Gross & Gundlach Warn – No One Pays Attention
Make no mistake. It is just a matter of time before the FED goes interest rate negative. But as Bill Gross kindly points out Negative Rates Are Finance Economy’s Last, Dying Gasp
Instead of historically generating economic growth via a wealth effect and its trickle-down effect on the real economy, negative investment rates and the expansion of central bank balance sheets via quantitative easing are creating negative effects,” he wrote. Negative rates threaten bank profits as well as any business models that depend upon 7-8% annual returns on assets. He’s talking mainly about insurance companies and pension funds, a topic he’s hit on a number of times. “And the damage extends to all savers; households worldwide that saved/invested money for college, retirement or for medical bills. They have been damaged, and only now are becoming aware of it.”
Negative rates are “an enigma to almost all global investors,” he says, that undermine the basic architecture of the financial markets. “But central bankers seem ever intent on going lower, ignorant in my view of the harm being done to a classical economic model that has driven prosperity – until it reached a negative interest rate dead end and could drive no more.”
I couldn’t agree more. Listen, I am not sure how far the FED is willing to go, but only desperate measures remain in their bag of tricks. And even if they do go negative, I am afraid the markets will re-adjust long before that becomes a reality.
Hedge fund manager Jeff Gundlach sees the exact same thing. Here is what he had to say in his latest webcast.
- The Federal Reserve has no business raising rates right now. Markets aren’t pricing in a hike this month in, and no one has forgotten the volatility that ensued after the first hike in December.
- The rally in risk assets is near its end. Stocks have 2% of upside but 20% of downside. And there’s still time to wait for commodities to cheapen more before buying.
- There isn’t a strong case for an imminent US recession.
- Negative interest rates are bad for the world. They are having the opposite effect on currencies like the Japanese yen, which has rallied instead. They are also hurting European banks.
And that’s probably the biggest take away here. People are trying to time the bottom here without realizing that they are working in a 2/20% environment. By the way, Carl Icahn has expressed the same point of view a few months ago. Sometimes it is better to get out the way, than to lose 20-50% of your capital.
Investment Grin Of The Day
Investment Grin Of The Day
Investment Inspiration Of The Day
Demeter Capital Weekly Report & COT
As you already know, Matt Demeter’s (Demeter Capital) weekly coverage concentrates on some of the most popular worldwide indices, futures, bonds, stocks, commodities and currencies. Matt’s work is some of the most accurate I have ever seen and it shows. The table below represents just a small portion of work available from Demeter Research. To learn more and to see Matt’s work in action, please Click Here.
Report Date: February 21st, 2016 (Including COT Reports).
For up to the minute long-term and short-term analysis on all of the markets below, please Click Here. 
Further Credit Injection Is Nearly Impossible – The Jig Is Up
2/23/2015 – A down day with the Dow Jones down 189 points (-1.14%) and the Nasdaq down 67 points (-1.47%).
Most big bank analysts, CEOs and government officials laugh at any notion that we are at a risk of recession. For instance…….
At the same time, I can argue that we are already in a full blown recession. Covered up by remaining liquidity sloshing thought our financial system. But I will let David Stockman tell you what the real picture is. I agree with his view and analysis 100%. It is definitely worth 5 minutes of your time.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. February 23rd, 2016 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
Further Credit Injection Is Impossible – The Jig Is Up Google
Demeter Capital Weekly Report & COT
As you already know, Matt Demeter’s (Demeter Capital) weekly coverage concentrates on some of the most popular worldwide indices, futures, bonds, stocks, commodities and currencies. Matt’s work is some of the most accurate I have ever seen and it shows. The table below represents just a small portion of work available from Demeter Research. To learn more and to see Matt’s work in action, please Click Here.
Report Date: February 14th, 2016 (Including COT Reports).
For up to the minute long-term and short-term analysis on all of the markets below, please Click Here.
Investment Grin Of The Day
How Meditation Can Improve Your Investment Returns
Had a long conversation with a friend about investing and meditation. Now would be a great time to re-post this.
A great article on the subject matter from Bloomberg and I highly recommend that everyone reads it. To Make a Killing on Wall Street, Start Meditating.
I have been seriously meditating for over 7 years now and I swear by it. Most people don’t have the slightest idea of how stressful it is to be involved in the money management/trading business. In fact, I continue to maintain that it is one of the most challenging professions out there. And while some people turn to drugs, alcohol, partying, hookers, gambling and other destructive/compulsive behaviors, for me meditation is the only healthy (and free) option.
Listen, most people will gain a competitive advantage on Wall Street NOT through superior knowledge…..you can teach a monkey to read a balance sheet or a chart…..but through their psychological make up and patience. In other words, your brain can either be your best friend or your worst enemy. Simply put, meditation, over time, turns your brain/being into a powerful weapon when it comes to trading and/or investing.
Plus, there is a number of additional benefits. Wisdom and a potential enlightenment immediately come to mind. As a quick note, don’t follow anyone or get a “Guru”. Just close your eyes and destroy your mind. It’s the best drug out there. I highly recommend it.
