credit crisis

The Flight Back Down to Reality Ahead for the Rich

By Friday, September 26, 2014
Stock Market Bubble Starting to Show Signs of StressSix years ago this month, in the midst of the Great Recession, Lehman Brothers, one of the most well-known investment banks in the U.S. economy, filed for bankruptcy. At the time, Lehman’s bankruptcy sparked widespread worries…and the U.S. financial system teetered on the verge of collapse. For those of us who remember that time, there was too much uncertainty. So, the Federal Reserve and the government stepped in to help .

Two Reasons Why Interest Rates Will Rise

By Monday, August 18, 2014
U.S. Dollar Under BRICS PressureThe U.S. dollar is still regarded as the reserve currency of the world. The majority of international transactions are settled in U.S. dollars and most central banks around the word hold it in their foreign exchange reserves. But since the Credit Crisis of 2008, and the multi-trillion-dollar printing program by the Federal Reserve, the supremacy of the U.S. dollar as the “world’s currency” has been challenged. The BRICS countries (Brazil, .

Alan’s Words of Wisdom for Stocks (He Was Right Last Time)

By Friday, August 8, 2014
History Repeating Itself with This Stock MarketRemember Alan Greenspan? He was the chairman of the Federal Reserve from 1987 to 2006. Several media sources, including this one, blamed the sub-prime mortgage fiasco that led to the Credit Crisis of 2008 on the easy money policies under the leadership of Greenspan. But the Credit Crisis aside, it is ironic but true that Greenspan has had a knack for calling stock market bubbles correctly. For example, in December .

The Era of Financial Insanity

By Wednesday, July 30, 2014
What Happens Next for the Stock MarketMy colleague Robert Appel (BA, BBL, LLB) issued a research paper to the subscribers of one of his financial advisories earlier this week. I thought it important that all my readers be aware of and understand the crux of what Robert is saying about our current economic situation and where it will eventually lead. Here it is: “The actions of the Federal Reserve (how far they went to ‘stabilize’ the .

Negative Interest Rates: They’re Here

By Friday, June 6, 2014
What Happens When You Toy with Nature's Boom & Bust CyclesIn 2012, I predicted that if the Federal Reserve couldn’t get the economy growing again, it would take interest rates into the negative zone. Well, yesterday, the European Central Bank (ECB), the second-biggest central bank in the world, trumped the Fed and became the first major central bank to offer depositors negative interest rates. What does “negative interest rates” mean? Each night, major banks in the eurozone collectively deposit USD$1.0 .

Double Bottom in for Gold Prices?

By Tuesday, May 20, 2014
Gold Bullion Fear Index CollapsesWhile the Federal Reserve has cut back on its money printing program, the fact of the matter is that the “official” U.S. national debt is closing in on $18.0 trillion. The unofficial national debt (when obligations like Social Security, Medicare, Medicaid, welfare, and now Obamacare are taken into consideration) is closer to $200 trillion. The Japanese national debt just hit one quadrillion yuan. Many countries in the eurozone are drowning .

What the Collapse in Homebuilder Stocks Forewarns

By Tuesday, April 29, 2014
Proof U.S. Housing Market Losing MomentumThe housing market that lured institutional investors in during 2012 and 2013 is showing signs of cracking. Before I go into more detail, you have to keep in mind that affordability is the key to the housing market and affordability for housing only increases once home buyers’ wages increase. Right now, incomes in the U.S. economy are declining. And you can add to the problem the fact that mortgage rates .

Movie Tickets and New Homes: Why They Are Both in Trouble

By Thursday, April 10, 2014
The Untold Story of the Pinned-Down U.S. ConsumerIn 2013, consumer spending accounted for 67% of U.S. gross domestic product. (Source: Federal Reserve Bank of St. Louis web site, last accessed April 2, 2014.) It’s plain and simple: economic growth cannot be achieved unless consumers are spending. And unfortunately, higher prices and lower discretionary spending are putting the brakes on consumer spending here in 2014. The Motion Picture Association of America says box office sales in the U.S. .

Why the Fed Will Have to Get Back into the Paper Money Printing Business Soon

By Friday, April 4, 2014
U.S. Economic GrowthIn the early days of the 2008 financial crisis, the Federal Reserve said, “Job losses, declining equity and housing wealth and tight credit conditions have weighed on consumer sentiment and spending. Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment.” (Source: Federal Reserve, March 18, 2008.) As a result of this, the central bank came up with the idea of .

What a Loan Officer Would Say to the U.S. Government

By Monday, March 31, 2014
Does the Size of Our National Debt Really Matter AnymoreFor a moment, consider yourself a loan officer at a major bank. Would you approve a loan for a customer who says they earn $1,000 a month, spend $1,300 a month, and don’t have a job? They also tell you they have unpaid debts of $17,000. I don’t think anyone would authorize that kind of loan because the chances of getting the money back are next to zero. The individual .
Sep. 2, 2015
Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter) $1014.15
Trailing 12-month Price/earnings multiple (Most Recent Quarter)

17.44

Dow Jones Industrial Average Dividend Yield 2.71%
10-year U.S. Treasury Yield 2.14%

Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.

Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.

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From: Michael Lombardi, MBA
Subject: 200% Profit on the Ultimate "Fear Gauge" Play

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