Editor’s Note: This is one of the most important essays you’ll read all year. In this special edition of the Casey Daily Dispatch, E.B. Tucker shares an urgent warning you’re unlikely to hear anywhere else.
There’s a very important warning signal flashing in the financial market right now.
Despite the importance of this signal, few people know about it…even fewer are talking about it.
Don’t be one of the people who don’t understand the vital importance of the bond market and what it’s telling you right now.
This knowledge could help you avoid a huge hit to your net worth over the next 12-24 months. Here’s why…
Most investors focus on just one area of the investment market: Stocks. After all, stocks have a long track record of generating solid, long-term returns. Plus, the idea of owning shares in a small business that grows large - and making 500% along the way - can capture almost anyone’s attention.
But what most people don’t realize is that the bond market is far more important and far larger than the stock market. The bond market is where companies, countries, and individuals go to borrow money. For every $1 worth of stock outstanding, there’s $2 worth of bonds.
Take the U.S. for example. The total value of every traded stock is $23 trillion. That’s a huge number, but it’s around half the value of all the U.S. bonds outstanding. Between corporate bonds, treasury bonds, mortgage bonds, and other varieties, there’s $40 trillion worth of bonds outstanding in the U.S.
Stock investors share in a company’s future profits. They’re optimistic by nature.
Bond investors are pessimists. They only get a promised rate of interest. That rate is usually fixed, so the bond investor doesn’t care about the promise of big profits. While stock investors daydream about the future, bond investors study the borrowing entity’s ability to repay.
It’s this great focus that makes bonds the ultimate canary in the financial coalmine. The bond market spots trouble long before the stock market wakes up to find it’s already here.
There are two types of corporate bonds: Investment grade and junk. Investment grade bonds are issued by the most financially sound companies. Junk bonds are issued by companies with weak financial positions. They are riskier than investment grade bonds.
Sometimes, things work out and investors realize larger gains by owning junk bonds. But when the economy slows down, these companies feel the pain. They don’t always come through with repayment. This makes junk bonds very sensitive to what is happening in the economy. They often flash warning signs before other assets.
The vital thing to watch in the junk bond market is the amount of interest these bonds yield over the amount of interest risk-free government bonds yield. This is called the “spread.”
For example, if government bonds are yielding 2% annually and junk bonds are yielding 5% annually, the “spread” is said to be 3%. If the yield on junk bonds was to rise to 7%, we would say the spread over Treasuries is 5%.
The spread is vitally important to watch because it shows you what bond investors think about the future. If the spread is declining, it means bond investors aren’t worried. They aren’t asking a lot more in interest above what they could earn in government bonds.
If the spread is rising, it means bond investors are asking for more and more interest to compensate them for making riskier loans. It means they are growing more concerned about the ability of borrowers to repay them.
During good times, this spread is low. Risky investments only pay 2-3% more than U.S. Treasuries. As long as good times persist, that’s enough compensation for greater risk. During bad times, the spread expands to 5%...10%...even more than 15% occasionally.
The spread indicator flashed a major warning sign back in 2007. The spread started widening before the stock market started heading south. Something spooked junk bond investors in June of 2007. Stocks took a hit, too, but recovered. They finished 2007 higher than where they started. Meanwhile, the junk bond spread was widening all year. Bond investors knew trouble was coming.
If junk bonds are the canary in the coalmine, that bird died in late June of 2007. Investors who noticed and took action saved 50% by sitting out the market crash. Most people, even professional investors, completely ignored the signal. They continued chasing profits right off a cliff.
You can see it happen in the chart below. The blue line tracks the S&P 500. The black line measures the spread between junk bonds and U.S. Treasury bonds. Focus on the year 2007. You’ll see the black line start heading down (which means the spread was widening) while stocks finished the year just fine.
Thanks to the Federal Reserve’s massive E-Z-Credit program, the economy recovered from the 2008/2009 crisis, and junk bond values recovered with it. But since the crisis, the Fed has kept interest rates at essentially zero.
