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Former Fed and Treasury Staffer Predicts collapse of Stocks and Bonds


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2019 Dec 12, 8:09am   2,725 views  54 comments

by NuttBoxer   ➕follow (0)   💰tip   ignore  

Just a reminder, this is NOT what a successful economy looks like. As long as we are under central bankers, boom/bust is our only option within the system.

https://www.zerohedge.com/markets/repocalypse-20-deck-turn-repo-rates-are-blowing-out?utm_campaign=&utm_content=ZeroHedge:+The+Durden+Dispatch&utm_medium=email&utm_source=zh_newsletter

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1   Goran_K   2019 Dec 12, 8:12am  

So where are you parking your money Nutt?
2   NuttBoxer   2019 Dec 12, 8:18am  

Assets that independent of the dollar, are under my control, and are liquid.
3   Onvacation   2019 Dec 12, 8:21am  

NuttBoxer says
Assets that independent of the dollar, are under my control, and are liquid.

Yams and ammo?
4   Ceffer   2019 Dec 12, 8:24am  

Cannibal Anarchy Futures! The path is CLEAR
5   clambo   2019 Dec 12, 10:57am  

The W5000 total stock market index is up 50% since Nov 4, 2016.

it's likely to rise another 15-30% in the next 2 years.

Low unemployment, low interest rates, high consumer confidence, lower taxes, higher labor participation, more money for people to spend on shit=higher corporate profits=stocks rise.

Sit on the sidelines; I don't care, you still will be paying for shit and buying Apple or whatever stuff and I get a little tiny piece of the money.

That's how it works boys; either you are an owner or you are a customer.
6   Heraclitusstudent   2019 Dec 12, 12:42pm  

Zerohedge is a Russian propaganda outlet that is permanently calling for a depression. Even in 2010 they were ultra bearish and calling to sell stocks. What's new?
7   zzyzzx   2019 Dec 12, 12:49pm  

Since a Trump won't be president forever, what this staffer said could happen eventually. Hopefully by them I will be retired and living in Caligulan splendor off dividend paying stocks.
8   Goran_K   2019 Dec 12, 12:50pm  

NuttBoxer says
Assets that independent of the dollar, are under my control, and are liquid.


Like bullets? C'mon give us the scoop man.
9   NuttBoxer   2019 Dec 12, 1:02pm  

Long term, metals, ones that are recognizable and don't carry high premiums. Short term, three months expenses in cash. I don't like gambling, and have a family to support, so no stocks, bonds, or any other asset that only has value in paper. A small business or land are also good investment.

Sorry, nothing groundbreaking.
10   Shaman   2019 Dec 12, 1:09pm  

NuttBoxer says
Short term, three months expenses in cash


That’s just good family policy no matter who you are. You could get hurt and not be able to work, or lose a job, or whatever.

As for the OP... a staffer’s opinion is what you’re betting on?
Pretty thin evidence!

I’m gonna agree with clambo that the market remains in historically great shape. Yes, the inevitable cycles must continue, but you’ve got to allow for the anomalies like a Great Recession caused by housing loans or a Golden Age caused by the Golden Golem of Greatness!
11   Goran_K   2019 Dec 12, 1:29pm  

I really want them to make perfected versions of Rin's sex bots.

I'd invest lots of money into selling those.
12   NuttBoxer   2019 Dec 12, 4:55pm  

Shaman says
As for the OP... a staffer’s opinion is what you’re betting on?
Pretty thin evidence!


I take it you didn't read the article...
https://www.credit-suisse.com/microsites/events/macro-conference/home/speakers/zoltan-pozsar.html

That's like saying Edward Snowden was just some low level contractor.
13   WookieMan   2019 Dec 12, 5:27pm  

NuttBoxer says
I take it you didn't read the article...
https://www.credit-suisse.com/microsites/events/macro-conference/home/speakers/zoltan-pozsar.html

That's like saying Edward Snowden was just some low level contractor.

Not a person here or anywhere truly knows what level of access Snowden had and that's a fact. He mentions what he had access to, but there's this assumption that there's not more he doesn't know. If he was climbing Everest he might only be at 18k feet. No one knows.

