What Every Investor Needs to Know About the Bond Markets Right Now

Lately, the markets have been hitting serial new highs. There's simply no denying the melt-up we've recently discussed, or even anticipated many months ago, here.

But it's fundamentals that drive the markets and our trading approaches. And right now, there are massive risks beneath this current wave of complacency and optimism.

How do I know?

Easy. Both the bond market and history are telling us so. In fact, they're screaming.

Let me explain why complacency today is a very dangerous thing, despite the party in stocks which we carefully invited you to join the moment the Fed began printing money again in mid-October.

As ever, I'll be blunt...

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Here Are the “Buy” Signals in a Market Gone Crazy

There's one constant underpinning this market: The Fed. It has literally lost its collective mind (not that I feel sorry for them), like headless chickens running aimlessly around the otherwise impressive façade of the Eccles Building.

My daughter says I write about the Fed too much, but there's no way around it: The Fed is the market now.

We've presented plenty of evidence that this cadre of PhDs is simply making up policy as they go; forever scurrying to keep their Wall Street master smiling.

This experiment, of course, ends badly, but in the near-term we also know that when the Fed is pumping steroids (which is to say slashing rates and printing money at the same time), the markets will go up.

In October, the money printers returned, and I mean big time-which prompted me, the jaded macro bear, to pause my fishing trip out West and scream "Party on! The money printer is back!"

Since then, and right on cue, the markets have been melting up, as my admittedly "exuberant" articles made fairly clear last week - and which we immodestly predicted even earlier in the year.

Why so immodest? Because it's so simple: We knew the Fed, which is nothing more today than Wall Street's harlot, would print money as soon as the market needed it.

Since my autumn fishing trip, we've watched stocks fly higher than my fly rod, posting new gains week after week after week. That's precisely why I told you to buy the S&P and ride the most hated bull market we've ever seen...

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What No One Is Telling You: How IPO Unicorns Are Made

Risky IPOs, overvalued tech unicorns, and a world without recessions are all in vogue these days as investors make the classic bull assumption that tomorrow will always mirror yesterday.

With the Fed sending more steroids into the longest (and most hated) business cycle on record, one can't blame investors for forgetting about bears and dreaming about unicorns.

But more informed investors may want to have a look under the hood of the mutual funds they hold, for there might be a number of unsavory unicorns wreaking havoc on their money.

So shorten your stirrups, it's a nasty ride... Read more »

The Fed Just Gave You a Buy Signal for These Three Securities

Last week, the Fed rolled out the money printers yet again, to engage in a $60 billion monthly bailout of the Treasury market - specifically in the short-duration (six months or less) T-Bill space.

Annualized, this money-printing adds up to another $720 billion in fiat money creation and nosebleed-level deficit financing.

Holy cow... here we go again. Pure desperation mode at the Fed - and a golden opportunity for those who see right through it.

Let's discuss...

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German Lessons – Dire Warnings from Overseas

Things are falling apart across the Atlantic, and the implications for U.S. investors are now loud and clear.

As an American who grew up on baseball, yet was educated and employed (partly) in Germany with a residence today in France, I suppose it's fair to say I have a global perspective as to both the realities and stereotypes of certain cultural and financial nuances.

As for Germany, well, it conjures up a great deal of stereotypes and ideas, both fair and unfair. I won't defend or address those here.

However, what most of us on both sides of the Atlantic (including the French...) can agree upon is that Germany has a uniquely strong passion for disciplined spending, thrifty saving, and currency risk sensitivity.

This land of Max Weber, along with blunt speak economists like Ludwig von Mises or Walter Eucken, is all too aware (remember Weimar) of what happens when wheel barrels of worthless money are rolled out to solve chronic debt problems.

In short (kurz gesagt): It doesn't work.

Here's why... Read more »

The Ticking Time Bomb that Almost No One Sees Coming

There are just not enough dollars today to meet the fantastic array of nuanced and complex dollar demand in both U.S. and global markets.

This means big, big trouble ahead - and hence money printing at full speed.

How do we know? Well, we've seen this movie before-in fact, we're part of the system that wrote the script.
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Grim Week Bodes Poorly for Your Pocketbook – What to Do Now

Welcome back to What's Happening Now, following a grim week for investors, especially those hanging on for that last evasive yet entirely possible "melt-up" in stocks to come should the Fed print more dollars out of thin air.

Beyond (and more important than) the impeachment proceedings launched in the U.S. last week, China trade negotiations fell off track again as new U.S. threats to contain even passive investing in China, along with Chinese company listings on U.S. Exchanges, were floated.

A resolution of the trade war would send markets temporarily much higher; as of today, however, such a resolution remains elusive.

In the meantime, U.S. manufacturing data continued to plummet... to below breakeven.

And on the Central Bank front, necessary Fed repo rescues alarmed the U.S. as chaos at the European Central Bank mounted.

In short, a lot is going on and not much of it is objectively good, though further Fed "stimulus" could easily buy us more time and highs.

Let's discuss...

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