You are not going to like what I'm going to ask you to do today...
My friend, you need to be prepared to experience five separate corrections in the final 12 months of the Melt Up.
Let me explain why...
Our inbox is full of panicked e-mails...
Stocks had a terrible couple of days last week. And investors are scared.
Specifically, in a little more than a week (from October 3 to October 11), the major stock indexes fell nearly 7%. The tech-heavy Nasdaq Composite Index fell even more – nearly 9%.
I get it. Moves like this don't happen all the time.
Or do they?
Justin’s note: Bitcoin is stuck in a rut.
Over the last three months, it’s gone absolutely nowhere. Because of this, a lot of speculators are wondering if the next big move in cryptos will be an explosive rally, or a sharp sell-off.
To help answer this question, I recently got Marco Wutzer on the phone. Marco is the earliest pioneer of cryptocurrencies I know. He’s been involved with digital currencies since the late 1990s—long before bitcoin was created.
And that’s why Doug Casey handpicked him to head up Disruptive Profits, our new advisory dedicated to explosive projects in the blockchain space.
In today’s interview, Marco tells us where he thinks the crypto market is headed next… and the best way to profit when cryptos finally break out of their rout.
This will dog the stock market going forward.
Fixed-income investors – a financially conservative bunch buying Treasury securities, FDIC-insured CDs, and similar products that largely eliminate risk – have been getting crushed for a decade: Except for brief periods when inflation dipped to near zero or below zero, their minuscule returns have been eaten up by inflation, or worse, they lost money after inflation, as was the case with shorter-term Treasuries and just about all savings products. But it has ended.
The Consumer Price Index (CPI) rose 2.3% in September (2.27%), compared to September a year ago, the Bureau of Labor Statistics reported this morning. This was down from the 2.9% increase in July. These numbers are volatile, but the trend is pretty clear: Outside of the Oil Bust and a few quarters during the Financial Crisis, inflation is a fixture in the US economy:
We all know a big crash is coming – the question is when.
Rates are rising, stocks are falling (having their worst day in 8 months), and the economic data is starting to turn.
***Dow futures are now down 1000 points during after-hours trading.
Deficits are exploding at the exact same time auto loan applications are falling, mortgage apps are in decline, and in some areas, we are seeing home price reductions.
U.S. consumer debt is now at a record $4 trillion, rising $20.1 billion in August alone.
93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
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That’s borrowed prosperity, and at some point, you have to pay it back.
The yield on the 10-year Treasury just hit a 7-year high.
The markets are in freefall.
In just two days, the Dow Jones index dropped over 1,200 points. The financial media is talking about how this could be the start of another major market collapse.
But before you sell every stock in your retirement account… please listen to today’s podcast.
I answer several questions from nervous investors… and break down why corrections (just like this) are a normal part of the markets.
I explain why there’s no need to panic or fear that another credit crisis is on the horizon.
You’ll see how these major market downturns usually lead to incredible buying opportunities. In fact, I highlight dozens of companies in the S&P 500 you can buy right now… that are trading below 12 times forward earnings and growing by more than 20%.
I also highlight several sectors that are starting to see big inflows as smart money rotates out of high-flying tech stocks. This includes one “hated” sector that could see incredible momentum as interest rates march higher (hint: it’s not financials).
If you’re worried about your portfolio right now… today’s show is a must.
Here's the difference between a recession and a depression: you can't get blood from a stone, or make an insolvent entity solvent with more debt.
There are two basic differences between a recession and a depression:
1. Duration: a recession typically lasts between 6 and 18 months, while a depression drags on for years or even decades, often masked by official propaganda as "slow growth" or "stagnation."
2. The basic dynamic: recessions are business / credit cycle eventsthat wring out the excesses of credit expansion (i.e. lending to unqualified borrowers who subsequently default) and mal-investment in low-yield, high-risk speculations and projects that only made financial sense in the euphoria of bubble psychology (i.e. animal spirits acting as if bubbles never pop)
Investing nerds, listen up...
I have some shocking news for you.
Before I get to it, if you are NOT an investing nerd like me, then you are welcome to skip today's letter... No hard feelings.
However, if you have heard experts say things like, "Stocks have to crash soon because of the CAPE ratio," then I urge you to read on. I have a revelation about this for you today...
To give you some context, the CAPE ratio is a widely quoted measure of stock market value. It is the "cyclically adjusted price-to-earnings ratio." It was designed by Dr. Robert Shiller to give us a long-term look at stock valuations.
I'll share today's conclusion up front:
Justin Sun, CEO of decentralized internet startup TRON, has hinted at a forthcoming partnership with an unknown firm valued at “tens of billions of dollars.”
The tweet, posted Friday, Oct. 12, gives little information, stating that:
“Finally, First time to partner with tens of billions USD valuation industry giant. Guess the name.”
Twitter followers were quick to join the guessing game: one proposed Alibaba – Sun is a graduate of Alibaba founder Jack Ma’s Hupan university, as his Twitter profile states, to which another replied: “Alibaba is worth more than 500 billion. Not tens of billions.”
