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No! This is THE most important chart in the world.

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Posted by It's a Mystery

on Friday, 31 October 2014 09:14

Still most read article. Huge volume - MT/Ed

Worldwide equity markets are a nuisance compared to worldwide debt markets. When you understand that derivatives (think leverage) all have interest rate components and have only seen falling yields the past thirty years. You better pay attention to the following chart. When this chart breaks the Fat Lady has sung and it is game over and I do mean over.

image002

That is a six year topping pattern in the benchmark 10 year US Treasury Note. When that angled, complex pattern breaks down chaos will ensue globally. Examine what happened to the Yen when a similar pattern of HALF the duration broke down.

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Harken back to 2008 when the real estate bubble popped. Everything tanked because real estate is illiquid and



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Asset protection

The End of QE, Fed Policy Normalization and the Equity Market

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Posted by Forbes

on Wednesday, 29 October 2014 16:36

UnknownAn Austrian economist’s take on the financial markets & economy

The Federal Reserve is “normalizing” its monetary policies. QE3, the latest installment of its multi-year $3.7 billion asset purchase program is ending this month.  And although its zero interest rate policy(ZIRP) is still fully in force, the Federal Reserve is signaling that as long as the economy continues to improve, interest rates are going up. Though these easy money policies are acknowledged by most investors as the driving force behind the strengthening U.S. economy and, as a derivative, the five-plus year bull run in the equity market, equity investors seem to be taking the Federal Reserve’s normalization plans in stride.  So too the Federal Reserve.  As we posited here, the reason is because equity investors and FOMC members alike believe the Federal Reserve’s easy money policies have worked; that they have finally put the economy on a sustainable, longer-run growth path.  In fact, the economy is doing so well that it’s time to normalize monetary policy.

As we wrote herehere and here, in the end this story will prove to be pure fantasy. The lion’s share of the supposed economic strength we see today is both artificial and unsustainable because it is built on malinvestments born out of the monetary largesse underwritten by the Federal Reserve’s policies. Normalize those policies; i.e., end QE and raise interest rates, and sooner or later those malinvestments will be liquidated. The supposed economic boom will turn to economic bust, and with that, a bust in the publicly traded equities that lay claim to those malinvestments. As Austrian Business Cycle Theory (ABCT) theorists teach, such is the course of every boom-bust cycle. Easy money – whether that originates directly from the central bank or from the central bank supported, fractional reserve banking system – gooses the money supply creating an artificial, unsustainable boom.  The boom will bust when that easy money abates.

.....continue reading HERE



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Asset protection

1.844.SNO.BIRD

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Posted by David Macfarlane

on Friday, 24 October 2014 09:53

weatherWe’ve all heard horror stories of Canadians in the US without travel or medical insurance.

What you may not know about are losses by Canadians who own US recreation or investment properties. Flash floods in Palm Springs and Arizona, wild fire and windstorm damage to name a few. 

If you have questions about your US home, auto, travel or medical protection – we can help.

Call HUB's toll free line 1-844-SNO-BIRD that’s 1-844-766-2473

Or CLICK HERE to email us with a suggested time you would like to be contacted by a HUB cross-border representative. Please include your phone # and hometown.

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Asset protection

1.844.SNO.BIRD

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Posted by MoneyTalks Editor

on Wednesday, 22 October 2014 16:37

weatherWe’ve all heard horror stories of Canadians in the US without travel or medical insurance.

What you may not know about are losses by Canadians who own US recreation or investment properties. Flash floods in Palm Springs and Arizona, wild fire and windstorm damage to name a few. 

If you have questions about your US home, auto, travel or medical protection – we can help.

Call HUB's toll free line 1-844-SNO-BIRD that’s 1-844-766-2473

Or CLICK HERE to email us with a suggested time you would like to be contacted by a HUB cross-border representative. Please include your phone # and hometown.

snobirdbanner



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Asset protection

The Most Ruinous Mistakes an Investor Makes!

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Posted by Larry Edelson - Commodities, Stocks, Technical Analysis

on Wednesday, 22 October 2014 06:03

When I coach investors and traders, I’m often asked what I think are the most common, most ruinous mistakes that investors make. Unfortunately, there are a lot of them.

There are mistakes like risking too much money on a single trade or investment … not using protective stops … not using disciplined money management … trading too often … not doing your homework … taking on too big a position in any market … not diversifying enough … and on and on.

Over time, I will explore each and every one of the above in greater detail, and more, to help you learn how to become a better investor and trader.

But in today’s column, I want to cover what I think is the most dangerous mistake investors make, bar none.

It’s what I call getting caught up in all the “market myths” that are always out there. Or put another way …

It’s having a set of preconceived notions

about what markets can and can’t do.

