re: There are some major issues lurking in the US financial markets

In other news, not sure if you are an investor in AMZN or not but today marks its short to intermediate term top.

You're welcome

I know EXACTLY who both insecure downvotes ALWAYS are. Same thing happens to Doc Fenton who always gives great insights. SOME (not all) comments are for entertainment purposes but at least I am always willing to MAKE a call unlike most on here. I give out exactly what continues to work for myself. Just want to share some.

This thread is still going?

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Every trade I have posted has been successful.

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Oh, you’re one of those

In the spirit of trying to get things back on track here a little bit, there are a whole bunch of interesting things to discuss over the past several days, such as:

#1. The markets for interest rate swaps are starting to behave as predicting the Fed to cut interest rates in 2019. (Additionally, I think the yield curve inversion process is slowly churning toward the inevitable, albeit with some occasional action in the steepening direction.)

#2. High yield credit spreads have just experienced huge whipsaw action, dropping sharply and stabilizing from prior highs around 1/3. The VIX also continues to drop. (I don't think either of these trends will last for many more days.)

#3. Germany seems to be entering an industrial recession, which might put pressure on Deutsche Bank if it causes European credit spreads to begin widening again. (Other firms like SoftBank and GE may also be in trouble, and Sears demonstrates the continuing death of big retail.)

#4. The data laundering allegation with Manafort & Kilimnik will likely up the public pressure already on Facebook. More is coming from Mueller. Meanwhile for Apple, the shocking Q4 guidance from Samsung doesn't portend good things for the tech space. (Although on the positive side, the rollout of 5G technology should be a boon for tech in 2019.)

#5. Some believe that the housing and mortgage crisis is far from over. But the Chinese middle class has been part of what's been propping up U.S. home prices so far. That's classic asset bubble behavior for a foreign country. I know we've had serious warnings about China for about 15 years now, but their credit problem has gone beyond public debt and loans to SOEs.

#6. Steve Eisman, of "The Big Short" fame, has joined the growing chorus of fund managers (see Druckenmiller, Dalio, Hussman, Felder, etc.) warning about the current state of markets.



On the subject of my recent speculations of this possibly being the last clearing rally before a big plunge down (making what happened in the 4Q of 2018 mere tremors), I now feel a lot better, and am now better off, for having exiting my short positions from 12/13 - 12/21 last year.

On 12/27/2018, based on the "compression" of the U.S. equities market, Hussman wrote, "Technicals would normalize with a retrace to 2580-2630, but even I can't rely on that."

Well based on the futures market, we will likely be there at tomorrow's opening bell. Now Hussman doesn't reveal the secret sauce of his proprietary "market internals", and even he admits that it's not highly reliable... BUT, we are now back in the danger zone for a plunge I think.

Based on logical reasoning, I surmised that the White House was planning something to give the markets a nice bump with disseminating positive news to appear to resolve the federal budget standoff and the U.S.-China trade negotiations. Nothing sharp has happened yet, so I'm staying in cash for now, but I'm starting to wonder if the markets might be trickling up in a manner that is starting to have these market bounces already baked in the cake. So I want to be calm and wait at least another week to make sure these bounces happen, but I'm starting to get antsy and worry about a big event triggering a plunge before I'm able to get off the sidelines and into the game. I am trying hard to focus on patience.

Just about a month ago, Eisman is on record saying that a recession is not looming


ETA: but if you take him at face value on what he recently said, he’s talking about the corporate bond market

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#6. Steve Eisman, of "The Big Short" fame, has joined the growing chorus of fund managers (see Druckenmiller, Dalio, Hussman, Felder, etc.) warning about the current state of markets.

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Your link says Eisman was only referring to the lower-rated investment-grade corporate bond market.

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-Steve Eisman, the "Big Short" investor who called the subprime market meltdown, is warning about lower-rated investment-grade corporate debt.

Steve Eisman, immortalized in the Michael Lewis book "The Big Short," is the latest to issue a warning about company debt at the lowest rung of the investment-grade ladder.

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And in the same article you linked was this quote:

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Eisman said he doesn't see a recession coming,

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It appears you're cherry-picking and maybe even misrepresenting quotes from articles out of confirmation bias.

Here comes your serial downvoter. Both he AND his alter

Would the Fed lose all credibility by market participants if they just cut the FF rate back to 0.25 bps? I think the dollar is going to get fricked over the next decade when this is all said and done.

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You actually think they (MSM) will let anyone tell the people that a recession is coming

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Ya man, hysteria really gets clicks, I have to disagree with you on that.

Credibility to maintain their schedule for renormalizing monetary policy? Yes, they would lose it, and people would rightly start to wonder if we will ever escape the ZIRP trap.

I think they'll hold steady for a while, and then cut rates late in the game this year once the writing is on the wall. I also don't think much of what the Fed does this year will matter. I mean, it will matter a lot in terms of triggering market moves from week-to-week, but in the big picture over the whole year, I don't think the Fed will be able to affect it very much.