was we’re going to be raising rates, we’re going to be having a
reduction in the balance sheet on autopilot. Then of course, markets dropped 20% and then
yields dropped, actually started the other way around. Basically, it was yields heading to 3.2% on
a 10-Year in October, and that sparked a whole selloff in my mind, but basically, central
bank’s completely reverted policy. The Fed had this whole job owning operation
all year long from tightening to easing and rate cuts are coming. That’s what they’ve been doing all summer
long. In April, what I said was we’re going to keep
going on this trajectory until something breaks. We had a quick correction in May, we had some
of the same negative divergences that we have in the fall. Something interesting happened here, because
we had a temporary high and then we had the correction. Then in July, we came to a new high and we
had a correction. In June, actually, I had put out this piece
called, “Sell Zone,” this was at the end of June, just before the Fed meeting in July,
and the notion was this period, this price zone between S&P 3000 to 3050 is a sell zone,
listed a whole bunch of technical factors for that. We had the initial reaction. It was coming off the heels of the Fed rate
cut, the first rate cut since the financial crisis. We dropped from 3028 down to about 2780 on
the futures contracts. A snappy technical reaction. Then it all started again with trade optimism
and more rate cuts coming and so we rallied again into September. My view in April was that would be this potential
for a blow off top move and the ultimate target of that was about 3100 as an extreme case. Now, what I find interesting here is that
in September, we got back to this 3000 zone that I had identified at the end of June as
a sell zone, 3000, 3050. We got another rate cut. The ECB cut, and we got to 3022, just below
the July highs and we dropped again and so now we have to rate cuts, two drops, potential
for double top because we have these all new highs up and sold in the last year and a half. There’s not been yet evidence that any new
highs are sustainable so markets have been this wide range. In 2019, primarily driven by multiple expansion,
either by trade optimism, or by the Central Bank put and my question in general has been,
what’s the efficacy? Is there a sign that central banks will actually
start losing control of the price equation? We’re at the edge of control here. We’re still in this phase here with the China
trade negotiations. Global macro has been slowing down throughout
the year, the US was the island and the sun, if you will, because global markets actually
peaked in January of 2018 and then the US decoupled from the rest of the world. Europe, very close to a recession here. The manufacturing data is maybe now spilling
into the services sector. There is now risk that we’re ultimately going
into a global recession into 2020 and what central banks obviously, have clearly stated,
their intent is to extend the business cycle by any means necessary, and we can talk about
that separately. We’re now at this critical point. Will we get a trade deal that’s substantive? By substantive, I mean that actually impacts
CEO confidence. Keep in mind, this whole year and a half year
with this trade war going on, companies have been holding back on CapEx investments, business
investments, and now, we’re seeing a slowdown in hiring. Remember, with a 50-year low in unemployment,
the official unemployment rate, and jobs growth has been slowing down. If you get a– and I’ve been very consistent
on this, if you get a substantive trade deal that addresses all the big issues and causes
companies to say, “Okay, now we’re more confident again,” then yes, you can have a massive blow
off rally and now, with easing central banks and the oldest liquidity coming in, you can
have that run. The question is, are these parties really
in a position to say we’re going to have a substantive trade deal? There does not appear to be any sign of that
whatsoever. We see a lot of positioning, actually this
week even, we see China in the US aggravating the tactical battle, if you will. China is– in this morning’s indicating they
may be open to a partial deal. What does a partial deal really mean? Is there probably a relief rally surrounding
a partial deal? Probably. We can all speculate in the sense that, “Okay,
well now, it’s not going to get any worse.” It’s a stalemate. We’ve basically, everybody’s waving the flag. Mr. Trump wants to get reelected in 2020. Can’t afford a recession. The Chinese don’t want things to get worse
either. Everybody’s holding back. Fair enough. That could happen, but is it enough to then
get confidence back to say, now, we’re ready to invest when the big issues remain unsolved? That’s obviously the question that no one
can answer. Now, of course, the flip side to this is there’s
not enough that the parties either can agree to that gives anyone any confidence because
keep in mind, all the slowdown has perpetuated in the last year and a half. There has not been any sign of slowing down,
maybe a little bit civilization in China but now, the US is slowing down. In fact, I think it was the Fed’s Rosengren
that came out last week, and says he’s expecting 1.7% GDP growth for the second half of the
year in 2019. Not exactly convincing when you have a market
that has rallied on nothing but multiple expansion in 2019. There’s a lot of risk both to the upside and
the downside from my perspective. On the one hand, yes, there’s some similar
elements. On the other hand, people like to say it’s
different this time. Well, it really is different this time because,
look, in the past, we’ve had situations where we’ve had high debt, and we’ve had yield curve
inversions, we had all these things that are taking place at the end of a business cycle,
but never before have we seen so much intervention, so much jawboning and never before have we
come out of a business cycle where central banks have not normalized in any shape or
form. This is uncharted territory. I think we’re all– I don’t know what the
