12/16/2014 – Another down day with the Dow Jones down 112 points (-0.65%) and the Nasdaq down 57 points (-1.24%)
Since about the start of this year I have maintained that when a bear market of 2014-2017 kicks in, a number of things will happen. Junk bonds will blow sky high, 10-Year Note will test 1.5% (double bottom) and the stock market will drift lower. Driving both bulls and bears up the wall in the process.
Joshua Birnbaum, the Ex-Goldman trader who correctly shorted subprime mortgages during the financial crisis tends to agree.
Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents
I believe he is absolute right in his assessment. The situation is not that dissimilar from 2007-2009 period. Except, instead of “subprime” bubble we are currently going though a stock market overvaluation and junk debt bubble. There is just way too much risk in our financial system to warrant today’s valuation levels. Once the tide goes out, you will see junk yields surge. Counterparty risk associated with collapse of Russia (discussed earlier this morning) might get this party going.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. 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 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: 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. December 16th, 2014 InvestWithAlex.com
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Subprime Short Bets Big Against Junk Bonds…..Should You Follow. Google