The Call Before Last Call

This is likely the last time I'll write on this topic before the landslide starts. That being said, this post is not financial or investment advice, you are ultimately responsible for your actions and decisions. If you gain, those are your gains and if you lose, those are your losses; there is no double standard here; if you blame someone else for your losses, you better be sharing your gains with them too if you profit.

So you have to wonder, how many people are waiting for the last call of the markets before they get themselves to safety? Maybe there are people waiting for mad money Cramer to tell them it's time to sell? I sincerely hope not, they'll lose everything.

So why would someone think everything is ok with the economy? What indicators say everything is ok? Bond yield curves are pointing at a big recession coming, as well as deep negative interest rates. The Stock Market is completely propped up by plunge protection teams to let the big players get their money out first. Credit card companies are forgiving customer balances as they move out of foreign markets, instead of trying to collect because that would cost more. Debt restructuring businesses are booming. Retail stores are closing at record numbers, despite Amazon only controlling about 5% of the retail space, and another 5% being taken by all other online retailers, leaving 90% of sales still in brick and mortar that is failing hard to dollar stores.

Is that it? No, I can go on for pages. Businesses are tightening their belts, or preparing to. Home Equity lines of credit have been abused. Millions of homes that people defaulted on are vacant and falling apart, or in some cases being squatted in. Tourism is down. Foreign investors are exiting. Home prices have peaked. Dangerous mortgages exist everywhere that won't be easily renewed. Every country in the world is devaluing their dollar to stay competitive. There's a crime boss in the white house who is using mob tactics against other nations with no success.

I think its important to understand the basics of how an economy functions, or is supposed to function. I highly recommend watching the following video that Ray Dalio put together 5 years ago. He was off the mark as to where we were in the cycle, but the rest describes how the economy is intended to function and it's very close to how my parents described economics to me as a child, so I'm a bit biased lol.

People need to be careful at this point we are at, because the deleveraging really hasn't reached full speed yet, in my opinion. The amount of off record debt in the system is far larger than this video would have you believe. Debt that the banks create is only part of the credit in the system, as private lending to both the consumer and small business exists in large numbers that banks are not always privy to or aware of.

So when you see the official numbers and statistics, realize that the disparity between the rich and the poor is greater than we're led to believe, and the deleveraging is going to be painful as hell for many.

Please be safe and smart, both if you can. Thanks for reading, shares and comments are always welcome.