This has encouraged an incredible amount of corporate borrowing…much of it has been reckless. Money is being loaned to companies that won’t survive the next recession. Junk bond issuance was up 130% higher last year than it was in 2007.
But recent price action in the junk bond market says the party is over… and it’s time to get cautious. If you look back at the chart above, you see the junk bond market sent the exact same telling signal in December of 2014. Just like in the months leading up to the September 2008 crash, nobody seems to notice. The junk bond market is making it clear trouble is right around the corner.
It is signaling that we could be in for another economic downturn, or worse, a crash. Meanwhile, stocks are still near their highs.
Junk bond spreads are widening and junk bond prices are falling. This means the bond market is not confirming the stock market rally. Bonds are saying, “Don’t trust the stock rally.”
If you have a lot of your wealth tied up in stocks and bonds, I urge you to pay attention to this warning. The bond market is far larger and far more important than the stock market. And right now, the most sensitive part of the bond market is falling while stocks are rising.
With this in mind, consider moving to a very conservative financial position, which means holding plenty of cash and avoiding speculative stocks and junk bonds.
Make sure to own some gold as financial disaster insurance. And continue paying attention to what bonds are saying about the health of corporate America. I expect it will continue to say, “The boom times are over.”
I also urge you to watch a special video we’ve recently released. It explains other critical steps you should take immediately to protect yourself from the next financial crisis. Click here to start watching now.
Dispatch: U.S. On the Precipice of Deflation
Weakest economic recovery in seven decades gets weaker
By Elliott Wave International
Most people extrapolate present trends into the future. But yesterday's trend can look like day vs. night when tomorrow arrives.
Almost no one expected deflation when the December 2007 Elliott Wave Theorist said:
Inflation has raged, but deflation is next.
What followed was the worst financial crisis since the Great Depression and the weakest economic recovery since World War II.
The American economy remains weak. Growth is at the lowest level in more than three decades. ... Wages have been rising at the slowest pace since the 1980s. ... This is the weakest recovery since World War II ... . (U.S. News & World Report, August 23)
A co-founder of AOL and the chairman of Quicken Loans just graded the U.S. economy: They scored its performance near the bottom of the class.
Grading the U.S. economy, the rosiest scores from two billionaires on [October 23] would average about 68, equal to a D+ on a report card. (CNBC, October 23)
Deflationary pressures are increasingly evident.
U.S. consumer prices fell 0.1% in August. Producer prices have been even weaker. The nation's PPI fell 2.9% in August, and it's declined every month since December 2014.
These charts are from our new report, Deflation and the Devaluation Derby:
The graphs show several key economic measures that reflect years of broad-based distress, despite historic monetary and fiscal stimulus.
The chart above of real mean and median U.S. personal income shows another long-term reversal that is hitting most Americans in their pocketbook. While the mean measure shows, on average, that personal income peaked with the real estate boom in 2006, the median measure shows that half of all U.S. citizens are earning less money in real terms than they were in 2000. The five-wave form of the rise in mean income is further Elliott wave evidence that the decline is about to accelerate.
Our July Elliott Wave Financial Forecast said, "Deflation is just getting started." The October Financial Forecast provided a reminder of that warning and added that deflation "is already deeply entrenched in many flagship quarters of the global economy."
This article was syndicated by Elliott Wave International and was originally published under the headline Dispatch: U.S. On the Precipice of Deflation. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Obama Law License Controversy
IS THERE IS NO END TO THE OBAMA LAW LICENSE ROTTENNESS - WE KEEP FINDING STUFF OUT ABOUT BOTH OBAMA'S THAT THE LIBERAL NEWS MEDIA REFUSES TO DISCLOSE.
From a former intelligence officer...email@example.com
I checked this out and Barry lost his law licence for lying about drug use (among other things) on his application
Michelle Baby lost hers in 1991: Michelle Obama tried to extort some Sidley clients and lost her law license.
