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Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us September 18, 2017

Will there be a major stock market crash before the end of 2017?  To many of us, it seems like we have been waiting for this ridiculous stock market bubble to burst for a very long time.  The experts have been warning us over and over again that stocks cannot keep going up like this indefinitely, and yet this market has seemed absolutely determined to defy the laws of economics.  But most people don’t remember that we went through a similar thing before the financial crisis of 2008 as well.  I recently spoke to an investor that shorted the market three years ahead of that crash.  In the end his long-term analysis was right on the money, but his timing was just a bit off, and the same thing will be true with many of the experts this time around.

On Monday, I was quite stunned to learn what Brad McMillan had just said about the market.  He is considered to be one of the brightest minds in the financial world, and he told CNBC that stocks would need to fall “somewhere between 30 and 40 percent just to get to fair value”…

Brad McMillan — who counsels independent financial advisors representing $114 billion in assets under management — told CNBC on Monday that the stock market is way overvalued.

The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,” said McMillan, chief investment officer at Massachusetts-based Commonwealth Financial Network.

McMillan’s analysis is very similar to mine.  For a long time I have been warning that valuations would need to decline by at least 40 or 50 percent just to get back to the long-term averages.

And stock valuations always return to the long-term averages eventually.  Only this time the bubble has been artificially inflated so greatly that a return to the long-term averages will be absolutely catastrophic for our system.

Meanwhile, trouble signs for the real economy continue to erupt.  As noted in the headline, it appears that Toys R Us is on the brink of bankruptcy

Toys R Us has hired restructuring lawyers at Kirkland & Ellis to help address looming $400 million in debt due in 2018, CNBC had previously reported, noting that bankruptcy was one potential outcome.

Kirkland declined to comment.

Earlier Monday, Reorg Research, a news service focused on bankruptcy and distressed debt, reported Toys R Us could file for bankruptcy as soon as Monday.

This is yet another sign that 2017 is going to be the worst year for retail store closings in U.S. history.  I don’t know how anyone can look at what is happening to the retail industry (or the auto industry for that matter) and argue that the U.S. economy is in good shape.

But most Americans seem to base their opinions on how the economy is doing by how well the stock market is performing, and thanks to relentless central bank intervention, stock prices have just kept going up and up and up.

In so many ways, what we are watching today is a replay of the dotcom bubble of the late 1990s, and this is something that McMillan also commented on during his discussion with CNBC…

Part of McMillan’s thesis is rooted in his belief that the lofty levels of the so-called FANG stocks — Facebook, Amazon, Netflix and Google-parent Alphabet — seem reminiscent of the dot-com bubble in the late 1990s.

“I’ve been saying for about the past year, this year looks a lot like 1999 to me,” McMillan said on “Squawk Box.” “If you look at the underlying economics [and] if look at the stock market, the similarities are remarkable.”

I am amazed that so many big names continue to issue extremely ominous warnings about the financial markets, and yet most Americans seem completely unconcerned.

It is almost as if 2008 never happened.  None of our long-term problems were fixed after that crisis, and the current bubble that we are facing is far larger than the bubble that burst back then.

I don’t know why more people can’t see these things.  It has gotten to a point where “even Goldman Sachs is getting worried”

The stock market bubble is now so massive that even Goldman Sachs is getting worried.

Let’s be clear here: Wall Street does best and makes the most money when stocks are roaring higher. So in order for a major Wall Street firm like Goldman to start openly worrying about whether or not the markets are going to crash, there has to be truly MASSIVE trouble brewing.

On that note, Goldman’s Bear Market indicator just hit levels that triggered JUST BEFORE THE LAST TWO MARKET CRASHES.

When things fall apart this time, it is going to be even worse than what we went through in 2008.  In the aftermath, we are going to need people that understand that we need to fundamentally redesign how our system works, and that is something that I hope to help with.  We cannot base our financial system on a pyramid of debt, and we cannot allow Wall Street to operate like a giant casino.  Our entire economy has essentially become a colossal Ponzi scheme, and it is inevitable that it is going to come horribly crashing down at some point.

But for now, the blind continue to lead the blind, and most Americans are not going to wake up until we have gone over the edge.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

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The Dow Falls 274 Points As ‘Eclipse Fever’ Hits The Financial Markets August 17, 2017

Have we now entered a time of major financial shaking?  On Thursday, the Dow Jones Industrial Average was down 274 points.  The was the largest decline for the Dow since May, and high yield bonds were down dramatically as well.  Many are blaming the terror attack in Barcelona and “instability in the White House” for the downturn, but could “eclipse fever” also be a factor?  The closer that we get to the solar eclipse on August 21st, the weirder people seem to be getting.  You will see what I am talking about below.

