American markets are looking scarier than Halloween.
For those familiar with our market reports, we endeavor to make the complex simple.
Toward that end, we’ve tracked the sickening influence of misguided Fed policy on everything from over-valued stocks and Frankenstein bonds to a global credit crisis and looming currency crisis.
We’ve also reminded readers of a Rigged to Fail market system which was designed to serve an affluent minority over a struggling majority.
In more than one report after the next, we have empirically shown how the financial world is tilting evermore toward a neo-feudalism of serfs and lords in the backdrop of a capitalist system that died long ago.
As for what’s ahead, we can and will go through ever more extensive word counts to remind, warn and prepare readers for the recession ahead and the portfolio protections needed to insure wealth in the coming financial crisis, which in many ways, is already upon us.
Today, and to make these points sink in with graphs rather than words, we’re going to make the foregoing themes easy to grasp and quick to review.
Let’s dig in.
Proof of Recession
As for the current recession which Powell and the rest of the DC cabal and propaganda/government-complicit media refuse to confess, the below graph makes the current and coming nightmare impossible to deny.
Namely, the 10Y-2Y inverted yield curve is the easiest and most neon-flashing sign of a recession already in play and of an even deeper one ahead.
Toward that end: See for yourself:
The current inversion is at levels equal or worse than prior disasters, of which Tom and I are all too familiar, namely the NASDAQ implosion of 2000-03 or the Great Financial Crisis of 2008.
Record-Breaking Bets Against this Bloated Beast
Another graph worth chewing on for just a few seconds is the record number of put-buying (i.e., betting against the markets) happening in real time—as in right now.
Again: See for yourself.
Last week, retail traders purchased a record $19.9 billion in put options vs. only $6.5 billion in call options.
In other words, investors are overwhelmingly bearish on the markets.
Folks, this is the first time in history that put options were 3X the number of call options.
Think about that a second.
Land of the Free?
Finally, in case you still believe that Powell, the Fed and all who preceded him can continue to pretend that their inflationary policies have nothing to do with the social fabric of America, let us remind you again that the so-called economic bailout following the 2008 Great Financial Crisis was never about the real America, but rather just one class of Americans.
As the following chart reminds, and as we’ve repeatedly reminded, greater than 53% of all US stock market wealth is held by the top 1% of the U.S. population, and greater than 89% of all stock market wealth is held by the top 10% of the American population.
As for the bottom 50% of America, they own only 1% of total stock market wealth in the U.S. and have enjoyed almost nothing of the many years of Fed-created market bubbles.
Again, see for yourself:
Why is this important?
All the trillions upon trillions of debased dollars created by the Fed to bail out the banks and the markets have not saved the real economy.
Instead, YOUR central bank simply financed the greatest wealth transfer and wealth inequality in the history of the once united and now dis-United States.
Having made the rich even richer, the very same Fed who engineered the cancerous bubbles of yesterday is today giving the American middle class a crippling inflationary sucker punch (and invisible tax) as the nation heads into a recession which may hurt the top 10% but make slaves and hand-out-dependent victims of the bottom 50%
See how economics in general and central banks in particular can change history and destroy not only free-markets, but free societies?
The foregoing graphs are riddled with implications well beyond the words given above.
And the current and pending volatility in the securities markets are riddled with equally dangerous implications for investors.
Tom and I created Signals Matter to assist and protect the ignored (i.e., bottom 90%) of the investing population.
In short, we set out to give the best of what is Wall Street (admittedly tough to find) and direct this experience to the rest of Main Street.
We hope you’ll join us as the world spirals in the direction the foregoing graphs so clearly forewarn.
Signals Matter Market Reports generally reflect the company’s long-term macro views and are posted free of charge each week at www.SignalsMatter.com, on LinkedIn, and directly to your inbox by Signing Up Here. Our Portfolio Solutions are generally geared to shorter timeframes, may therefore differ from our longer-term perspectives, and are available to Subscribers that Join Here. For three ways to engage with us, please click: 3 Ways to Engage.