expression is so maybe we’re all mollified or pacified in a way because markets have
changed so dramatically over the last 10 years as a result of permanent central bank intervention. I get it from any investor perspective, because
we’ve all been trained, literally trained to know that any corrective activity in markets
is contained. It’s contained within a few weeks, within
a few days, within a few hours. All bad news is priced in immediately. We saw it in December. This was the most substantial correction we’ve
had since 2011. Why did that happen? It stopped right when Mr. Mnuchin came in
with his liquidity calls to banks and with Mr. Powell flipping policy on a dime. We’re flexible suddenly. This is this point where you never have anything
that sticks from a price discovery perspective. My concern in general and the voices in the
summer was that we’re creating these markets that disconnect ever farther from the underlying
size of the economy. Well, there’s two trains of thoughts. First of all, this is a history part of it. History actually tells us that the inversion
we have on the 10-Year and the 3-Months actually precipitates a recession every single time. The question is the timing of which. Now of course, you have other yield curves. Some of them which are inverted, some of which
are not, but it’s really the point of the steepening. Once that inversion reverts back into a steepening
phase, that’s when usually the recession comes. We’re not at the point yet where that steep
learning has taken place. However, the 10-Year and 3-Months, it’s been
inverted for several months now and that’s typically one of these classic warning signs. There’s another school of thought that says
basically, well, none of this matters anymore because we have central banks intervening
and blah, blah, blah, blah, blah. I’m not of that viewpoint. I think the signals are there. What’s missing for the bear case, frankly,
as I called it the missing link is the fact that unemployment is still okay. There’s not been a minute where it’s been
slowing. We haven’t seen that flip yet, where companies
are suddenly really going into layoff mode. That’s what interesting looking at Q3 earnings
now, because a lot of companies will show either flat or actually negative earnings
growth, which brings me back to this multiple expansion. We’ve been running to market highs, not because
of great earnings growth. Earnings growth is flat to weakening here
in this quarter and so companies are experiencing margin compression. Then there is that point where they want to
start looking at the largest expense line item, which is jobs. What’s been so interesting and the reason
I kept saying that all new highs are sells is because all these new highs are coming
on specific technical signals and sector divergences. Especially looking at this year, again, we
see– well, last year was basically again, this was tech, it was Fang-led. It was the big tech companies. All new highs came on negative divergences
on the technical basis and they were sells. What was interesting, ever since 2018, the
markup of the market has radically changed. Last year, the banks were leading, the small
caps were leading, right into these September, October 2018 highs. That has completely changed in 2009. You overlay a chart with the SPDRs vis a vis
small caps and transports and the banking sector, it’s a horror show. When we’re looking at the S&P like in September
and again, within all-time highs, I can tell you if you go back to exactly last year, the
banking sector small caps and transports, they’re all down to 11% to 13%. They’ve not participated. In fact, they’ve been in months long ranges. It’s amazing because you see these rallies
go up as and hey, people get bullish again. Then they drop right back to the bottom but
the bottom is holding. Even this week, again, the small caps, transports
and the banking sector, right on the edge of support and they keep bouncing. Now, I look at this from a technical perspective,
I say, “Okay, well, the more often you tag a certain area, the weaker it becomes either
to the upside or to the downside.” We’ve tagged these areas now multiple times
and for a rally to convince, for new highs to convince and to be sustainable, we need
to see those sectors partake and get above resistance. Until I see that, I’m very suspicious of any
new highs if we get new highs and from my perspective, going back to this whole trade
deal, unless we see a substantive trade deal, I view any rallies to new highs as sells because
that’s basically what they’ve been doing. Just one more thought on this whole sector
piece, there’s a chart I’ve been publicizing quite a bit that’s called the “Value Line
Geometric Index.” It’s a fascinating technical indicator because
all these indexes are market cap based. The Microsofts, the Apples, the Amazons obviously
have a dominant impact on an index like the QQQ because they’re worth a trillion bucks
each. If you take all the stocks and put the same
dollar value on them, let’s say everyone is worth 100 bucks, and now track their relative
performance, you get a completely different picture. What we’ve seen since 2018, since the September
2018 highs, is that all new highs that were made on the S&P come on the lower reading
on the value line geometric index. That’s another one of those signals that tell
you, “Okay, these new highs have been a sell.” See that picture change, then you can have
sustained new highs. To me again, it comes all about efficacy of
what the central banks are doing whether we get a solid trade deal or not. Because in so far, none of these things have
shown any impact or suddenly changing the growth equation in the economy. Volatility has been fascinating. I’ve been publishing quite a few pieces on
the VIX in the last few months. The VIX, I hear this all the time and I keep
having to push back. People are saying you can’t chart the VIX
because it’s a mathematical derivative product. Yes, you can chart the VIX. In our job, what we do, obviously, we always