But first let’s talk about the financial markets.  I have been warning that stocks are massively overvalued for quite a while now, and it turns out that the Federal Reserve very much agrees with me

“Since the April assessment, vulnerabilities associated with asset valuation pressures had edged up from notable to elevated, as asset prices remained high or climbed further, risk spreads narrowed, and expected and actual volatility remained muted in a range of financial markets.”

Even the Fed is warning that we are in a bubble, and it is just a matter of time until that bubble bursts.

And anyone that is paying attention should be able to see the red flags all around us.  In fact, we have just witnessed the most “Hindenburg Omens” that we have seen since November 2007.  The technical indicators are absolutely screaming that a major downturn is dead ahead, and John P. Hussman is encouraging everyone to be cautious and to “consider watching from a safe location”…

Given obscene valuations, lopsided bullishness, and (importantly) clearly deteriorating internals, consider watching from a safe location.

We shall see what happens, but I tend to very much agree with Hussman.

Meanwhile, the closer that we get to August 21st, the crazier people seem to be getting.  The following comes from USA Today

As citizen scientists collectively nerd-out ahead of Monday’s total solar eclipse, rogue observers of the spooky and weird are generating theories that the celestial event could usher in aliens, boost sightings of “interdimensional” creatures and perhaps even plunge us toward world destruction.

None of those things are going to happen, but there are some very odd things about this eclipse that are definitely worth noting.

In a previous article, I noted that the first major city in the United States that the eclipse will cross is named Salem.  Well, it turns out that the eclipse will actually cross a total of seven cities named Salem, and of course “Salem” is short for “Jerusalem”.

I also find it very interesting how much the number “33” is associated with this eclipse.  The following are just a few examples

This solar eclipse is highly unusual for so many reasons and it occurs just 33 days before what may very well be the Great Sign.  It begins in the 33rd state, ends at the 33rd parallel, and occurs on the 233rd day of the year, which is 33 weeks and 2 days into 2017.  The eclipse will take 1 hour and 33 minutes to cross the country and occurs 133 days (inclusive) before the end of 2017.

And of course this solar eclipse begins a period of 40 days which will end with Yom Kippur on September 30th.  The following is an excerpt from a Charisma News article authored by Ron Allen which I think has some really good insights…

Teshuvah, the 40-day Jewish season of repentance, literally means to return to the presence of God, and is a time of introspection and a reminder of judgment. It begins on the first day of the sixth month known an Elul, and the solar eclipses that occur on Teshuvah add to the meaning of Teshuvah. The Teshuvah eclipses are signs of coming judgment, like the Trumpets eclipses, but they are also signs of unity in the presence of God. Thus, the Teshuvah eclipses are both an invitation to return to God and a warning of judgment.

During the totality of the eclipse, the sky will become dark and the stars will become visible. Right next to the eclipse, only 1.5 degrees away, the brightest star in the judgment constellation Leo (the lion), Regulus (treading under foot) reminds us that Christ, the lion of Judah, will put His enemies under His feet (1 Cor. 15:25). Southeast of the eclipse, the planet Mercury, the morning star laid low symbolic of Satan, will appear under the feet of Leo, adding to the warning of judgment.

So is this solar eclipse actually a warning that America should repent?

Many Christian leaders all over the nation believe that this is the case.  In fact, Billy Graham’s own daughter, Anne Graham Lotz, is one of them

In light of Ezekiel 33:1-6 that commands a watchman to be faithful to warn others of the danger coming against the land, I feel compelled to issue the warning once again. The warning is triggered by the total solar eclipse of Aug. 21, 2017, nicknamed “America’s Eclipse.” For the first time in almost 100 years, a total solar eclipse will be seen from coast to coast in our nation. People are preparing to mark this significant event with viewing parties at exclusive prime sites. The celebratory nature regarding the eclipse brings to my mind the Babylonian King Belshazzar, who threw a drunken feast the night the Medes and Persians crept under the city gate. While Belshazzar and his friends partied, they were oblivious to the impending danger. Belshazzar wound up dead the next day, and the Babylonian empire was destroyed.

I do not know what will happen before, during or after the eclipse, but I do know that America is in very deep trouble.

If we continue on the path that we are currently on, there is no future for our nation.

Unfortunately, most Americans aren’t listening to the warnings.  Most people simply assume that America is far too powerful to ever fall, and they see absolutely no reason why we need to change our ways.

Hopefully we can get America to wake up, because time is rapidly running out.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

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The Dow Closes At A Record High For The 9th Straight Time But Experts Warn That A Stock Market Crash Could Be Imminent August 7, 2017

The bigger they come, the harder they fall.  On Monday, the Dow Jones Industrial Average closed at a record high for the ninth straight session.  It has been a remarkable run, but many experts are pointing out that big trouble is brewing under the surface.  As you will see below, 79 components of the S&P 500 have already dropped more than 20 percent below their 52-week highs, and it is mostly just a handful of high flying tech stocks that are still propping up the market at this point.  Over the past several weeks, I have been documenting so many of the prominent voices that are loudly warning about an imminent stock market crash, and in this article you will hear some more of these warnings.  There is no way that stock prices can keep going up like this, and when the inevitable correction does arrive it is going to be exceedingly painful for millions of investors.

