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Have you viewed the brand new video presentation Martin Weiss and I have put together yet? Have you clicked here to watch America’s Financial Doomsday — at absolutely no cost?
I sure as heck hope so. Because I’m convinced more than ever that we are entering a new bear market, and a double-dip recession. And if you do NOT follow the powerful, step-by-step instructions we give here — to both protect your wealth and profit — I believe you’re going to regret it.
Why do I say that?
Because the evidence of a renewed bear market and economic slump is irrefutable. Just consider:
* The Dow has dropped 2,000 points in less than three months …
* The S&P 500 has dropped roughly 20 percent — the classic definition of a bear market …
* The Russell 2000 Index of smaller capitalization stocks just dropped to the lowest in 13 months …
As if that weren’t enough, the cost of obtaining dollars to pay off dollar-based loans is surging to three-year highs in Europe. Credit default swap costs for insurance on bank bonds — and European sovereign debt — is at or near record highs. Junk bond yields are soaring, while issuance of mortgage bonds and leveraged loans is plunging. Those are straightforward credit market indicators of extreme stress.
Meanwhile, on the economic front:
* The Conference Board’s index that tracks how tough it is for consumers to find a job surged to the highest since 1983 …
* Challenger, Gray & Christmas tracked more than 115,000 corporate layoff announcements in September, the most since April 2009!
* Home construction dropped 5.3 percent in August, pending home sales fell for the second month in a row, and new home sales slumped to the lowest since February.
Why a Replay of 2008
Is All but Inevitable!
Why are we back in the soup again? Why did the great post-recession rally fizzle out? Simple: We tried to paper over our problems with the same failed policies that got us into the mess in the first place!
We tried to combat a debt crisis brought about by borrowing and spending too much money we didn’t have by borrowing and spending even MORE money we didn’t have!
We tried to combat excessive leverage brought about by keeping interest rates too low and money too easy by pushing rates even lower and easing monetary policy even further!
We tried to deal with mega-banks that had delved too deeply in complex financial instruments by bailing them out and merging them into even BIGGER mega-institutions, rather than letting weak banks fail and chopping them up into more manageable entities!
Most importantly, and tragically, policymakers from Washington to Frankfurt to Tokyo learned the wrong lesson from the 2008 meltdown. They decided we should have a policy of “No more Lehmans” — regardless of the costs.
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| “This crisis has the potential to be a lot worse than Lehman Brothers.” — George Soros, hedge fund investor. |
So now rather than just having a bunch of troubled banks dragging us down, we have troubled banks AND troubled sovereign nations! Greece is already on the verge of default, while Portugal and Ireland aren’t far behind.
Italy’s debt rating was just slashed three notches by Moody’s, while France’s debt costs are soaring due to fear its AAA is in jeopardy. Even the core of Europe — Germany — is taking heat as its potential bailout tab climbs sky-high!
Your Crucial Steps
for Self-Defense!
Nobody would like to be optimistic more than me. But as I’ve said repeatedly, when it comes to the markets, I have to be a REALIST. Hope has no place in investing strategy. So I continue to counsel you to:
- Eliminate most of your stock exposure, taking advantage of bear market rallies to do so at better prices.
- Eliminate exposure to real estate and riskier bonds, with the understanding that higher REIT or junk bond YIELDS don’t mean squat when the PRICE of your income-generating investments is tanking.
- Add inverse ETFs as hedges and profit-generating vehicles on rallies until the big-picture fundamental and technical outlook changes.
Again, you’ll find much more detailed instructions in our America’s Financial Doomsday video, accessible online for free here.
Until next time,
Mike
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
{ 25 comments }
Bear Market??..huh??…at 11,200 on the DOW??..
dropped 2,000 points over 3 months and that’s a game changer for you??…you want people to eliminate their stock positions because of this???……did it stay down there??…
.when was the DOW at 13, 200??….
I have the DOW plummeting upward over 1,000 points since the intraday low earlier this week??..I’m very glad I didn’t eliminate my stock portfolio…I’m very happy I added to my positions…
Frances
Whether you agree or not we are in a secular bear market that began in the U.S. nearly eleven years ago. Yes there are bounces and depending on how close you are to the swings you will win or lose a bit. Make no mistake where this market is going and aggressive collapses in sentiment have not happened yet. Mike has given all who wish to listen, fair warning.
Francis,
By April 2012, you will be WIPED OUT if you hold equities.
