2/1/2019 – A positive week with the Dow Jones up 326 points (+1.31%) and the Nasdaq up 99 points (+1.38%)
As we have been saying, the stock market remains at an incredibly important juncture. Things are about to accelerate in an unexpected way. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here.
Let’s start with a terrifying chart and a simple questions, who the hell is buying the gigantic flood of new US Government Debt? After all, Japan, China and other foreign entities are dumping big time.
Who Bought the Gigantic $1.5 Trillion of New US Government Debt Issued over the Past 12 Months?
And who holds the Rest? The only entities left:
American banks (very large holders), hedge funds, pension funds, mutual funds, and other institutions along with individual investors in their brokerage accounts or at their accounts with the US Treasury were huge net buyers, while nearly everyone else was selling, increasing their holdings by $1.36 trillion over the 12-month period. These American entities combined owned the remainder of the US gross national debt, $7.5 trillion, or 34.4% of the total!
When that appetite among American banks and other big institutions for US Treasury debt wanes, yields will rise because buyers will have to be lured into this market to absorb this flood of new securities on a weekly basis. But so far, so good – with the enormous appetite among American entities pushing down the 10-year Treasury yield today to 2.63%.
AKA……Keeping the Ponzi alive. But wait, there’s more……
Individual investors were on a shopping spree for stock-market bargains in January: E-Trade
Individual investors grew cautiously optimistic in January, with E-Trade clients aggressively buying stocks of companies they saw as having become oversold in December, Chris Larkin senior vice president of trading at E-Trade, told MarketWatch.
“Clients were net buyers [in January], but it wasn’t the strongest month of buying we’ve seen,” he said. “Traders are thinking defensively in the marketplace, but were also looking for bargains after December’s selloff.”
GOD bless their brave little souls. In the meantime……
These billionaires are issuing terrifying warnings about global debt levels
Seth Klarman runs the $28 billion hedge fund, Baupost Group. The guy is famously secretive (and conservative). So the fact that he went out of his way to make this public statement means you should pay attention.
Also, Klarman’s fund is closed (he’s actually been returning money), so he’s not doing this to scare people into investing in his fund.
In a 22-page letter to his investors, Klarman warned that government debt levels, particularly in the US (where debt exceeds GDP), could lead to the next global financial crisis.
That is to say, the conundrum remains. While most investors continue to drink the kool-aid from Trump’s punch bowl of the “Best Economy Of All Time”, quite a few brilliant investors are ringing the proverbial bell.
Luckily, you don’t have to guess what the stock market will do next. If you would like to find out what the stock market will do next, in both price and time, based on our mathematical and timing work, please Click Here
Please Note: Our latest call was a direct hit. While everyone was panicking our work projected an important bottom on December 27th (+/- 1 trading day) on the Dow at 21,725 (+/- 50 points). An actual bottom was put in place on December 26th at 21,713.
