For months, we have been asked hundreds of questions. We’ve endeavored to address nearly every query we receive directly or in subsequent reports, but the most crucial and common question we’ve seen over and over again is this: WHEN will the market crash?
Well, it’s time we roll up our sleeves and hit this question head on: When will the market crash?
So let’s get to it…
When Will the Market Crash?
As former hedge fund managers, family office CIOs, managing directors, and bankers from the “too big to fail” banks of the U.S. and Europe with over 50 combined years of doing nothing else but investing and trading through three massive market cycles, we’ve seen markets crash more than once…
We have the direct experience and expertise to speak frankly and, well, accurately.
But that does not mean psychically.
The banking and private debt crisis of 2008 was in no way solved, it was merely transferred to the Federal level and has thus become a government debt crisis.
This is critical to note, because unlike banks and citizens, the U.S. government (through its central bank) can create infinite amounts of money to buy its own debt (aka “debt monetization”), thus keeping bond prices up and hence yields and interest rates down, which allows this debt burden to continue far longer than ordinarily expected.
Low rates, moreover, encourage companies to engage in drunken debt rollovers in the securities market, which has seen an unprecedented rise (aka “bubble’) since 2009.
The only thing keeping this bubble going is continued low rates and Fed money creation, which is defacto good for bubbles yet horrific for the real economy, which is why we have now turned a corner wherein GDP will never grow, yet the securities bubble will…
Until, that is, it all just collapses into the largest national and global recession ever witnessed by so-called “free” capital markets.
Needless to say, using old/traditional risk measurement tools and indicators to track the behavior and even culmination of this deadly and new kind of debt game and bubble is less effective today than it was before the great debt crisis (and transfer) of 2008.
The risks today, like the can-kicking policies of the admittedly powerful Fed, are thus as dangerous as they are unprecedented and thereby harder to “time,” which is why we hedge such inevitable risks through carefully monitored cash allocations and recession tracking in our industry-leading Storm Tracker service.
In the video that accompanies this report , we give you our realistic answers to your primary question, and support these responses with data rather than opinion or tarot cards.
That is, we support every point made in my video with links below – think of them as “video footnotes.”
For those who prefer visuals to reading glasses, we think this video hits all the critical signals you need as to WHEN will the market crash, WHY we believe this, and most importantly, WHAT you can do to prepare.
Thus, rather than repeat every point made in the accompanying video on when will the market crash, I’m going to cheat a little bit and simply bullet point the video’s key conclusions with links back to our prior articles which support the assertions we are making.
Normally, we try to minimize such links, but in this particular case, we are adding them now to make this a truly one-stop-shop to put everything into perspective.
Thus, if there was one article that you’d like to save and “click through” to get (and share) the fullest picture of where we are going and when we’ll get there, this is the one. It’s loaded with the information (links) you and your loved ones will need to protect and grow your money while everyone else is hugging their knees once reality replaces central bank “faking it.”
More importantly, this information as to the question of when will the market crash is free to one and all, and we think it may very well be the best single-article for informing as many folks as we can about what to expect, when to expect it, and what to do about it.
Signals to Watch As To When Will the Market Crash
Recently, the National Association for Business Economics released a poll in which 72% of the economists they surveyed forecasted a recession (and hence market sell-off) by no later than the end of 2021, with 38% of those surveyed calling for a recession by the end of 2020 and another 34% calling for a recession by the end of 2021.
Panelists put the odds of a recession for 2019 at only 15%. We do NOT see a recession for 2019. In fact, we fully expect the Fed to create even more money (“QE”) by the year-end to once again bail out the U.S. bond and repo markets, which are desperately thirsty for more “liquidity”–i.e. printed fiat dollars.
As I argue in the video, such bearish forecasts could likely see a recession much sooner than 2021, especially when GDP for Q3 and Q4 of this year see consecutive declines, which are simply inevitable. But again, it’s more likely the Fed still has some fight left, and will print more money by year-end, thus sending markets much higher.
In any case, the bottom line is this: A recession is coming for the simple reason that more debt does not solve a prior debt crisis, it merely extends and postpones the crisis, which means you have to prepare NOW.
To support the question of when will the market crash, I addressed the following critical signals, each supported by the links below:
- The Inverted Yield Curve is screaming “recession ahead” and was a dependable recession indicator (12 months out) in every recession since the end of the Second World War;
- Industrial Production is in contraction alongside PMI declines at lows not seen since 2009. Again, this is because money creation that goes into the bond market helps securities not the actual economy or GDP;
- We are now seeing a stock market completely overvalued by CAPE signals (i.e. price to earnings multiples) and a bond market which is essentially nothing more than a junkyard whose deadly fangs will be seen the moment artificially compressed interest rates spring into deadly highs;
- An escalating trade war that is wreaking havoc on global markets and remains unresolved;
- Dangerous allocations to top-heavy and passive index funds and the distortive effects of rampant stock buybacks;
- Record-high store closings and bankruptcies confirming that the Main Street economy and U. S. middle class (i.e. the real economy) has not at all benefited from the so-called “recovery” which has singularly benefited Wall Street and the top 10% of American households. Such unprecedented wealth disparity is a profoundly dangerous precursor to market and social dangers;
- A transportation recession is already in full bloom as confirmed by data from the Cass Freight Index;
- A Washington D.C. and Federal Reserve in full desperation mode, as evidenced by a capitalist system which is no longer driven by capitalism, but is in fact totally rigged to fail as made all the more apparent by the recent repo disaster that took place on Monday;
- And any number of potential yet unforeseeable “black swan events,” such as a surprise geopolitical and/or military crisis as recently seen in the Saudi Arabian oil fields.
Again, if you click each of these links, we give you the data rather than the drama to confirm the points made in the above video.