Once Greece gets bailed out and does not default the markets will rebound faster then ever. The dow will be back to 13000 plus in no time. PE ratios will be unrealistic but that won’t matter because people buy on momentum and technical analysis not fundamentals. You will make lots of money while the bears continue to rattle on about the end of the stock market. Then after we get concrete economic policy set and the banks and corporations unleash their pent up trillions back into the economy the stock markets will reach astronomical levels. Only thing preventing a recovery now is gridlock in Washington on economic policy and taxes. Keep investing. Do not contribute to the self fulfilled doomsday prophecy.
Francis, you appear to be an incredibly dense individual. I watched the skyrocketing market on Tuesday, and the continued upward move wed and Thursday; all the while asking, “wtf is going on here?”
None of the dynamics in the financial world has changed! The so-called POSITIVE news, which was supposedly driving the change in market direction, was nothing less than double speak. Yet, the DOW changed direction, right at the precipice of the 11000 mark. As if someone (as if we couldn’t identify “who”) was manipulating the market, to avoid the psychological impact on the markets, had we crossed that threshold.
Francis – do you REALLY understand whats going on, in the big picture? Are you REALLY confident you aren’t one of the morons that will be next to watch his investments evaporate, right before your eye’s? The tragedy for the likes of you is, it happens in moments, even seconds!
While you write, implying Mike Larson is providing erroneous, even bad information, you offer NOTHING to substantiate your opposition to his successful track record. Think long term, because that’s where HE will be proven accurate regarding the BIG picture again; and you? You will be in the ever growing line of people begging for a handout!
Sorry, forgot to add my two cents to your question, “when was the DOW at 13, 200??….”
For the record, the Dow reached a high of 14,198.1 on 10/8/07. I’m pretty confident that you can find the Dow positioned at 13,200 (give or take) at several points before, and after that high?
I’m not sure how this question is pertinent, unless you intend to nit-pick over specific market points, rather than comprehend the POINT of his article; which is very sound, based on the real world “dynamics” I see.
Chris,
Why don’t you admit it…you listened to Weiss and missed a great oppty to buy into the lows early this week. The Weiss pundits provide free and lousy advice.
Bear market began in May of 2011 (it was a deep bear correction), and the New Bull market is started 4 days ago (October 3, 20110).
I have to agree with the guy’s comment right above this. You folks at money and markets are permabears, I think. Inverse ETFs are dangerous because of the reverse compounding feature and the “daily resets.” If you hold these and the market goes through a period of doing nothing you can lose money in them because they chew you up eventually.
Also, where do you see the DOW in a bear market? Look at it today (10/7/2011). The Fed has a printing press. Don’t fight the Fed.
Yea…I’m sorry…I’m dense…only up 300 % the last week in trades….Mike can’t tell you when the corrections are coming..never could..never can…but..I can tell you exactly when the market has 1,000 point upswings…I’ll let you figure it out…I don’t give away or sell the golden goose…why trust someone who does??..
You fail the psychology test…..
By the way….there will be no bear market until the DXY hits 88…I stated my premise for this on Aug 27 in a jack Crooks column whenhe stated the dollar trade was dead….trade…implying short term…yeah…the trade is off right at the bottom….I’m up 186 % on my currency trades since…
I’ve seen this before says dafoe..
Mike is the hedgehog…I’m the fox…
I do not, as a rule, live in the headlines…but..here’s a tit for tat…
http://www.reuters.com/article/2011/10/07/us-markets-stocks-idUSTRE7850EA20111007
BTW…here’s a golden-goose tip…I love INVERSE ETF’s!!!!…I love the ETF’s designed to take advantage of a collapsing DOW…I just take out inverse positions on them…cheap, cheap, cheap….max-profits…
Cheaper than placing positions on ETFs designed to take advantage of a RISING DOW……a simple straddle position is gravy trading…
Look for the DOW to complete a 1,500 point upward plummet next week from the intraday low from early last week…wow…1,500 point upswing on an inverse ETF…$$$$$$$$$
I’m am so dense!!!…..
Frances, I apologize for my offensive inference to your mental capacities.
I have become increasingly disgusted with the media voice boxes of the political and financial movers and shakers. Daily, I see ridiculous efforts to hide the ugly facts regarding the current world crisis(s). You would be right in stating there is nothing new in that, but I’m saying it has become so bizarre. Much of what I hear seems to come right out of the Twilight zone.
I am astounded when I see moves in the markets, such as occurred this past week, while none of the underlying factors have changed. The media releases insanely ridiculous claims, such as the 144,000 increase in employment, yet 28% of those jobs were returning from layoff at a single employer. Since government numbers and media sewage are purely manipulate data, I am compelled to wonder about the details of the other 72%.
