Controlled Demolition: Heightened Financial Market Risks and the Planned Impending Recession

The second longest bull market in stocks was brutally interrupted in early February 2018 with some serious volatility, including the largest single day point drop in the history of the Dow Jones Industrial Average.  I mean, why would something like that happen if the economy is otherwise doing so well, investors are so clearly exuberant, unemployment is so very, very low, and the Fed, Treasury and President Trump are guiding things along so firmly?  Tongue firmly in cheek…

When actual economic fundamentals are weighed with some data sobriety, this recent volatility could be seen as a warning of further corrections and a deep recession to come.  Yet that said, such a wider downturn isn’t necessarily due to ‘natural market forces’, just like the disingenuously long 9-year-old bull market in equities hasn’t been due purely to theoretical supply and demand, either.  So, what all is going on behind the ticker tape?  What are the true stakes, real numbers at play, and possible ends for which another large systematic financial crisis could serve as means to?

In this episode of Money & Fear, and in the show’s Show Notes, we’ll look at the interplay between the bond and stock markets, probe possible financial shenanigans meant to speed a wider correction along, and bring some monetary history into it all, as always.  Details not shared, let alone analyzed, by mainstream corporate business press and its sponsors, all of whom prefer that you not think critically about economics or finance, but rather just listen to prescribed numbers, guidance and “sound advice” otherwise.

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Show Notes

Goldman Warns Bond Yields Are Now "A Threat To Risky Assets”

How Far Can Bond Yields Rise Before Hurting Equities? Goldman Answers

Reagan Offers Economic Recovery Program

Stocks: 'September slump' strikes again

Stock market scare as Dow drops 460 points

What's the Real Unemployment Rate in the U.S.?

Here's the real unemployment rate

How Wall Street’s ‘fear gauge’ is being rigged, according to one whistleblower

Opinion: How S&P 500 options may be used to manipulate VIX ‘fear gauge’

Danielle DiMartino Booth: Don't Count On The Powell Fed To Rescue The Markets

Ray Dalio: Everything Changed In The Last 10 Days

Days After XIV Blowup, Goldman And Citi Plan ETF Linked to Europe's Riskiest Debt

Dalio Says ‘We’re Past the Top’ in Bonds, Sees Rising Risks of a U.S. Recession

Trump's economic policy is rooted in debt

The risks of an economic 'hard landing' are rising in the US

Its bounce may have been speedy, but the stock market is still at risk

Dow plunges 666 points in biggest drop since Great Recession

DC ‘Plunge’ team may have halted unprecedented Dow Jones spiral

Washington may have had a hand in keeping Dow meltdown from being a complete disaster

The market hasn’t been this crazy since the Great Recession

How Long Can The Fed Keep The Stock Market Propped Up?

Stock Volatility is Computer Generated

Former ‘Plunge Protection Team’ Member Backs Cryptocurrencies

Congress is spending as if we’re in a recession instead of saving up to fight the next one

The Next Recession Is Really Gonna Suck - The extra help unemployed people got during the Great Recession has emboldened states to mistreat them.

Does a Flattening Yield Curve Mean Recession?

The Fed Plays the Economy Like an Accordion

Stocks Suffer As 10Y Yields Reach 2014 Highs, Curve At Inflection Point

How Long Before The Bond Selloff Slams Stocks? Wall Street Answers

This may be the beginning of the Great Financial Reckoning

US Launching Crisis Level Spending

Markets 'Not' In Turmoil: Dow Jumps Over 400 Points Amid Record Low Liquidity

Harvard, Hawaii Gambled on Market Calm—Then Everything Changed

HNA Cuts Stake In Deutsche Bank Amid Liquidation Panic

Deutsche Bank Tumbles To 2016 Lows Amid Reports Of HNA Technical Default

Central Banks Will Let The Next Crash Happen

Books & White Papers:

End This Depression Now!

Manipulation in the VIX?