have to look for what is relevant. We can all have our opinions. What markets should do or shouldn’t do, they
will do what they will do and what we have to do is keep ourselves on this and to see
what is relevant. We know a lot of algorithmic trading is part
of markets. They follow programs as well. You always have to look at, “Okay, what are
they looking at? What are they sensitive to? What are they reactive to?” Because we want to be able to interpret risk
reward short or long on that basis as well. What the VIX has done over the last two years
is fascinating. There’s been very specific what I call compression
patterns in the VIX, especially on the low end. It can drive people nuts. It can get caught, consolidate on the low
end and then boom, you have a spike. That seemingly comes out of nowhere, but it
doesn’t. It’s in the charts. I call them these compressing wedges. Now, what’s been happening on the big picture
on the VIX is as the S&P has made new highs each time, the VIX and the in between periods
has made higher lows. There’s a trend of rising volatility. Obviously, December last year was the big
spike. It’s the lows, what happens during the lows? Remember, 2017 was the most volatile compressed
year ever because we had global central bank intervention, we had the upcoming tax cuts,
there’s no volatility markets from a trading perspective, I hate that. I love volatility, I want to see things move,
but now that we’ve had these selloffs, even the smaller ones, if not been able to contain
volatility to the extent that they’ve been able to do in 2016 and 2017, since 2018, we
have a trend of higher lows. Now, the VIX is again in a compression pattern
that suggests the possibility of a sizable spike still to come this year so we may have
one more hurrah before the yearend rally that we so often see in markets. I think this whole shift of passive is fascinating. Maybe a couple of comments on that. I haven’t seen this discussed anywhere. Just my impression. I’m wondering how much of the shift from active
to passive investment is actually a consequence of central bank intervention. What is driving passive? Well, you talk about management fees on the
active side. Well, the main driver for the movement to
passive is that people have given up. They see active investors lagging the indices. Why are they logging the indices? Because everything is geared towards the big
cap stocks. The intervention– if you’re really careful
in analyzing and you’re smart and you have a smart team, if you diversify in the universe
and you get hammered anywhere you lag in the indices, and passive allocations keep allocating
passively. It’s like this dumb machine that doesn’t care
how much it pays. It doesn’t care what the valuations are, doesn’t
care about any of that. To your point about signaling, yes, it’s amazing
when you see– and that’s why I’m coming from a technical perspective, you see charts that
are massively, massively historically overextended but no one cares because you have this passive
machine that keeps investing. I think I mentioned this last year, too, it’s
like, are people actually aware what they’re competing with? Because you and I may have a sense of, “Okay,
this is getting very expensive,” but a machine doesn’t care what it allocates. The ETF doesn’t care what it allocates. It just has to do rule based. You’re sitting in the market with entities
that don’t care if they overpay. Classic example is Apple. Take that stock as an example. It’s obviously hugely valued. It’s a big company. It’s a trillion dollar valuation, but it keeps
buying back its own shares. Obviously, as a big company, it benefits from
these passive allocations. What people don’t realize is that Apple has
the same amount of earnings that it had in 2015. Four years later. Absolutely no change in earnings, same amount
of earnings, but people are paying almost twice the price for the same stock. Why? Because Apple’s been buying back its shares,
therefore reducing the float and save for the same amount of earnings produced a much
higher EPS, earnings per share, bigger. It looks like it’s growing, but it’s not. That’s my point about this whole pacified
machine that has been created. You, since corrections are not allowed to
take place for an extended period of time, you’re looking at all of sudden at yearly
charts. We have stocks, as I mentioned before, like
a lot of sectors are lagging behind, and the big cap stocks keep holding everything together
because all the money goes towards them. Because corrections are so short, we have
yearly charts that show nonstop gains for 10 or 11 years. There’s absolutely– the December corrections
even show up in these charts because they were still up on the year in many cases, so
you look at Starbucks and Disney. Disney is a good example. Up 11 years in a row. Well, this is this fantasy that’s being propagated
now. Because I just put my money into passive funds,
I don’t have to think about it. It’s risk free central banks always intervene
and so we have these massive charts that are vastly extended. Even the technical indicator I watch. On any chart timeframe, you will find this
useful. Be it on the daily chart, the weekly, the
monthly, the quarterly and the yearly, it’s the five exponential moving average. Even on a daily chart, you see vast extensions
above it, it will reconnect either to the upside or the downside. If you see massive extensions on the weekly
chart, at some point, it will reconnect. The reason I mentioned this is there are stocks
like Microsoft that are 50% above the yearly five EMA. Why is that relevant? Because if you look at the history, look at
a stock like Microsoft, you can go back to its inception and this stock always connect
every single year like clockwork. There were two exceptions, Microsoft, my favorite
example. One was the year 2000. It was in 1999. It was completely extended, did not touch
the fire a yearly five EMA. Then the second year was 2001 when it went
way above, and then it obviously plummeted down with the NASDAQ crash and reconnected,