Ms. Obama entered Mayor Richard Daley's Office, courtesy of the Marxist Valerie Jarrett daughter in law of Vernon Jarrett the bosom friend of Frank Marshall Davis, the Marxist pedophile mentor of Barry Soetoro (1970-1978).
It is verified and Truth or Fiction shields them just as the legal website intended when they voluntarily gave up their licenses to keep out of the public record.
I knew they had both lost their law license, but I didn't know why until I read this.
This is legit. I checked it out myself at https://www.iardc.org . Stands for Illinois Attorney Registration And Disciplinary Committee. It's the official arm of lawyer discipline in Illinois; and they are very strict and mean as hell. (Talk about irony.) Even I, at the advanced age of almost 65, maintain (at the cost of approximately $600/year) my law license that I worked so hard and long to earn.
Former Constitutional Law Lecturer and U.S. President Makes Up Constitutional Quotes During State Of The Union (SOTU) Address.
1. President Barack Obama, former editor of the Harvard Law Review, is no longer a "lawyer". He surrendered his license back in 2008 in order to escape charges he lied on his bar application. A "Voluntary Surrender" is not something where you decide "Gee, a license is not really something I need anymore, is it?" and forget to renew your license. No, a "Voluntary Surrender" is something you do when you've been accused of something, and you 'voluntarily surrender" your license five seconds before the state suspends you.
2 Michelle Obama "voluntarily surrendered" her law license in 1993. after a Federal Judge gave her the choice between surrendering her license or standing trial for Insurance fraud!
3. So, we have the first black President and First Lady - who don't actually have licenses to practice law. Facts.
4. A senior lecturer is one thing, a fully ranked law professor is another. Barack Obama was NOT a Constitutional Law Professor at the University of Chicago.
5. The University of Chicago released a statement in March 2008 saying Sen. Barack Obama (D-Ill.) "served as a professor" in the law school-but that is a title Obama, who taught courses there part-time, never held, a spokesman for the school confirmed in 2008.
6. "He did not hold the title of Professor of Law," said Marsha Ferziger Nagorsky, an Assistant Dean for Communications and Lecturer in Law at the University of Chicago School of Law.
7. The former Constitutional Senior Lecturer (Obama) cited the U.S. Constitution the other night during his State of the Union Address. Unfortunately, the quote he cited was from the Declaration of Independence ... not the Constitution.
8. The B-Cast posted the video: http://www.breitbart.tv/did-obama-confuse-the-constitution-with-the-declaration-of-independence/
9. Free Republic: In the State of the Union Address, President Obama said: "We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we are all created equal.
10. Um, wrong citing, wrong founding document there Champ, I mean Mr. President. By the way, the promises are not a notion, our founders named them unalienable rights. The document is our Declaration of Independence and it reads:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
11. And this is the same guy who lectured the Supreme Court moments later in the same speech?
When you are a phony it's hard to keep facts straight.
Keep this moving -- educate others about the Obama law license controversy.
COMMENTS ABOUT THE OBAMA GRIFTERS, SCAMMERS AND OBAMA LAW LICENSE CONTROVERSY -
I am an Eagle Scout who is loyal, truthful, honest and trustworthy to you. “Be Prepared” is the Boy Scout motto. Isn't it?
You can learn more about the planned Hitler-like one-world government dictatorship - a 100 year old insidious takeover plot by inter-generational central banking elite - at my sister site www.one-world-government.org Hurry your and the worlds survival is at risk!
Obama Law License - continued
Pres. Barack Obama – Editor of the Harvard Law Review – Has No Law License???
May 15, 2009 by Johnny Alamo
I saw a note slide across the #TCOT feed on Twitter last night that mentioned Michelle Obama had no law license. This struck me as odd, since (a) she went to school to be a lawyer, and (b) she just recently held a position with the University of Chicago Hospitals as legal counsel — and that’s a pretty hard job to qualify for without a law license.