The fact of the matter is that markets can do whatever they want to do.

Markets are never wrong. Markets are never irrational.

Screen Shot 2014-10-22 at 5.41.42 AMThey are what they are and if you don’t understand a market, it’s not the market’s fault; the fault lies instead with your analysis.

For instance, have you ever heard someone say “a market is defying all logic?”

Or that a market is “disconnected from its underlying fundamentals?”

I’m sure you have. I hear those kinds of phrases all the time on shows on Bloomberg and CNBC.

But the fact of the matter is that …

Markets NEVER defy logic.

And they never defy the fundamentals.

Only people defy logic. Only people can make such statements about fundamental forces as well, because when a market is allegedly defying fundamentals, what it’s really doing is operating on fundamental forces that the analyst or investor simply hasn’t figured out yet.

I fully realize that what I’m talking about here is hard to grasp at first. But if you take the time to think deep and hard about what I’m saying, you will elevate your trading and investing to a whole new level. Markets are never wrong. Only people are.

Especially dangerous for most traders and investors is getting caught up in the various “market myths” that are out there.

For instance, how many times have you heard that rising interest rates are bad for the stock market, and that declining rates are good for stocks?

If you’re like any average investor, you’ve heard that theory literally hundreds, if not thousands, of times. Tune into any media show today, and I’m sure you’ll hear it at least once, if not more.

Most stock brokers, and the majority of analysts and newsletter editors, espouse the same causal relationship between interest rates and stock prices.

But the fact of the matter, the plain truth, is that there is no “standard relationship” between interest rates and stock prices. Period.

Consider the period from March 2000 to October 2002, where the Federal Funds rate declined from 5.85 percent to 1.75 percent, and the Nasdaq plunged 78 percent. Put simply, stocks and interest rates went down together! Exactly the opposite of what most would expect.

Or the period from March 2003 to October 2007, where the Federal Funds rate more than tripled and rose from 1.25 percent to 4.75 percent …

And the Dow exploded higher, launching from 7,992 to 13,930 — a 74 percent gain! Stocks and interest rates went higher together!

The fact is that the relationship between interest rates and stock prices varies considerably depending upon a host of factors, including the value of the dollar, inflation and where the economy is in terms of the economic cycle.

But the bottom line is this: Never assume anything and never, ever get caught in conventional thought about a market or you will most likely lose your shirt.

Let’s consider another myth that rising oil prices are bearish for stocks. That’s a bunch of baloney, too.

The fact is that there have been plenty of times when rising oil prices were bullish for stocks … and where falling oil and energy prices were bearish. Exactly the opposite of what most conventional thought tells you.

Or consider the normal view about a country’s widening trade deficit. The common theory is that a widening trade deficit is bad for stock prices and a narrowing deficit is good.

But history proves that it is entirely wrong, and nothing more than a myth.

Fact: From 1976 to 1998, the U.S. trade deficit ballooned from $6.08 billion to $166.14 billion, and guess what? The Dow Jones Industrials went from 848 to 9,343!

In truth, the relationship between the trade deficit or surplus and stock prices is exactly the opposite of what most pundits claim.

Or consider the myth about corporate earnings that says they have to rise for stock prices to continue higher. But from 1973 to 1975, the combined earnings of the S&P 500 companies rose strongly for six consecutive quarters, yet the S&P 500 Index fell more than 24 percent.

Moreover, according to research conducted by analyst Paul Kedrosky, since 1960, the average annual return on the S&P 500 was greatest when earnings were falling at a clip of 10 percent or more … while the smallest returns on the S&P 500 occurred when earnings were growing at up to 10 percent per annum!

In other words, rising corporate earnings does not guarantee rising stock prices, by any means. Nor do falling corporate earnings guarantee falling stock prices!

There are lots of myths or biases out there about relationships between economic fundamentals and markets, or between markets and other markets.

But the fact of the matter is that almost all of them are exactly that: Myths, and nothing more.

The bottom line: To avoid making the biggest investing and trading blunders …

1. Never assume anything when it comes to the markets …

2. Question everything, and most of all …

3. Think independently!

Right now, gold is trying to bounce a bit. But it won’t get far. It’s headed lower overall. So I hope you took me up on my recommendation to hedge any holdings you have via the inverse ETFs I recommended in my past few columns.

The stock market, meanwhile, is also bouncing. But don’t be deceived: It’s headed lower for a while. So here, too, I strongly recommended hedging any positions you can’t exit, for whatever reason, via the inverse ETFs I recommended in my last column.

Stay tuned and best wishes,

Larry

...related:

OFFICIALS LOSING CONTROL AS MARKETS GYRATE WILDLY!



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