and now. It’s now on its second year, it hasn’t even
touched it. It’s vastly extended. From my perspective, I look at all this with
what central banks are doing here. I see risk building that these reconnects,
technical reconnects, will take place at some point. When they do all of these stocks all of the
sudden have 30%, 40%, 50% downside risk. This is the undiscovered country. It really is. Look, I’m coming from a training perspective. I’m resentful of central banks simply because
of the volatility compression that they have aimed to do. In fact, Jay Powell came out yesterday, made
a very telling statement with regards to repo and overnight money markets. He literally said we have to calm markets
down. We need to calm. Where’s that in your charter? Where’s that in your job description to calm
markets down? Look, markets are supposed to be free flowing
in price discovery, but it’s telling because he has to control that aspect of the interest
rate equations, he has to control it. That’s the point. Everything is controlled. When I look at this experiment that has taken
place over the last 10 years, and I’m just absolutely flabbergasted that this is not
being pressed more critically by journalists, by the media and by the public discourse. QE, lower rates were emergency measures to
deal with a crisis. That was the original intent. Ben Bernanke, QE1. Then came QE2, and then twists and turns,
then QE3. It morphed into permanent intervention. The promise was always we’re going to normalize,
becoming come out of financial crisis, everything that we do, low rates were going to incentivize
growth in the economy. They haven’t. It was the slowest growth recovery in history. In the meantime, low rates have enabled this
incredible debt expansion. Now, we also got eyes always glaze over with
debt no one even– the numbers have gotten so big and continue to get ever larger that
no one even can fathom these numbers. Here’s a fun one. In the last 10 years, the US has added more
debt to its balance sheet than in the previous 42 years combined. That’s this vertical curve we have and there’s
no end in sight. When the Fed, last year, tried to normalize
its balance sheet and try to raise rates, which they managed to get to, basically, the
lowest point of raising ever, it all fell apart. The 10-Year hit 3.2% in October of 2018. That was the end of it. The debt construct cannot handle higher rates
and so they were forced to capitulate. My question and the answer to your question
is, can they keep this going forever? Which is interesting to me, coming back to
this point I made earlier about valuations of asset prices vis a vis the underlying size
of the economy. In the year 2000, when the NASDAQ bubble burst,
the overall market cap of the stock market got to about 144% of GDP. That was it. It was just too high above the economy. That’s where the crash happened. That’s where the recession came. Then we re-inflated. This was the lead up to the housing bubble. Cheap money, who caused the housing bubble? Well, we can argue it was the Fed with cheap
money and this cheap money had to go somewhere and so we offered credit and subprime mortgages
to people who can’t really afford it. The stock market rose to about 137% of GDP. Guess where we topped in January of 2018? 144% market cap to GDP. Where did we top in September of 2018? 146% stock market cap to GDP. Where did we end this summer in July? 144% stock market cap to– there seems to
be this natural barrier that says, “Okay, well these valuations have to be justified
somehow.” When I now see the Fed saying, okay, well–
back in September, where we’re back at 144%, what are you trying to do here actually? Obviously, what you have done, what all the
central banks have done has not produced organic growth anywhere near the growth that we’ve
seen in previous cycles. That’s why the ECB still in negative rates
and they’re trying to do more than negative rates. For me, that the question is one of control,
efficacy. Does this produce another lasting jumping
an asset prices? There is no answer to that question yet, but
there may be signs. For me, the first sign was, okay, this July
rate cut when we had that sell zone of 3000, 3015. Does the Fed rate cut actually produced sustainable
new highs? The answer to that was no. Then in September, we had the second rate
cut. Did that produce sustainable new highs? No. Yesterday, Jay Powell talked about increasing
the balance sheet again, but don’t call it QE, wink, wink. We sold off. Those are those three specific signs, events
where the Fed has not succeeded in producing new market highs or for that matter, new growth. I think the question is very much outstanding. Once we know what’s happening with this trade
deal, we need to keep reassessing the mechanics of markets and the technicals and see if we
can actually see a sizable turn in the economy. I’m highly skeptical. Because all we’re doing is just keep enabling
more debt and demographics are not changing as a result of that. The deflationary cycle is not changing as
a result of that. Beyond temporary highs, I have to see where
that’s producing anything on the macro form, and so far, it hasn’t. I think we have to differentiate two things. The MMT part, it’s your classic capitulation. We don’t know how to solve any of the world’s
problems, because that equation is ongoing. Because we have demographics that are sending
a very clear signal. Working age population, by the way, I’ve posted
out a few times. I find it fascinating. For the first time ever, the growth in working
age population is actually going negative. That tells you everything you need to know. There’s a huge demographic change going on
as the baby boomers were retiring, how do you produce growth with those numbers, unless
you believe in some AI productivity fantasy, which we don’t have evidence for that yet. MMT to me is the ultimate absurdity of it
all. Free party, free credit. We keep printing money and there’s no consequences. MMT adherence will obviously push back hard