And it's not about reading the article. I read your link here. It's a fluffed up resume. My resume makes me looks like the first born of Jesus as does every resume if you know how to write one. If people think Realtors are bull shitter's then I'd take your link with a grain of salt and financial services and bankers are an order of magnitude worse.
14   EBGuy   2019 Dec 12, 7:03pm  

The shale beatdowns will continue until morale improves... Anyone buying energy?
Energy is down to a record-low 4% weighting in the S&P 500 and is worth less than the market value of Apple (AAPL). ...
Energy could surprise and emerge as one of the top sectors in the next 10 years. Stoeckle favors Chevron (CVX), ConocoPhillips (COP), BP (BP), and Total (TOT). The European stocks are particularly cheap, in part because of the divestment effort. BP stock, at $37, and Royal Dutch Shell, at $58, both trade for just 13 times projected 2019 earnings and yield 6.5%.
15   FortwayeAsFuckJoeBiden   2019 Dec 12, 7:09pm  

Run would buy them all.

Goran_K says
I really want them to make perfected versions of Rin's sex bots.

I'd invest lots of money into selling those.
16   FortwayeAsFuckJoeBiden   2019 Dec 12, 7:11pm  

Am I doing it too much? 2 years worth of income in savings for rainy day. I have stocks too, but just afraid to put more.

I need guys like Gorman to help me manage my money.

NuttBoxer says
Long term, metals, ones that are recognizable and don't carry high premiums. Short term, three months expenses in cash. I don't like gambling, and have a family to support, so no stocks, bonds, or any other asset that only has value in paper. A small business or land are also good investment.

Sorry, nothing groundbreaking.
17   Patrick   2019 Dec 12, 7:23pm  

clambo says
higher labor participation, more money for people to spend on shit=higher corporate profits=stocks rise


This is really key.

When the poor get money, they spend it pronto. This boosts the economy from the bottom up.

When the rich get money, they throw it on the pile in the basement of the mansion. This causes the economy to stagnate.

Trump has been great at creating jobs for poor US citizens, and this is helping to drive the whole economy.
18   marcus   2019 Dec 12, 7:29pm  

:
@Nuttboxer Thanks for following this and keeping us updated. In a previous life I followed this stuff somewhat. I don't claim to understand it though. Far more so now than then.

Most people have no clue how strange these times are relative to interest bearing securities and interest rates, which of course have EVERYTHING to do with what's happening in the financial market.

Patrick says
Trump has been great in creating jobs for poor US citizens, and this is helping to drive the whole economy.


Hahahaha, ohh Patrick. You Trump fan boys crack me up. Truly. You so desperately want Trump to have credit for what's happening in the financial market. I'll watch you sprinting in the other direction if they crash. Not to worry, there are people with predesigned arguments that are ready to go.

AS for jobs. I already posted the labor participation graphs.
20   Rin   2019 Dec 12, 8:17pm  

Fortwaynemobile says
I have stocks too, but just afraid to put more.


Just put what you have now into a DRIP and forget about it.

As for adding new stocks, I'd only buy dividend ones where their price action has already been beaten down to the point where in effect, a market correction wouldn't have the same impact as a stock which was riding high from earlier on. So for example, my local energy company, Eversource, has never seen any technical correction for much of the prior decade so while it still gives out a healthy dividend, I'd rather wait for a general market correction before I start buying in because it'll allow P/Es to contrast while at the same time, giving out a higher dividend on a per share basis.
21   NuttBoxer   2019 Dec 12, 8:18pm  

WookieMan says
And it's not about reading the article. I read your link here. It's a fluffed up resume.


So I'm unclear. Did you work at the Fed? Treasury? One of the biggest banks in the world? Are you a trusted by your peers in the financial markets as an expert on these matters?

You guys can dismiss all you want, but none of you have the experience, or the insight of this guy. Not even close. I played a little ball in High School, but I don't begin to assume I know more than Jordan.
22   NuttBoxer   2019 Dec 12, 8:20pm  

Fortwaynemobile says
Am I doing it too much? 2 years worth of income in savings for rainy day.


