Given the extraordinary and historic meltdown underway in the markets, we’ve just recorded interviews with two of the most prominent financial experts we know to make sense of what’s happening, and what’s most likely to come next.
John Hussman is famous for his accurate predictions of both the 2001 and 2008 stock market crises, on which he made tremendous returns for investors. John makes very few public appearances – this is his first media interview in years.
Steen Jakobsen is the Chief Investment officer of Saxo Bank. His macro market and political outlook are in high demand, making him a regular (though often contrarian) on major media such as CNBC and Bloomberg News.
Both have been warning of the structural excesses and instabilities in both the global economy and financial markets that set the stage for the current breakdown we’re witnessing.
That said, they remain extremely concerned that the carnage that has started is far from over.
Below is a “double header” of arguably the best and freshest insight on what’s driving this violent market sell-off and what concerned investors should be paying most attention to at this point.
Excellent analysis by John Hussman. I consider myself pretty well educated on the markets but he came up with insights that had not occurred to me at all.
Two and a half weeks ago when the market took its first big dump, I knew it was time to get out of Dodge. My only real market exposure is at work in a 401-k. Initially I was told that I could only make changes in my account every two weeks, when HR processes payroll. Since we had just had a payroll process 24 hours before I settled in for a nervous two week wait. A chance encounter with our CFO in the kitchen led me to ask whether the two week period applied to both changes in account contents, or just directives on where new money would go. He clarified that we could buy and sell contents of the 401-K on a day by day basis, so five minutes later I had liquidated the bulk of my stock-based positions, and shifted them into the fund based on Treasury bills. Actually, it was more complicated than that, now that I recall, and there was some foreshadowing. I initially tried to just shift from the “Moderate” pre-built portfolio to the “Conservative” portfolio. When I tried to do that portfolio shift the web site came back with an error, saying that changes to the Conservative portfolio were in process, and you could not move funds to it. Coincidental, no? Anyway, I was on pins and needles the next day, Feb 28th, and when I didn’t see the trade reflected late in the day I called the managing company. They told me this was normal, the web site runs 24 hours behind the market, yada yada, check back tomorrow. So on Saturday the 29th I checked the web site, and the trade was showing. 90% out of the market, whew.
The past week I’ve been complacently watching the carnage, secure in the knowledge that my exposure is limited. Imagine my surprise, dismay and rage today when I logged in to clean out those last few positions and transfer them to the Treasury fund and I found those bastards had completely rewound my trades back to Feb 26th without telling me. I will have dropped a another full 10 or 12 percent as a result. Of course I have no screenshots showing the confirmation numbers of the original trades, but you can bet I have a screen shot of today’s trade. Eeeevil.
Let’s prep for this thing long term… The Corona GMO will be with us indefinitely. Waves will come around, particularly in the cold weather season, which is the best habitat for this little GMO gem.
Our small self sufficient communities, which we evolve step by step as the empire collapses, will need corona GMO honeybadger testing as a service to secure community health and allow testing of visitors. A simple biology lab bench can be set up and run by someone with basic training in microbiology. I plan to do that as soon as ELISA test kits become available. Here in Asia such test kits are coming out next week but available first to professional labs. see https://www.japantimes.co.jp/news/2020/03/12/national/kurabo-import-sell-kits-can-detect-new-coronavirus-15-minutes-next-week/
Some interviewees seem to think that China will implode and America or the West will rise and provide all solutions to all problems. I dont agree. Propaganda, 5G, Facebook, Google, WeChat and the rest have the world’s minds locked down. The vast majority of Chinese never heard of the Tiannamin Square incident and have been trained to chant “conspiracy nut!” in response to alternative thinking. Most Americans believe two office buildings were destroyed by jet fuel on 9/11 and any mention of a 3rd building or the impossibility of a footprint fall leads to the trained chant of “conspiracy theorist!” or something like that. Lets face it, we cannot rely on a “people” suddenly learning truth and rising up to revolt and create a beautiful future on their own without guidance from their beloved politicians.
Successful small communities of the future, in their practice of peak prosperity will need community availability of 15 minute corona GMO honey badger testing. Also essential is community based communications that can not be usurped and replaced with propaganda created by the apparatchiks from the dissolving rump of an expended empire. The latter is a requirement to get out of the virtual smart phone matrix.