on this, but even central bankers like Jay Powell are very much opposed to MMT. I personally think is a fantasy, as well. In terms of your question about fiscal policy,
can now governments come up with infrastructure programs or what have you to really push that
equation? This is where I’m going to have a different
take on everything. Now, this brings me back to what we’re seeing
in the political sphere in the United States and the United Kingdom, in Germany, everywhere
across the west. We have social fragmentation, the likes we
haven’t seen in our lifetimes, at least. It’s hard to see political cohesion anywhere. Germany, for example, used to have three or
four parties, not a six, seven and no one has a majority of any sort. The UK Brexit is a classic example. It’s impossible to come to any agreeable solution
that’s been going on for years. The United States is, impeachment aside, what’s
happening down that front, this fragmentation has been going on for at least 20 years. It just keeps getting worse and worse and
worse, and how do you get to a complex policy solution that enables you to actually implement
structural solutions if you can’t agree on a common reality, and there’s no common reality
on anything right now. Although to be fair, Democrats and Republicans
in the US always agree to spend more money, that’s what we just saw again in this latest
budget round. I remain unconvinced that fiscal– even though
I hear Draghi claiming for more fiscal spending, I don’t see the political cohesion to bring
something like that about– German, interestingly, on a side note, they’re actually running it
surpluses. They’re getting criticized for that, which
makes actually, I think Germany really an interesting place to– if we do have a global
recession, what country is actually able to really deal and stimulate ultimately. They’ve been very disciplined and holding
off on this point, but I suspect they may have more ammunition than anyone else when
we do hit a recession down the road. How do you see the end of the cycle playing
out? I am actually looking for a yearend rally,
because I think what happened in December of 2018 was superbly rare. It happened only once before and that was
in December of 2000. That’s how rare these December dumps are. However, I’m just going by what I know now,
and I don’t know what’s going to happen with the trade deal and this time, the other. What I do know now is basically what I see
in the charts is there’s just another very, very sizable volatility spike to come. I can’t tell you when that comes, it would
maybe make sense for that to happen in October or into November. Then that spike is probably be a buy in markets
for a yearend rally, can see that happening. I expect the Fed to cut rates again in October,
maybe throw another one in December. We’ll see. I think ultimately, the question is, and I’ve
been posting this chart for months now. It’s this broad megaphone pattern. If they can get above it, we can have a massive
all liquidity and ala March 2000. It was just crazy blow off the top. I’m not predicting this. I’d actually don’t want to see that. I think stuff like that is just going to be
horrid ultimately, because it will just exacerbate the pain on the downside. If markets cannot sustain new highs from here,
I think going actually back to an earlier question you asked about historical example,
look closely at 2007. We made a high in July, we made a high in
July this year, then the Fed cut rates in September of 2007. Because that was their response when subprime
was contained. Don’t worry about– there is no recession. That’s the same narrative we’re hearing now,
there’s not going to be a recession. The recession came only two months after–
three months after the Fed cut rates. It came in December of 2007, when no one saw
or admitted a recession was coming. After that rate cut in 2007 in September,
markets peaked in October, and that was it. No one– this is the fascinating thing, see,
market tops are only known in hindsight with enough distance. They’re not apparent or anyone at the time. That’s why I’m just using that as an interesting
example and as a threshold to say we must make new highs from here or we’re risking,
we’re actually made a double top in July and in September of this year, so I think people
need to watch the price action very carefully from here. Just finishing up on 2007, when markets made
on marginal new high in October of 2007, and the Fed was cutting rates, Wall Street projected
price targets of 1500 to 1600 to 1700 for 2008. All of them. All of them were bullish in December, not
knowing that the session officially actually started in December of 2007. The S&P close the year at 800, 880, something
like that, cut in half, basically. I think what we all need to be closely watching
for is efficacy of what happens on the trade front, efficacy on what happens with the central
banks and the price action in the charts. Do we see participation coming from the small
caps, transports and the banking sector? Yes or no? Will we see sustainable new highs or not? If we don’t see new highs, risk for double
top, watch what the VIX is doing and then it remains a range bound market for now with
opportunities and both sides but I think there’s some critical thresholds that have taken place. Punch line, no bull market without central
bank intervention. It remains an artificial construct. I am worried that all of us have a warped
perception of value of what markets should be doing because, let’s be very clear here,
we would not be at new highs in or we would not have hit these current levels of 3000
in the S&P were it not for complete central bank capitulation, four rate cuts, jawboning
trade optimism, all these valuations have to be justified at the end of the day. You cannot lose one of these equations and
so markets remain artificially inflated. The question is if, like in 2000, or in 2007,
central banks efficacy loses out. Remember, they had to cut rates by over 500
basis points to stop the bleeding back then, and now, they barely have 200 basis points
to work with.