I meant cash on hand, not in a bank.
23   Shaman   2019 Dec 12, 8:25pm  

WookieMan says
And it's not about reading the article. I read your link here. It's a fluffed up resume. My resume makes me looks like the first born of Jesus as does every resume if you know how to write one. If people think Realtors are bull shitter's then I'd take your link with a grain of salt and financial services and bankers are an order of magnitude worse.


I guess he’s sold on this guy. I’ve learned from experience that people usually don’t buy a car or an ideology. They buy a salesman and then sign for the car or accept the theory or cult as fact with a belief akin to faith. The less they understand about a subject, the greater this tendency is to attach themselves to an authority figure and blindly follow his every advice.
Seen it from Kiyosaki to Kangen water to Açaí berry juice to various cults, to financial advisors, to realtors, and all stripes of salesmen. Once a person has “bought,” you can’t convince them there is a problem with the merchandise. They’re too invested... too close to the decision. It’s no longer a referendum on the product but on their one judgement and self worth.
24   Rin   2019 Dec 12, 8:27pm  

Also, gold is holding the range between $1400/oz and $1500/oz, which in effect indicates that the nervousness of central banks from "holding currencies stable" has been tested.

Remember, gold broke $400/oz back in 2002 and never looked back. It's already found support at 300% of its bear market peak circa $1200/oz for a very long time. Contrast that with medical care inflation which is up only 70% since 2002 and that's clearly a market segment which has lost control on its expenditures.

https://www.halfhill.com/inflation_js.html
25   NuttBoxer   2019 Dec 12, 8:27pm  

Patrick says
Trump has been great at creating jobs for poor US citizens, and this is helping to drive the whole economy.


I don't see this in San Fran with record homeless, or in LA. I never saw it in the blue collar neighborhoods in South Bay San Diego that steadily declined over the years. I don't see it in my own financials, which despite steady pay raises, many above 3%, have done little for my bottom line due to rising costs(something you guys never talk about).

A president has as much to do with the economy as Polar Bear selling sunscreen. As long as a central bank controls the money supply, we are permanently fucked. Think I'm exaggerating, look at the value of the dollar since 1913. But I'm talking to a wall(partisan politics believers), one that thinks because it has two sides, one side is different from the other. Guess what? It's the same fucking wall.

You guys called '08, great. But you failed to understand the root cause, the driver behind the collapse. It's bigger than house loans, otherwise it wouldn't happen again.
26   Rin   2019 Dec 12, 8:31pm  

In addition, for gold, one needs to factor out the parabola of 1978 where it spiked from $190/oz to $850/oz prior to the crash.

In reality, gold never saw $190/oz ever again even after Volcker put the brakes on stagflation.
27   just_passing_through   2019 Dec 12, 8:32pm  

I've been listening to Danielle DiMartino Booth lately.

If I'm going to listen to someone tell me I'm fucked I'd rather hear it from a Texan with a great rack.

www.youtube.com/embed/e7seDaUyl7A
28   NuttBoxer   2019 Dec 12, 8:33pm  

Shaman says
I guess he’s sold on this guy.


Never heard of the guy before today, and made it pretty clear I don't gamble in markets. Just know he's more into this shit than anyone here will ever be. But I understand, you need to believe you're choices are keeping you safe, and you won't lose everything like so many did in '08.

If the economy is so great, why is it no one can afford to retire anymore?
29   NuttBoxer   2019 Dec 12, 8:35pm  

Rin says
Also, gold is holding the range between $1400/oz and $1500/oz, which in effect indicates that the nervousness of central banks from "holding currencies stable" has been tested.


Actually it means they've pumped enough to keep it at bay. But they always lose that game, and resistance is already starting to crumble for the next leg up(big one). Think of that 300% as more of a permanent bottom.
30   Rin   2019 Dec 12, 8:45pm  

NuttBoxer says
Actually it means they've pumped enough to keep it at bay. But they always lose that game, and resistance is already starting to crumble for the next leg up(big one). Think of that 300% as more of a permanent bottom.


I've simply kept my original position which was at the $400/oz mark and never sold. I'm not a gold bug.

If a/o when the central bankers and I don't just mean the Fed but also, BoE, ECB, etc, lose control [ as a group ] and then I'll be back in. For now, however, they have the system setup so that PMs do not look like another long term commodities play.
31   WookieMan   2019 Dec 13, 8:07am  

NuttBoxer says
So I'm unclear. Did you work at the Fed? Treasury? One of the biggest banks in the world? Are you a trusted by your peers in the financial markets as an expert on these matters?

