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What Could Go Wrong?

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Posted by John Mauldin - Mauldin Economics

on Monday, 02 January 2017 06:36

Trumping DC
Canadian Bubble
Crowded Exits in Europe
Asian Angst
DC, Florida, the Caymans, and a Few Final 2016 Thoughts

“Experience is simply the name we give our mistakes.”
– Oscar Wilde

“Mistakes are the usual bridge between inexperience and wisdom.”
– Phyllis Theroux

“Economists are often asked to predict what the economy is going to do. But economic predictions require predicting what politicians are going to do – and nothing is more unpredictable.”
– Thomas Sowell

161231-01

We’ve reached that wonderful time of year when financial pundits pull out their forecaster hats and take a crack at the future. This time the exercise is particularly interesting because we’re at several turning points. Any one of them could remake the entire year overnight. I should probably say up front that I am actually somewhat optimistic about 2017 – optimistic, meaning I think we Muddle Through – but that’s a lot better outcome than I was expecting five months ago. And since my annual forecast has been “Muddle Through” for about six years now (which has been turned out to be the correct forecast), then, given all the speed bumps in front of us, this could be the year where I’m spectacularly wrong. Midcourse corrections may be warranted.



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Asset protection

Three Mini-Bubbles Are Bursting

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Posted by John Rubino - DollarCollapse.com

on Thursday, 29 December 2016 07:47

4716964809 d5b0b6aa63The world has gotten so used to ultra-low interest rates that even economists and money managers seem to be shocked by what happens when rates start creeping back towards normal levels.

Some of the mini-bubbles that formed in an essentially free-money environment are now starting to leak. Notably:

US Housing

While the action in this sector is nothing like the raging mania of the 2000s, prices in many hot US markets are at all-time highs, while affordability is at or near an all-time low. And now rising mortgage rates are beginning to bite.

Pending Home Sales Reflect "Dispirited" Buyers



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Asset protection

More on crashing sovereign debt markets …

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Posted by Larry Edelson - Money & Markets

on Thursday, 22 December 2016 10:32

One thing that is going to become abundantly clear to every living soul on the planet over the next few years is how much loss of wealth is going to occur as a result of this great sovereign debt crisis that is unfolding …

And which I’ve been predicting since late 2015.

I may have been a bit early, but since its peak in July of this year, the 30-year U.S. Treasury has lost $226,984 of its value (based on $1,000,000 face value bond), an astounding 19 percent.

The velocity of the damage was even worse starting the day after the U.S. elections through December 15 — as I am penning this column early due to upcoming travel plans and the holidays …

With the 30-year U.S. Treasury losing $108,497 of its value (based on $1,000,000 face value bond), an astounding 10 percent — in just 26 trading days.

The yield on the 10-year Treasury note has shot up to 2.598 percent, a 40 percent jump since the elections. The 30-year yield has rocketed from a low of 2.616 percent on November 8 to its recent 3.18 high, a whopping 21.6 percent rise in just over a month.

That would be like gold rocketing from its recent low of $1,046 on December 3, 2015 to over $1,464 today. Or the Dow Industrials exploding higher from its recent high of 19,966.43 to 24,271 today. Astounding moves no matter how you measure it.

But it’s not just the 10-year interest rate that is rising. Rates on everything from two-year to 30-year terms are soaring. Plus, they’re not just rocketing higher in the United States. Interest rates are soaring all over the world.

So why are rates surging? The answers are simple:

Screen Shot 2016-12-22 at 9.21.41 AMFirst, investors all over the globe are starting to see what I’ve been telling you all along: that the sovereign bond markets of Europe, Japan and the United States is the world’s biggest financial bubble ever and it’s bursting.

There’s simply no way investors are going to keep putting money in bonds with rates so low and Western-style socialist governments’ balance sheets in such horrible shape.

The selling is hitting the bond market from virtually every angle. Overseas investors in our bond market, our creditors, are getting out as fast as they can. According to latest data, they dumped a net $403 billion in U.S. Treasuries over the past 12 months.

Second, bond investors no longer believe central banks can contain the interest rate rise. They’re right. No matter what the Fed says or does, it will not be able to control the actions of tens of millions of investors. Or the actions of the free market.



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Asset protection

Fed: Pathetic

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Posted by Bob Hoye - Institutional Advisors

on Monday, 19 December 2016 06:12

"The Dow, S&P and Nasdaq have made record highs. More importantly, the Transports have as well.

Does this define a new bull market?"

The following is part of Pivotal Events that was published for our subscribers December 8, 2016.

Screen Shot 2016-12-19 at 6.57.22 AM

Perspective

The intriguing headline is about the central banker observing that the market is on the "cusp" of a rise in interest rates. Following the exceptional technical excesses clocked in June, long rates have been rising. Also since then, short rates such as Libor have also been increasing.



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Asset protection

Bursting Bond Bubble Greatest Risk To Secular Bull Market

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Posted by Financial Sense

on Friday, 16 December 2016 08:50

market-breadth

Bullish Outlook

Dave Nicoski is optimistically predisposed to the health of the economy as stocks, the US dollar, interest rates, and oil rise together. He correlates this phenomenon to a “post-World War 2” era when “markets reversed and broke out to new highs right around the ’45-46 period.”

On risk, Dave says the US economy is “truly into a bond bubble,” with “1.7 trillion dollars wiped out of the market” since elections. Equities probably have “advanced to a level in many of those areas in terms of when the rubber meets the road on infrastructure spending,” setting up opportunities for pullbacks in those areas.

....read more HERE

...also from Martin Armstrong:

The Cycle of Assassination & War Bottomed in 2014



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