92 thoughts on “How 2019’s Market Top Parallels to the Time Right Before the 2008 Financial Crisis (w/ Sven Henrich)”

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  • Earnings, forward earnings, free cash flow, new business, economical sentiment and technical bullish divergences bouncing off prior resistance. That's all I need

  • The anointed remnant were sealed on 4th October 2008. Revelation 7: 1-3. This came with an 'earthquake' on the financial system that was called the 'FC'. This crisis went to the EU; who have not recovered from its effects. Interest rates of -.5% exists, along with money printing. The collapse of Deutsche bank; as it has filed for bankruptcy….means the loss of the Euro, and a worldwide financial meltdown Psalms 46: 4-6 that comes with WARS Jeremiah 25: 24-26 and WRATH Revelation 11; 18. EVEN as far away as Australia; before the bushfire emergency is over; the banks and Australian currency will have collapsed in the meltdown. Psalms 46: 6 Revelation 18: 17 Ezekiel 7: 19.
    Men having dropped a BOMB onto the banking system; it will melt down completely. WE are at the beginning of an extinction -level event based on wrath Revelation 11: 18.
    27 countries with violent protests and riots in Q4 of 2019 will be impacted by a worldwide financial collapse due to events already visible. They are:
    Spain, Sudan, Russia, Egypt, Uganda, Indonesia, Ukraine, Peru, Hong Kong, Zimbabwe, Colombia, France, Turkey, Venezuela, The Netherlands, Ethiopia, Brazil, Malawi, Algeria, Iraq, Haiti, Ecuador, Lebanon, Chile, Guinea, Pakistan and Bolivia.