But being a licensed professional myself, I knew that every state not only requires licensure, they make it possible to check online the status of any licensed professional. So I did, and here’s the results from the ARDC Website:
She “voluntarily surrendered” her license in 1993. Let me explain what that means. A “Voluntary Surrender” is not something where you decide “Gee, a license is not really something I need anymore, is it?” and forget to renew your license. No, a “Voluntary Surrender” is something you do when you’ve been accused of something, and you ‘voluntarily surrender” your license about five seconds before the state suspends (or disbars) you.
I tried looking up why she would “Voluntarily surrender” her license, but Illinois does not have it’s 1993 records online.
But when I searched for “Obama”, I found this:
“Voluntarily retired” — what does that mean? Bill Clinton hung onto his law license until he was convicted of making a false statement in the Monica Lewinsky case and had to “Voluntarily Surrender” his license too.
This is the former editor of the Harvard Law Review who doesn’t seem to give a crap about his law license.
Something else odd; while the Search feature brings up the names, any searches for the Disciplinary actions ends quickly.
As in, Too Quickly. Less than a half-second quickly on a Search Engine that can take five seconds to Search for anything.
As in, “there’s a block on that information” kind of thing.
So we have the first Lawyer President and First Lady — who don’t actually have licenses to practice law.
There’s more to this story, I’m sure. I’ll let you know when I find it.
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The GREATER DEFLATION is approaching quickly!
We need to get the word out or else we will all be seeing each other down at the soup line.
Economic Collapse Investing - Hurry Before You Are Too Late!
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I, DELWYN LOUNSBURY THE DEFLATION GURU, am an Eagle Scout who is loyal, truthful, honest and trustworthy to you. “Be Prepared” is the Boy Scout motto. Isn't it?
Beware the coming deflationary Greater Depression caused by years of evil Zionist bankster economic turmoil and war leading to a totalitarian takeover in a fascist socialist one world government dictatorship. Hurry before it is too late - GET PREPARED by joining Club EWI (Elliott Wave International
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WHY PRESIDENT JOHNSON, J. EDGAR HOOVER, THE CIA, MASSOD, MAFIA, BANKSTERS ALL ZIONISTS * KILLED PRESIDENT KENNEDY IN A FASCIST COUP TO FURTHER ONE WORLD GOVERNMENT BY SOCIALIST DICTATORSHIP * PS MAINSTREAM MEDIA, HOLLYWOOD AND BOTH POLITICAL PARTIES ARE NOW ZIONIST
JFK CONSPIRACY SPEECH - REASON PRESIDENT JOHNSON AND HEAD OF FBI - J. EDGAR HOOVER DO COVERT COUP KILLING PRESIDENT JOHN F KENNEDY.
THEN IN BANKSTER SECRET SUBVERSION SABOTAGE SCHEME - THEY HAVE JACK RUBY - (RUBENSTEIN - ZIONIST MAFIA) - CLEAN UP AND ASSASSINATE PATSY LEE HARVEY OSWALD
By JFK 1961
"The very word "secrecy" is repugnant in a free and open society; and we are as a people inherently and historically opposed to secret societies, to secret oaths and secret proceedings.
We decided long ago that the dangers of excessive and unwarranted concealment of pertinent facts far outweighed the dangers which are cited to justify it. Even today, there is little value in opposing the threat of a closed society by imitating its arbitrary restrictions.
Even today, there is little value in insuring the survival of our nation if our traditions do not survive with it. And there is very grave danger that an announced need for increased security will be seized upon those anxious to expand its meaning to the very limits of official censorship and concealment.
That I do not intend to permit to the extent that it is in my control.
And no official of my Administration, whether his rank is high or low, civilian or military, should interpret my words here tonight as an excuse to censor the news, to stifle dissent, to cover up our mistakes or to withhold from the press and the public the facts they deserve to know."
For we are opposed around the world by a monolithic and ruthless conspiracy that relies on covert means for expanding its sphere of influence--on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day.
It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.
Its preparations are concealed, not published. Its mistakes are buried not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed."