I suggest that members of this blogspace who are interested can form working groups in these two interpersonal areas of small community peak prosperity: 1. communications, and 2. honeybadger virus testing. I have little time but am slowly making progress in these areas…
Holy Sh*t rototillerman, that is really awful and infuriating news! This is probably happening to others, then will be announced after the fact by fund managers. I’m sorry you got caught in the shrinking exit door even after taking prudent steps to prevent that from happening.
When it all comes down to it these ““markets”” are just digits on a screen at the casino; and TPTB control the digits and the screen, and the numbers are whatever they say they are based on opaque house rules and practices that can change immediately, without warning–even retroactively. (Hence, the case for holding a portion of your wealth in hard assets such as physical PMs.)
But lets bail out the banks to the tune of $500Bin repo, right?? This absolutely crazy!
We’ll see what futures do when they open for the next day. But i doubt $1,5 trillion is enough.
I agree the amounts are ludicrous, but you have to remember:
Between 2008 and 2009 they gave well over $16 trillion of liquidity to the biggest banks on the planet to try and prevent the system from collapsing.
We live in a world that’s 10 years past that, without anything having been fixed.
And we’re not even in a banking crisis yet! Spreads have blown out, but nobody’s gotten downgraded (yet; those’ll be imminent).
All that’s really happened is the Airlines are FUBAR, every company since boeing is drawing down all the credit they can possibly muster, and a lot of hedgefunds/ETFs got liquidated today.
But the bondmarket still works. The credit market still works. The morgage, car loan, credit card, student loan, all those markets/bubbles still work. They’re cracking, but haven’t cracked yet.
So honestly. $1,5T in 2 days is absolutely nothing. That won’t even cover the pension fund losses alone (which haven’t declared insolvency yet and haven’t been bailed out yet; which is also still in the pipeline).
How much did we lose in market value since the high 2 weeks ago? $10+ trillion? in 2 weeks?
Anything under a $10 trillion straight up cash infusion into the system is a disappointment. And i’m not talking over years. I’m talking TARP 2 electric boogaloo.
I like the idea of becoming self sufficient in testing… and of course, I appreciated this;
Most Americans believe two office buildings were destroyed by jet fuel on 9/11 and any mention of a 3rd building or the impossibility of a footprint fall leads to the trained chant of “conspiracy theorist!” or something like that.
Your co-conspiracy theorist, Jim
NASDAQ gapped lower to -0,36% before the PPT sprung into action.
It’s really fighting desperately to have an up day.
Edit: nope it went up to about 0,66% and now it’s bouncing between that and as low as +0,1%.
This is not a convincing overnight rally. This reeks of desperation.
I’m going to go ahead and say Europe is going to drag everything down from the open again. We’re not gonna have a good Friday. Dunno whether it’s as bad as yesterday, commodities are mixed, but bitcoin ain’t buying it and is sticking to it’s downtrend for now.
Probably a down day. Maybe a meh day. But i highly doubt we’ll get a sustained rally at any point.
Traders need a weekend to cool off, have policy makers actually come up with a response this time, as well as just assess the general damage. Several markets cracked for sure, those cracks need to be found before we can continue in earnest. Or yknow, not do anything like last time, play the republican/democrat blame game over another piece of paper, and watch next weeks monday be like this weeks monday. So for the friday… well just batten down the hatches and hope it isn’t too bad i guess.
FWIW, just passing this on from a commenter “Missouri Battleflag”‘s post on Chris’ YT video re: “Informing Family & Friends”:
“Pandemic Bug Out Location. I live in a very secluded area about 20 minutes from Theodosia, Missouri and the Mark Twain National Forest. There is a small plane landing field about a mile away from my home. I am offering a location for someone like a small family to place a storage container or tiny house. I have a well, creek, and a nearby spring. You would need to provide all your own preparations, although I am looking for help to plant a large garden, fixing fence, taking care of milking goats, and chickens.”
“We would make some kind of two year lease written/notarized between us for $10k. I have a 500 gallon propane tank that could be used by whoever takes me up on this. I am wanting to replace it with a thousand gallon. I need to do a little wiring to get my generator hooked into the well. I’m also planning a miniature water tower /storage. I have three small children and my wife is expecting in June. Our home was built in 96’. It has a large shop and outbuildings with 20 acres, possibly for sale. We have million-dollar views here and wildlife with Bull Shoals lake nearby. Getting prepared to lock down and go nowhere. Missouri is Constitutional carry and Firearms friendly. We also have horses/animals. Pretty much beautiful weather year round with four seasons. 417-388-9595. https://springfield.craigslist.org/bar/d/isabella-pandemic-bug-out-location/7086392357.html”’
We did it. https://twitter.com/NorthmanTrader/status/1238235391288725504
Edit: Holy smokes out of nowhere bitcoin gaps lower twice, again. Went from -30% to -32% in seconds.