    These things reflect the gradual economic saddening; along with discontent with governments, as a worldwide phenomenon Wrath Revelation 11: 18 is appearing.

  • The collapse of the EURO Ezekiel 7: 19 Psalms 46: 4-6 Revelation 18: 17 is the bellwether of the lost financial system; as a BOMB has been dropped onto the banking system; that is a lot worse than Lehman event. The EU in in FAMINE; and NATO in the EU are flat on their backs when the Russians arrive there. Ezekiel 7: 19-22.

  • there is no trade DEAL there is only DECEPTION the flailing of arms as uncle sam s CIA CLOWNS drowns in china /russian geo political MILATARY ECONOMIC SUCESS

  • There will be no trade deal. The economy is artificially being held up, and when Trump gets booted out of office, either by the voters or impeachment, the market will collapse.

  • For now I will profit from the FEDs predictable moves like QE and soon to be negative interest rates. But when SHTF and I’m thinking we’re still a year away. I’ll be glad I have food water energy and weapons to live

  • Germany? Deutsche Bank is broke, busted and bankrupt. The whole REPO mess is just the FED and CB's pumping money into another failed bank, pumping worthless money into a dead body. Germany is DOA. They just don't know it yet.

  • Yes, Germany is financially stable but it is socially unstable and the incursion of a large unassimilated population who are relatively unproductive will be crushing in a downturn.

  • 2008 did not have a market top. We got into trouble when it was discovered that Residential Mortgage Loans were unsecured. There were massive overnight losses in the secondary mortgage market that had Ripple effects throughout the entire economy and liquidity dried up…

  • The World Through My Mind says:

    This gentleman is so correct.. The Federal Reserve has taken away FREE MARKETS and replaced it with a totally manipulated mess. Is our Congress totally asleep???

  • Chairman Powell said we will need 5% of rate cuts in the next recession. I guess this is likely to be 1.7% (rates to 0%) + 3.3% (Not QE4, Not QE5 and share repurchases)

  • Information is power as we all know and the video you put up here reveals that as well. Bitcoin has been the trend of late and many people are still ignorant of this wealth creation technique. I was trading for loss previously because I was not having the required knowledge, skills, and experience on how to trade. It was a devastating experience but I was not relented because I am a great believer of the Bitcoin movement and trading at loss should not be what will weigh me down. My effort was rewarded when I met Mr. David Loghan a trader popularly known as TradeMaster. He has been mentioned to several traders and most Youtuber because his trading strategies always provide guaranteed profit and I was happy to lay my hands on his strategies that he used to trade. He provided me with basic and advanced trading strategies on how I will make a profit just like a rinse and repeat process to do every day and following this I was able to recover all that I have lost due to my wrong trading strategies implemented before. Now I see profit pouring in daily and I will be pleased to share it with this awesome community that his strategies work and if you are looking to change your portfolio status you can take the step by contacting Mr. David Loghan today through telgram @davidloghan

  • Markets must be allowed to self correct i.e. self manage. I'm not sure if it's the egos of those in the Fed. that drives them to interfere with markets, or are they simply driven by their masters, who are consumed by massing more and more personal wealth. It might be both drivers, which only increases the possibility that they will make a gross miscalculation, and everyone will get hammered. Lastly, I do believe that it's the later driver noted above, but it's for each investor to figure that out. I do know that all of these objectives do create an outcome that hurts one group over and over again. That group is the Saver Class, and within that group it is the elderly that are hurt the most, since they expected to live in retirement off of their lifelong savings. Ask yourself …. why target the elderly? The answer is very troubling, and has little to do with finance.

