The Fed’s Academic-Based Theories Are Creating a BRUTAL Economic Reality

One of the most frustrating aspects of today’s financial system is the fact that the Fed is being lead by lifelong academics with no real world banking or business experience.
Consider the cases of Ben Bernanke and Janet Yellen.
Neither of these individuals has ever created a job based on generating sales of any kind. Neither of them has ever had to make payroll. Neither of them has ever run a business. What are economic realities for business owners (e.g. operating costs, capital and profits) are just abstract concepts for Bernanke and Yellen.
Moreover, there is a particular problem with academic economists. That problem is that a major percentage of their “research” is total bunk made up in order to make tenure.
This is not our opinion… it is fact based on research published by the Fed itself.
According to a paper published by researchers from THE FEDERAL RESERVE BOARD, it was not possible to replicate even HALF of the results found in economics papers EVEN WITH THE ASSISTANCE OF THE INDIVIDUALS WHO WROTE THE PAPER.
Let’s repeat that: even with the help of those who claimed to have found the results, the results were not replicable.
There is a word for a result that is not replicable. It’s imaginary.
This might go a long ways towards explaining how individuals like Ben Bernanke and Janet Yellen can continue to say with a straight face that they have a grip on the economy, when the results show that they are either completely lost or being dishonest.

Market Warning: the FANGs Are Beginning to Break Down…

The FANGs are beginning to break down.

FANG is an acronym that stands for Facebook, Amazon, Netflix, Google.
These are four of the top performing stocks of 2015. Netflix was the top stock for the S&P 500 returning 134% in 2015. Amazon was #2, returning 118%. Google returned 44% and Facebook returned 34%.
In very simple terms, these are the big market leaders. And now all of them are beginning to break down.
Facebook (FB) is testing critical support. Below this the long-term bull market trendline at sub-100.

Amazon (AMZN) has just taken out support. We’re likely to test to the bull market trendline running back to early 2015.

Will 2016 Bring Another 2008-Type Crash? Pt. 1

The world is lurching towards another Crash.

Japan, which has been ground zero for Keynesian insanity, is back in technical recession. This comes after the Bank of Japan launched the single largest QE program in history: a QE program equal to 25% of GDP launched in April 2013.

This program bought an uptick in economic growth for just six months before Japan’s GDP growth rolled over again. Similarly, an expansion of QE in October 2014 pulled Japan back from the brink, but GDP growth collapsed again soon after, plunging the country into technical recession earlier this year.

Japan is completely insolvent. The country has no choice but to continue to implement QE or else it will go crash in a matter of months. However, with the Bank of Japan already monetizing ALL of the country’s debt issuance, the question arises, “just what else can it buy?”
We’ll find out in 2016. But Japan is now officially in the End Game from Central Banking.
Europe is not far behind.

THREE Reasons Stocks Will Crater in 2016

Happy New Year!

Last year (2015) likely will represent the top for the bull market that began in 2009. Stocks finished the year down, representing the first down year since the March 2009 bottom.

Many analysts will point to the August sell-off as the reason stocks performed so badly, however, looking at the chart, stocks struggled throughout the year, long before the August sell-off. Indeed, at best the S&P 500 was up 3% for the year!



Things are only going to worsen from here.
Firstly, the US Federal Reserve is now tightening. From 2009-2015, the Fed was always implementing loose monetary policies whether it by through QE, Operation Twist, or simply juicing the markets during options expiration weeks.
No longer. The Fed is now raising rates. This will be a major issue for stocks going forward.
Secondly, the US economy is back in recession.