*For additional footnotes and links refer to the Newsbud article link above

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Comments

  1. April Sanchez says:

    Thank you, Pye, for taking a logical look at the madness and giving an honest analysis…

  2. CuChulainn says:

    exuberance theater indeed! who knew Newsbud would become a top flight economic analysis resource?
    thanks for another excellent & well documented report!!

  3. Andreas Hedqvist says:

    Good report, many thanks.
    One scenario that is not being reported on is the fact that algo trades were beginning to game the XIV trade used to manipulate the VIX. The VIX obviously is a key metric for tweaking the US markets to give the illusion of ‘all green’ we’ve all become accustomed to hearing. For anyone who cares to look it is clear that the charade is nearing the end game soon and we might be looking at a serious depression. The world is and continues to abandon US treasuries and the ESF is probably working in overdrive to patch all auctions. The question is how long this can continue. When the 10Y reaches 3.2 I think we might see further intervention but it will most likely not be called QE but something else. To add to the evidence of how dire the situation really is is the obvious attempts at intervening in the crypto markets, clear coordinated dump sales are occurring in all the major cryptos at precisely the ‘right’ times to give the most downward bang for the buck. This means that the CBOE and CME markets really did not work as expected to manipulate the price of Bitcoin. It will be a miracle if all these games can continue beyond the summer.

  4. spiro skouras says:

    Great report Pye,
    I think we all know that the party cannot last forever, in my non expert opinion, the same ones who are and have been manipulating / rigging virtually everything, will no doubt initiate or trigger the economic meltdown in an attempt to control or manage it, in a way that will ultimately benefit them while transitioning into the next phase of our economic enslavement. So who or what will be the ‘patsy’ where all the blame will be placed? Cyber attack? Trump? Iran? Russia? At this point, the moves being made on the Eurasian front, are the biggest threat to US hegemonic status including on the financial and economic front. But there is no way the US will sit idly by and surrender… buckle up! Truly an amazing time to be alive.
    Spiro

  5. Andrew Taylor says:

    Interesting points concerning the actual rates of unemployment and stimulus spending. It seems likely that most of easy stock market gains due to the tax cut have taken place. Going forward, from the stock market’s standpoint, then 1) labor is still flat on its back (a good thing), but 2) deficit spend of this magnitude will raise interest rates (a bad thing). On the other hand, all of that deficit spending will have to go somewhere.

  6. Edward Rutland says:

    Thank you Pye
    You guys have far exceeded my meager expectations for this project
    Thank you
    Sibel

  7. Rich Winkel says:

    I know this isn’t supposed to be a science fiction show but I don’t think I’ve ever seen a more terrifying video. What it implies about elite planning for the peasants is what is terrifying. How they get hundreds of academics and media pundits on board with this agenda would be mystifying absent persistent whistle blowing about organized pedophilia blackmail networks and satanic influences in high finance.
    If anyone wants to research what I’m talking about here, check this out:
    http://thoughtcrimeradio.net/2014/12/franklin-coverup-the-white-house-call-boy-ring/
    Or keep your eyes tightly shut, as appropriate.
    I’m not an economist, but it seems to me we have a very clear choice between monetary reform per http://monetary.org , or nuclear world war.

    • Andreas Hedqvist says:

      There is another way but it requires that enough ‘sane’ people get onboard. With the new cryptocurrency technology there is a way for new startups to create new types of companies and organisations that may weather the financial storms that are brewing. Once individual skills can reach these new crypto entities/formations they will have a possibility to sidestep the established financial stranglehold but it needs to be gradual and broad. A lone mechanic/carpenter/farmer/plumber/doctor/accountant may not have any option today outside the current system but if this technology can allow new networks to be established with expertise and knowledge to be sold and/or traded this may allow a gradual new economy to form which is not based on the old paradigm. Sure it sounds utopian and unlikely but it beats throwing in the towel and just wait for the bus to the camp.

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