When the market is about to turn in a major way, one of the key things to watch is market breadth, and according to Brad Lamensdorf market breadth has now turned “exceedingly negative”

Market breadth, a measure of how many stocks are rising versus the number that are dropping, has turned “exceedingly negative,” according to Brad Lamensdorf, a portfolio manager at Ranger Alternative Management. Lamensdorf writes the Lamensdorf Market Timing Report newsletter and runs the AdvisorShares Ranger Equity Bear ETF HDGE, -0.70% an exchange-traded fund that “shorts” stocks, or bets that they will fall.

“As the indexes continue to produce a series of higher highs, subsurface conditions are painting an entirely different picture,” Lamensdorf wrote in the latest edition of the newsletter.

When Lamensdorf uses the phrase “exceedingly negative”, he is not exaggerating at all.  As I mentioned above, 79 components of the S&P 500 are already in a bear market

According to an analysis of FactSet data, 79 components of the S&P 500 are trading at least 20% below their 52-week high; a bear market is typically defined as a 20% drop from a peak.

Another key measure that I like to keep my eye on is Robert Shiller’s cyclically adjusted price-to-earnings ratio.  At this point, it is roughly at the same level as it was just before the stock market crash of 1929, and the only time it has been higher was during the peak of the dotcom bubble.

This is why so many investors are making extremely large bets that a major correction is imminent.  History tells us that stocks are likely to only go down from here.  And when stocks do start falling, the price action could become quite violent.  In fact, Barry James is comparing this current market to the Yellowstone supervolcano

Warning: A correction in the market is “inevitable” and there are three key factors that could spark chaos on Wall Street, according to James Advantage Fund president Barry James.

The investor likened the market to Yellowstone National Park’s famous supervolcano, which many believe is close to eruption.

Of course not everyone agrees with James.  Michael Wilson of Morgan Stanley insists that everything is just fine and that “there continues to be a level of skepticism that seems out of whack with what is actually happening”.

In the end, we will see how the coming months play out.

Over the past several years, there have been two primary trends that have been relentlessly driving up stock prices.  One of these trends has been an unprecedented level of stock buybacks.  And so far this year, hundreds of billions of dollars worth of stock buybacks have already been announced

Through May, some $390 billion in buybacks have been announced this year, $13 billion more than at this time in 2016, according to figures compiled by Jeffrey Yale Rubin at Birinyi Associates, a stock market research firm.

June 28 was the biggest single buyback announcement day in history. That was when 26 banks disclosed buybacks worth $92.8 billion, largely a response to having just passed the stress tests administered by the Federal Reserve Board. That figure blew past the previous record of $56.4 billion announced on July 20, 2006.

Secondly, central banks have been pumping trillions upon trillions of dollars into the global financial system, and this has perhaps been the biggest reason for the surge in stock prices.  But now central banks are starting to pull back, and that could mean big trouble very soon.  The following comes from Matt King

With asset prices displaying a high degree of correlation with central bank liquidity additions in recent years, that feedback loop makes the economy, upon which both corporate profitability and bank net interest margins depend, more reliant on central banks holding markets together than almost ever before. That delicate balance may well be sustained for the time being. But with central banks beginning to move, however gingerly, towards an exit, is it really worth chasing the last few bp of spread from here?

Throughout our history we have seen financial bubbles come and go, but we never seen to learn from our mistakes.  Right now, Warren Buffett is sitting on nearly 100 billion dollars in cash in anticipation of being able to buy up financial assets for a song after a crash happens, but meanwhile multitudes of ordinary Americans continue to pour vast quantities of money into stocks even at such absurd valuations.

Despite all of the warnings, many will be caught unprepared when the music stops playing.  Just like all of the other financial manias in our history, this one will come to a bitter end too.  The following comes from the New York Times

In the late 1960s the mania was for the “nifty 50” American companies like Disney and McDonald’s, which had been the “go-go” stocks of that decade. In the late 1970s it was for natural resources, from gold to oil. In the late 1980s it was stocks in Japan, and in the late 1990s it was the dot-com boom. Last decade, investors flocked to mortgage-backed securities and big emerging markets from Brazil to Russia. In every case, many partygoers were still in the market when the crash came.

In life, timing is everything, and those that got out of the market in time are going to end up being very happy that they did so.

But those that stay in too long are going to see their “paper wealth” disappear in a blinding flash, and there won’t be any way to get it back once it is gone.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

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