"No President should fear public scrutiny of his program. For from that scrutiny comes understanding; and from that understanding comes support or opposition. And both are necessary.
I am not asking your newspapers to support the Administration, but I am asking your help in the tremendous task of informing and alerting the American people. For I have complete confidence in the response and dedication of our citizens whenever they are fully informed.
I not only could not stifle controversy among your readers-- I welcome it.
This Administration intends to be candid about its errors; for as a wise man once said: "An error does not become a mistake until you refuse to correct it." We intend to accept full responsibility for our errors; and we expect you to point them out when we miss them.
Without debate, without criticism, no Administration and no country can succeed-- and no republic can survive.
That is why the Athenian lawmaker Solon decreed it a crime for any citizen to shrink from controversy.
And that is why our press was protected by the First Amendment-- the only business in America specifically protected by the Constitution-- not primarily to amuse and entertain, not to emphasize the trivial and sentimental, not to simply "give the public what it wants"--but to inform, to arouse, to reflect, to state our dangers and our opportunities, to indicate our crises and our choices, to lead, mold, educate and sometimes even anger public opinion.
This means greater coverage and analysis of international news-- for it is no longer far away and foreign but close at hand and local. It means greater attention to improved understanding of the news as well as improved transmission. And it means, finally, that government at all levels, must meet its obligation to provide you with the fullest possible information outside the narrowest limits of national security...
And so it is to the printing press--to the recorder of mans deeds, the keeper of his conscience, the courier of his news-- that we look for strength and assistance, confident that with your help man will be what he was born to be: free and independent."
Barack Hussein Obama never wrote the book advertised here in a 1991
publishers promotional pamphlet put out by his literary agency, Acton
& Dystel, of a coming Obama book for sale, "Images in Black and
Instead, Obama wrote (some say communist Bill Ayers
actually wrote) "Dreams from My Father" an autobiography with a
socialist slant depicting his communist father as an anticolonialist
blaming the west for all the world's ills.
That is where lawless
Obama's rogue renegade radical leftist transforming change ideas came
from. Obama's upbringing came from communist family members (father and
both grandparents on his mothers side), socialist mother and friends. In
fact, Obama's mentor and tutor. Frank Marshal Davis, was on the FBI
communist watch list - member of Communist Party USA (CPUSA) card number
47544. Then came Marxist groups in college and finally socialist groups
like the New Party in Chicago where he was a community organizer
See actual brochure from his publicist stating Barack Hussein Obama was born in Kenya, Africa - above.
"Hope and Change" campaign slogan has morphed into WE HOPE HE CHANGES.
Narcissist Obama showed himself to be an ideologue and a fascist
dictator puppet and mole for the criminal Anglo American financial power
elite international central banking families. This criminal cabal run
by the Zioniist Rothschild and Rockefeller family cabal cartel control
all the central (sovereign) banks of the world and wants one world
government/new world order aka new underworld order control goal of
global socialist fascist dictatorship at any cost or means.
in the Greater Depression, which actually began with the year 2000 dot
com bust, along with the plight of most American citizens worsened under
his statist agenda. Obama's legacy will be trillions of wasted stimulus
spending, grotesque government growth and over 1,000 dictatorial
executive orders - many unconstitutional - most illegal - all socialist
Working for his elite Rothschild handlers,
Obama has led us to the brink of economic collapse and planned coup by
Zionist bankster oligarchs who already control both political parties in
A phony Iran, Syrian and Ukrainian war leading to a
phony World War Three threatening the very survival of mankind is next
if we don't stop the insanity. Watch out for false flag nuclear
explosions in the Ukraine and Iran.
The American, NATO and
Israel elite scheme is to get the people so confused and demoralized
that they can abscond with the last of the world's middle classes power,
freedom and money in the coming Greatest Depression.
THINK: BIG BROTHER AND THE MAFIA JOIN UP!
The BANKSTER elite want a fascist socialist one world government dictatorship.
It's all about control of you and I. Pure Tyranny!