  • Nick Pappagiorgio says:

    He's giving too much of a weight to the stock market. It's a marginal part of economy. The price can be moved by a momentum started by a crowd of highly leveraged dudes from outside the US like me, Japanese banks etc. It's a BS indicator, Wall-street babies crying for liquidity. After they cash out from gold they buy again when it's low. It's an inflation of all currencies along with the dollar. How is gold able to remain so low? They gotta be shorting it 🙂

  • 21:20 – no evidence of AI reducing the need for workers? He's not looking very closely. It's very real and already here – ask a doc review attorney replaced by software.

  • This guy is really smart but seems to be a master of saying a whole lot and nothing at all at the same time. He summarizes the problem and says it could go up or down, left or right… Thanks… That was close to an hour of non-actionable advice. That is an art. He's like those brokers with a GED that go get a series 7 and build a multi-hundred million dollar book by taking Adderall and jabbering. It sounds like he has it all figured out, but is saying nothing.

  • ContrarianExpatriate says:

    These graphic correlations of doom are worthless because they do not account for Keynesian and Federal Reserve actions. I am no fan of the Fed, but it can delay corrections and crashes almost indefinitely.

  • I'm with you all the way with regards to resenting the Federal Reserve mucking about with the natural rate of borrowing, but alas….here we are.

    But as to Powell's job description and "calm[ing] markets down"? Here's section 2A of the Federal Reserve Act

    Section 2A. Monetary policy objectives

    The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

    [12 USC 225a. As added by act of November 16, 1977 (91 Stat. 1387) and amended by acts of October 27, 1978 (92 Stat. 1897); Aug. 23, 1988 (102 Stat. 1375); and Dec. 27, 2000 (114 Stat. 3028).]

    Sounds like central bank intervention or "maintain[ence]" is all part of the playbook, pretty much literally. Markets are "supposed" to be free flowing, but again, that doesn't look like that'll be the case nor will it be for the foreseeable future — even if that sounds preferable to what we have now.

  • Companies have been in lay off mode all year! What are you talking about? Real unemployment is worse than in 2008 and 2009. The real unemployment rate is 30%.

  • We never see any predictions of when the S & P bottoms at 500-600 during the depth of the implosion.They all seem to act like the economy and the markets are real.

  • garyseeseverything says:

    Bubbles everywhere nowhere to hide money! Realestate doubles last 5 years, stocks blown bigot, credit overstretched, pensions underinvested due to bonds, Europe and Japan are done, China rising power, yikes 10X over!!!

  • Get out of this "Recession" mindset. The global economy is already in recession, and in freefall. Let's talk "Depression" in 2020/2021.

  • It was refreshing when the federal reserve realized that overnight lending needed a trillion dollar booster shot and avoided the Congress to FIX IT? It would be tragic if another Republican President had to beg the Saudis again for a bail out?

  • SO trade war or no trade war earnings are in the toilet. WHY well too much debt and the masses not enough income. american consumers are tapped. and despite the rise of china american consumers are still the dominant drivers. EU consumption has been destroyed by lagard and dragis let them eat cake neg rates and austerity and tax tax tax. we need leadership that understands the ecology of economies which we dont have. its like over fishing, eventually theres no more fish. 2cts

  • The bottom line is capitalism is dead,we have a communist government now and the satanic bankers have looted the world and the days of eating soylent green are near

  • Battenkill Rambler says:

    Never take advice from a European on any topic other than food, wine, or perfume…and then get confirmation of any recommendations from a real expert. Just because they “sound smart” doesn’t mean they are…

  • Great discussion Sven. The DOW made a new high Nov 15th. I hope it's the last one. I hope to see DOW 14,000 in Nov 2020, down 50%.

  • Thanks, Sven! You should never borrow your way into prosperity. Government has taken advantage of the naïve public. In 1920's, you could buy stocks on 5% margin, how did that eventually end?

  • what goes up must come down .. traders make monies out of these swings .. nobody wants a market crash, and despite all those so called analyses all kinds of predictions are just guesswork .. ask the money (market is only part of it) movers, they influence where market goes

  • Spoos up 100 handles from date of this interview. What does that mean? Simple, trade what is and not what should be, could be, etc. 💯

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