This is the second time that the CEO’s tweets have made crypto headlines this month: on Oct. 8, Sun claimed the TRON token’s forthcoming update would see it beat Ethereum (ETH) on speed and EOS on cost, prompting an 8 percent surge in the asset’s value.
Stock markets around the world were crushed yesterday…
The Dow Jones fell 800 points, its biggest dump since February. The Nasdaq fell 4% (its worst day in seven years).
Japan fell 3.9%. Chinese stocks fell 5.2% to their lowest since 2014.
And people are freaking out (the market’s fear gauge, the volatility index (VIX) surged 43.9% yesterday).
I’ve been writing for months that the current bull market could easily go on for another few years… or it could all come crashing down tomorrow.
It’s possible the market lemmings simply “buy the dip” once again and push the market back up. Or, maybe, we should be legitimately concerned…
Two Americans sat in a plush office on the 27th floor of a tower in Hong Kong.
Their eyes were fixated on the live action coming across their TV screens.
Across the street, a horse race was thundering to a dramatic finish. But seated in their plush office chairs, Bill Benter and Paul Coladonato were only interested in the lines displayed on three computer monitors.
Those lines showed every bet they had made on the race.
The citizens of Hong Kong bet more on horse racing than anyone else on Earth.
And that particular race, on November 6, 2001, was a historic one. Rollovers from six previous races in which no one had won the jackpot had resulted in a larger pot than ever before.
More than 1 million people placed bets.
Last month I was in a series of high-level meetings with members of Congress and the Senate in Washington.
While there’s been major news about the Supreme Court, my discussions were on something that both sides of the aisle are coming to consensus over.
You see, issues that impact your own bottom line are way more about economics than they are about politics. On Capitol Hill, leaders know that. They also know that voters react to what impacts their money. That’s why, behind the scenes, I’ve been discussing issues focused on protecting the economy.
Behind closed doors, we’ve been working on how to shield the economy from Too Big to Fail banks and how the U.S. can better fund infrastructure projects. These are initiatives that all politicians should care about.
In 2003, I started recommending Apple to my clients.
At the time, the stock had been destroyed. Prices dropped from a high of $36 per share to $12 when I bought it.
Shortly after I started buying, news came out there was massive insider selling… and the stock plummeted to $7.
Who was that insider?
Steve Jobs—the guy who rescued Apple.
On March 19, 2003, Jobs disposed of 27.5 million shares via his stock options. He would eventually sell a total of 55 million shares (via stock options sales to Apple) that year for an average price of $1.36 per share.
Imagine the calls I got from my clients at the time…
“But we’re a long way from neutral at this point.”
When asked how much he worried about another “financial crash,” Fed Chairman Jerome Powell told PBS News Hour that the “next set of problems” wouldn’t “look a lot like the last set of problems we had.” It would be “something else, a cyber-attack, some type of global event.” And then he threw in the zinger: “Or maybe it will surprise us and look exactly like the last one.”
It’s those zingers that deviate from the official script that make his Q&A sessions so revealing – I assume, purposefully so. And he pointed out just how hawkish the Fed is getting in its “very gradual” manner.
The interview was wide-ranging and triggered laughter in the audience on several occasions, a feat for Fed Chairs, but I’ll focus on what he said concerning risks and interest rates.
Ripple-powered payments app MoneyTap has now gone live, according to an official tweet October 3. The consumer-focused service was co-developed by Ripple and Japanese financial services giant SBI Holdings.
According to the product’s website, MoneyTap will use Ripple’s blockchain solution xCurrent to enable domestic bank-to-bank transfers in “real time.” Account holders at three participating Japanese banks – SBI Sumishin Net Bank, Suruga Bank and Resona Bank – can send funds using the mobile app, which is compatible with both iOS and Android devices.
After registration, users will reportedly need just their cell phone numbers or a QR code to complete transfers in either Japanese yen or foreign currencies, without a commission fee. The payment system will be secured using the devices’ inbuilt security technology, such as biometric login authentication systems that use fingerprint scanning.
This month marked the 10th anniversary of Lehman Brothers collapse. Many say that such a collapse will never happen again because regulators will simply not allow it. I predicted the fall of Lehman Brothers earlier in 2008 when I was a guest with Wolf Blitzer on CNN’s Larry King Live.
Let me refresh your memory the events leading to the largest bankruptcy filing in U.S. history:
“In 2008, Lehman faced an unprecedented loss due to the continuing subprime mortgage crisis. The loss was largely due to Lehman holding onto large positions in subprime and other lower-rated mortgage tranches when securitizing the underlying mortgages. Huge losses accrued in lower-rated mortgage-backed securities throughout 2008. In the second fiscal quarter, Lehman reported losses of $2.8 billion and decided to raise $6 billion in additional capital by offering new shares. In the first half of 2008 alone, Lehman stock lost 73% of its value as the credit market continued to tighten. In August 2008, Lehman reported that it intended to release 6% of its workforce, 1,500 people, just ahead of its third-quarter-reporting deadline in September.”