I wasn't making a comparison of myself to Zoltan (author of the OP link - weird name). The link you posted in comment 12 was pure trash in the sense that it was fluffing like all resumes are. As Rin and others have pointed out you can go to Harvard or Yale and still be a complete dipshit. You can be on a Ukrainian energy company board with zero experience and make $80k/mo. You can work for the biggest bank in the world and that doesn't mean shit. So many bull shit artist get into high positions. Hell it's probably a requirement to have that skill... look at POTUS.

I don't give blind faith to anyone, especially in the financial services. Depending on their reach and influence, there is ALWAYS a motive if they're writing about a prediction or where the markets might go. Ultimately the guy is trying to make more money. He's writing about where he WANTS the markets to go to make more money. He can be wrong and all but probably 50 people will even care about his prediction.

NuttBoxer says
I played a little ball in High School, but I don't begin to assume I know more than Jordan.

Not a good example. That's physical achievement. There are probably hundreds of thousands of people that "know" basketball better than Jordan. Hell, look at the team he owns. Massive success on the court.....NOT! This is why achievements don't always translate. Why the top sales person would fail owning the company he works for. For some it can, but it's not a guarantee. Hence why I'm not putting any eggs in the basket of a NY Fed staffer who is given some made up label (usual VP of something) at a bank that 6,000 other employees probably have the same label.
32   Bd6r   2019 Dec 13, 8:26am  

I frankly do not understand jack shit about economy any more. I was raised not to have any debt, to live below my means, etc, but that is out of fashion these days, both with respect to individuals and countries. I do not get how one can go into debt at war-time levels and all is fine and dandy. I do not get how stocks can rise while 50+% of country is fucked. I do not get how 80% of crap we buy is from China and everyone seems to be fine with that, and how our economy can survive. I see @NuttBoxer's point very well, but counter-argument is that money-printing and debt-monetizing crap is now in its 3rd decade and apparently has had little major effects. May be it is different this time, who knows.
33   NuttBoxer   2019 Dec 13, 8:42am  

Rin says
I've simply kept my original position which was at the $400/oz mark and never sold. I'm not a gold bug.


So you really just have another stock. Kind of defeats the purpose if you're hedging against collapse.
34   NuttBoxer   2019 Dec 13, 8:45am  

WookieMan says
I don't give blind faith to anyone, especially in the financial services.


There's overwhelming evidence to support his position, and he's not the first one to say this. It's a matter of denial for you, and to justify it, you pull out the strawman of there is no ultimate truth.

WookieMan says
Not a good example.


It is, your just not familiar with the sport.
35   NuttBoxer   2019 Dec 13, 8:49am  

rd6B says
but counter-argument is that money-printing and debt-monetizing crap is now in its 3rd decade and apparently has had little major effects. May be it is different this time, who knows.


Or we're just following Rothbard's boom/bust cycle, with each bust getting bigger and bigger. You can put off payment, but it doesn't go away. It just keeps getting bigger, and the reckoning more devastating when it arrives.
37   ignoreme   2019 Dec 13, 9:05am  

I don’t understand gold. It’s more volatile then equities but it underperforms.

The problem today is bonds suck and there’s no good alternative. I don’t think gold is a good alternative. Dividend stocks are too expensive and they are too correlated to equities. Maybe you got to look into some of these new types of investment like crowd funded real estate or fractional art. But these don’t have track records and your money is locked up.

I still have about 15% bonds but I’m seriously thinking going to 100% equities with a large cash reserve (3 years living expenses). When the next recession happens invest the cash reserves (1/3 per year) until the market recovery then re-build the reserves.
38   WookieMan   2019 Dec 13, 10:49am  

NuttBoxer says
There's overwhelming evidence to support his position, and he's not the first one to say this. It's a matter of denial for you, and to justify it, you pull out the strawman of there is no ultimate truth.