When I see massive, split second spikes explained away as, “someone at GS or JPM “hitting the wrong button on their trading software,”†yet, everyone shrugs their shoulders and move on, as if nothing happened.
Let’s not overlook the revelation…………
“It wasn’t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.— – htttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFeyqdzYcizc
“Coincidental†moves in the market, such as occurred last week, are no surprise to me! What DOES surprise, and stuns me into disbelief, is how “anyone” can declare that THEY have any clue what is going on in the markets, short term.
Although the collusion of governments and world bankers cannot deny, or hide the fact that the world is going to shit, in a hand basket, they can, and clearly do manipulate the daily reactions of the markets, with their absurd news releases. If the news releases don’t do the trick, a simple push of a button, to create the presumption “the market” is moving a certain way, clearly does!
Francis, you state that you expect a 1500 point bounce next week. I mean no offense, but if that happens, I would presume you were no luckier on your GUESS, than anyone dropping a coin in a slot machine while declaring “this time it’s going to hit big.”
Your reference to the reuters article is a case in point, I find the defensive points that the market avoided the bear, to be indefensible. The bottom didn’t break that time; it could very well do so next week!
You could be correct with your prediction, but “I” wouldn’t take comfort knowing my guess, was based on the absurdities presented by the spoon fed media.
For the record, I am Inverse (ultra) ETF’s
Good call Mike on having this mini forum and I like seeing both believers and nonbelievers expressing themselves. Mike, you saved me a ton last year when I was trading and you kept stating to watch out for the European debt crisis when it got kicked off.
When Greece got the ball rolling the first thing I did was announce to the office I was liquidating all trades and was going to stay flat until further notice. That was on May 5th last year. Imagine the astonishment on everyone’s faces the next day when the so called “flash crash†happened.
While I will never be a supporter of ETF’s they are another trading tool that some will like and some won’t.
There is nothing the matter with having a bear market attitude as I use that against the entire positive everything is happy daze crowd on TV.
You put out warnings that I think are good to be aware of; sure, you have a motive and you have a plan and I have no problem with how you do business, hope you make a mint.
“entering a new bear market, and a double-dip recession”
That is a best case senario.
Look how the market is coming back…..a whopping 700+ points in the last 5 sessions. Hey Mike, how’s that Dow 7K prediction holding lately?
Thank God for people like you have come up with the true happenings of today. I’m so glad and pleased that God has let me find this program. I’m also glad for being where I am today for the wisdom I believe God has led me.I try to warn people. I ask for cash on a 100,000 false bill and get attention and then show a small paper 1$ bill that shows them what is happening. I’m sorry to say they still don’t get the message. It’s just like trying to tell them about Jesus and what our Father God has accomplished for us and He has a pathway for all of us to take if we tune into Him and the instructions in His Word,the Bible.
It’s almost here….just 48 HRS away…Are you ready??….are you ready???….massive run into the year end is almost upon us….12,888 here we come….
I can’t believe Larsen’s Bear Market strategy is to tell everyone to get out of their stock positions….that’s a great starategy!!!!!….come on…have you never seen a Bear market before??…this is the strategy?????>..
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I like to refer to Weiss, Larson, etc. as “MARTIN & the DOOMERs”…some kind of depressed/emo boy band. They definitely are perma-bears.
ba-ba-ba-baby….boom…
http://www.bloomberg.com/news/2011-10-12/credit-managers-dealing-with-manufacturers-show-lower-u-s-recession-risk.html
DOW plummeted upward 1,000 points in 6 business days….
Will all you Bulls please check back in November before you jump off a bridge?
http://money.msn.com/investment-advice/article.aspx?post=f2fcabcc-6d0a-4dc4-8e92-c86c8797cf42
You tell them, Frances. I also bought the dip. Nice profits in gold, silver, miners, energy, emerging markets. Don’t worry, you bears, I use STOPS to protect my huge gains.
It’s heeeeereeee……just like i predicted…48 HRS later….the coiled snake is ready to ride the crest into the end of year…
..and..95 % of the readers of this column have no idea why….
Even Mike in 10/14/2011 column (today) says we’re gonna rally into year’s end…but..he doesn’t know really why..
I do…..
Right on queue….I have to apologize. I predicted a 1,500 point run up by the end of this week….See my entry above..way above…It was only a 1,400 point run-up in 8 business days…
Sorry….My inverse, inverse ETF positions netted 388 % profit over that time….got in dirt cheap the week before…same with my currency plays from 45 days ago….lost a little from earlier….138 % net profit…
18,416 extra dollars in my pocket… not a bad 8 days of “work”….
I love being dense….I suggest a certain person above take a physics class and realize how important density is to his well-being….