If you want a market education all in one place, now you have it. Keep clicking or keep watching.
The Challenges of Timing a Rigged Market & Knowing When Will the Market Crash
As for more precise market timing of the next mega crash, in the supplementary video I address the forces that make such precision challenging yet hardly insurmountable to making informed, data-supported, and wealth-enhancing moves right NOW.
Specifically, I address how cancerous derivative markets (valued at 10X global GDP) have passed the point of managed-complexity that could have once been measured by traditional risk tools. In short, we are now in uncharted (immeasurable) waters of risk, as my prior discussion on complexity theory reminds.
I also address how the U.S. markets will rot last, thus buying us precious time to prepare ourselves for the debt iceberg and market crash looming off our bow.
I concede as well that central banks will not let markets tank without a fight, and depending on just how desperate they become, including the very real possibility of further and extreme money printing, any rational timing forecast made here must humble itself to additional monetary experimentation/desperation – again think of the $275+ billion the Fed just printed this week to bail out the repo markets…
That figure will grow dramatically in the months ahead, as will the markets which feed of new money creation.
In short, the Fed’s days of “supremacy” are indeed numbered, but one would be unwise to underestimate or “fight the Fed” until a clear reversal is signaled, which we believe our Storm Tracker can and will do.
Also, a sudden resolution of the ongoing trade war, if actually achieved, would buy markets months of additional time as well as new highs, as headlines sadly matter as much as (if not more than) cold facts.
Finally, I close the video by underscoring the importance of cash as a risk dampener as well as a profit maker when investors do what almost no one ever does: Sell at tops, buy at bottoms, and therefore make a killing by avoiding getting killed.
Equally important to this simple yet unsurpassed (and time-tested) strategy is a case for gold, a strategy far more appropriate in these non-traditional (i.e. Fed-driven) markets than the outdated (and dangerous) role of traditional investing practices.
So, if you are new to Signals Matter, sit back and start clicking… You are about to become more informed and hence better prepared than 90% of the investing world.
And if you are already an informed subscriber, please help us accomplish our sincere goal of getting the truth about these rigged markets and the pending crisis out to as many good folks as possible. This not fear-spreading, but simply a sound use of math, reason and mutual support.
We thank you.
8 responses to “Everything You Want to Know About When Markets Will Crash and What You Can Do to Make a Killing”
- Linda Stretchsays:
September 20, 2019 at 10:38 am
Well done. Your reports are the only ones I forward to my son who is a financial adviser. I’m going to cash immmediately
- Hoeroa Robert Marumarusays:
September 20, 2019 at 12:06 pm
Roger that Matt Piepenburg!
And thanks again for all you do.
- Brett Fletchersays:
September 20, 2019 at 12:18 pm
Well I asked and you certainly delivered. Loved the link to the “repo disaster”— things are starting to fall apart. Agree that the only thing delaying the inevitable disaster is just how long the Fed can continue this charade of Wall Street support disquised as a recovery.
- Craig Sallinsays:
September 20, 2019 at 1:30 pm
Masterfully done. You’ve given us an excellent scenario to plan accordingly. I’ve actually been expecting a crisis like you have outlined for the past 20 years. It seems that ‘the game’ is finally coming to a culmination.
Thanks for your insights.
- Larry F Silbaughsays:
September 20, 2019 at 3:16 pm
Kudos and many thanks. There is a great need for the reliable information you offer the public in these reports. I will only add that the indicator that is the hardest to quantify is the utter “Rot of Public Trust” – but also the one that we should all fear most. Thank you again.
September 21, 2019 at 2:31 pm
Zero or Negarive Interest rate world is where the US is also heading to join to Europe and Japan to the originator of Arabs world or Isram world society.
Look at the arab world ! No interest world ! Do they have banks ? Yes, like the Iranian National bank ! Do they have private banks which need interest to exist ? So, no private catital formation which businesses need. With zero interest, who is going to lend money ? People with money like Shakes lend money to foreigners who pays interests. Only Goverment will lend money.
What is going on in rhe Arab world in the past centuries or 1000’s years ?
No economic development ! No commercial size money lending ! Only small money lending among close friends and families. That is all they get capitals !
Small business only develops. No match to the free capitalistic world of today and past. So they are poor ! Sure, since oil discovered in their land, developed by Western capitals, and their land loads (Shakes) only get loyalties. Sure, they are rich, but not average people there. Religious people, what can you do for them. Religion interfere to their economy. Church interferes Science in the West. Put Galileo into the jail. Now,they interfere human sciences ! What can you do ?
Anyway, America still has a few more point to go to Zero interests. Therefore, European and Japanese money still coming to America. That is is the time when America join the Zero interest world ! Where else is the money to go ?
China still has a way to go Zero or India, Where else ? Are you going to put your money in China or India ? As long as interest rate go down, older bonds with higher interest rates become more valuable or higher prices. Therefore, buying bonds with even negative yield can make money ! Yields do not matter like dividends for stocks does not matter as long as prices go up. But, when bonds reach Zero interest rates, no more reason to buy bonds.
Only Goverment is to buy like Europe and Japan ! That ( Recession ) is the time when America reaches Zero interest, the Stock markets worldwide collapse big !
- John Steffensensays:
September 22, 2019 at 5:58 am
Thanks Matt, your comments and assessment of the current financial situation are incredibly honest, informative, and a timely warning for our future investment strategy
John Steffensen (Australia)
- Dale Johnkesays:
September 29, 2019 at 10:40 pm
I see almost nothing written about Preferred Stocks in a market collapse and am not certain what to expect, although Fanny Mae and Freddie Mac Preferred stock have dropped sharply, but perhaps for a different reason, their Federal takeover??? Would you please comment on expected price movement for these stocks in a 50% sell off for Common Stocks.