Please explain exactly what I'm in denial of? The source you are using is a fictitious movie characters name (which is childish, even if we know the actual person) and he cites Zoltan, some big wig banker type that we should just believe? Zoltan looks like he's 35, so experience isn't on his side. I've read the articles and the bio from the one source you've provided. If anyone is in such poor financial shape that they make financial decisions based on one source, there's a reason they got there in the first place.

NuttBoxer says
WookieMan says
Not a good example.


It is, your just not familiar with the sport.

You make a lot of assumptions about people. All I've stated is you're bringing one source to the table, which is a completely valid point. You then post again from the same source. Some people want to believe something so much that they are drawn towards what fulfills their bias. It's human nature.

You've ignored the point that being the best basketball player in the world at one time, means nothing when you have to put together a basketball team and have them perform. Zoltan could have been top of class at everything, it doesn't mean he's actually smart regarding the topic being discussed. That's my point. Bring me 20 Zoltan's and maybe I'd change my point of view. As we stand we have one source, using a fictitious name, citing one other person. Basically nothing.
39   Shaman   2019 Dec 13, 11:07am  

rd6B says
I frankly do not understand jack shit about economy any more. I was raised not to have any debt, to live below my means, etc, but that is out of fashion these days, both with respect to individuals and countries. I do not get how one can go into debt at war-time levels and all is fine and dandy. I do not get how stocks can rise while 50+% of country is fucked. I do not get how 80% of crap we buy is from China and everyone seems to be fine with that, and how our economy can survive. I see @NuttBoxer's point very well, but counter-argument is that money-printing and debt-monetizing crap is now in its 3rd decade and apparently has had little major effects. May be it is different this time, who knows.


I was exactly in your shows about 8 years ago. After correctly predicting the downturn and recession, I was expecting house prices here to crash to at least half price, but the prices were stubborn and then only dropped like 25% before a hard floor was found and they started rising again. This without a good recovery and many people still out of work.
Iwog told me that economic fundamentals did not apply in this situation because of several things:
1)The wealthy are heavily invested in everything, especially real estate, and they refuse to see those investments crash.
2)The wealthy write the rules
3)The wealthy are going to buy up extra housing so it doesn’t drop further.

As predicted, this is exactly what happened, and prices rose very very quickly again. I barely got into the market before they rose a good 10% over bottom!

This taught me a fundamental truth about the economy and government: the wealthy have more money and government influence than they will ever need to ENSURE that things go their way with respect to their investments. They behave like oligarchs, beholden to nobody but each other, and government serves their interests.

They weren’t served well by a rapid job/wage recovery (cheap labor is great for massive profit taking) and so we had the longest and slowest recovery in history under eight long years of Obama.

So my strategy since then is to invest alongside the wealthy, and watch my assets grow as theirs do. I have no power to challenge them, so I invest like they do and reap the crumbs.
40   Rin   2019 Dec 13, 11:18am  

Shaman says
They behave like oligarchs, beholden to nobody but each other, and government serves their interests.


Yes and let me add that to this tidbit below ...


Rin says
I've simply kept my original position which was at the $400/oz mark and never sold. I'm not a gold bug.

If a/o when the central bankers and I don't just mean the Fed but also, BoE, ECB, etc, lose control [ as a group ] and then I'll be back in. For now, however, they have the system setup so that PMs do not look like another long term commodities play.


NuttBoxer says
So you really just have another stock. Kind of defeats the purpose if you're hedging against collapse.


Since precious metals are limited in the way they corrolate to commodities, their price action is very much a sentient of lost confidence in central banking. And yes, each generation will have another crisis/inflection point where gold will go up by another 200-300% as a counterweight to the lose of confidence. But still that's only $5000/oz during the next "doom & gloom" wave.

With that said, a lot of the primary assets of the world are owned by rich ppl and thus, it's highly unlikely that as a collective, meaning the Fed, ECB, BoJ, BoE, etc, will go to hell in a basket simultaneously, which that would in effect, eliminate all business transactions worldwide at once. Instead, they'll be a confidence crisis, the smart money will add some gold, platinum, etc, to their portfolios and then, when the crisis abates via co-coordination of the central banks, then a new PMs plateau will be reached.

The only time the gold bugs got it right was at the 2002-4 $400/oz gold price breakout but at the same time, so did I, because it just came out of a 20 year bear market channel.

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