Meanwhile futures have gone deeply red again, -1%ish.
It gapped lower to -33,85% while typing all of that! -35% on tabbing my browser HOLY SHIT
It broke through $5500 AND $5000 WITHIN A MINUTE! it’s now sub $5k!
https://twitter.com/DesoGames/status/1238249342131228672
Just posting that for convenience so i don’t have to type it again
There’s so much statistical gold (as well as schadenfreude) in that picture.
After staring at it for a while though. One thing stands out more then anything else.
Tether’s 24 hour volume is HUGE! It’s 74 billion vs a 5 billion market cap!
It’s damn near 40% bigger then Bitcoins 24 hour volume after a MASSIVE selloff!
What in the world is happening to tether!
EDIT: So i was looking at Tether because i wanted to see volume but then this happens. What in the actual hell!
It’s a stable coin with a value pegged to the USD, 1 to 1. This shouldn’t be possible. Just look at the 2nd zoomed out chart what kind of a MASSIVE move that is!
Ye no Tether’s broken. It’s increased in volume in the last 24h by $150 million (going from $73,79B to $75,29B) in 30 minutes. It’s not gone down to it’s 1:1 peg to the USD. Even at 1,015 it means the company who owns Tether needs to post $90 million more collateral to guarantee each Tethercoin is backed by a US dollar.
And the problem is getting worse by the minute. I have no clue why it’s doing this, but it’s fascinating.
EDITx3: I’m sorry to spam even more but this is getting weirder and weirder by the minute!
Look at the market cap VS circulating supply! At first it was moving in lockstep with the valuation, as well it should, but now it’s not!
Volume increased with another $50 million, but, at 1.02 price with a 4,64 billion supply in circulation, that implies a $4,73B market cap! The hell did that remaining $70 mil in market cap go off to?! What in good gods name is happening to the crypto space?
EDITx4: i refreshed, market cap jumped to $4,7B, but volume jumped… TO $76,09 BILLION! It jumped $75 million. The average volume weighted over 24 hours JUMPED UP $75 million. This is absolutely insane!
From Daisy Luther, at The Organic Prepper. When are US cities likely to go into lockdown?
We we can’t know for sure (damn crystal ball got cloudy) but most western nations are on the same curve as Italy, but about 12 days behind.
"On about the 20th of February, three cases of Covid-19 were confirmed in Northern Italy. Officials acted quickly to lock the area down but unfortunately, their quick actions weren’t enough. What began as a lockdown of a few villages in the Lombardy region in northern Italy on the 21st spread to a nationwide lockdown on March 9th.
From the first patients to local lockdowns was one day. From the first patients to the entire country being quarantined was 22 days. In just 22 days, the virus had spread to such a degree that an entire country has suspended mortgage payments, stopped all non-essential movement, and ceased business.....
Italy is currently on day 25 since the first 3 cases were diagnosed. If it took China at least 50 days of quarantine, then Italy is potentially halfway through the worst of this outbreak.
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If massive lockdowns are occurring on about day 22-23 in other countries, that means we may have 7-8 days before we see major lockdowns and quarantines here in the USA-- about March 19th or 20th. .... [E]arly lockdowns [would be expected to start in] cities or regions where the virus is most rapidly spreading like Seattle and New York City.
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And if a lockdown is lifted too early, there is still enough active virus in the community and a SECOND WAVE of contagion begins hitting the people coming out of quarantine too early.
This is probably happening to others, then will be announced after the fact by fund managers. I’m sorry you got caught in the shrinking exit door even after taking prudent steps to prevent that from happening.
Pandemic Bug Out Location. I live in a very secluded area about 20 minutes from Theodosia, Missouri and the Mark Twain National Forest. There is a small plane landing field about a mile away from my home. I am offering a location for someone like a small family to place a storage container or tiny house. I have a well, creek, and a nearby spring. You would need to provide all your own preparations, although I am looking for help to plant a large garden, fixing fence, taking care of milking goats, and chickens.”
