Thursday, January 30th, 2014
By Michael Lombardi, MBA for Profit Confidential
The Great Crash of 2013Today's stock market is setting up for a huge tumble...a collapse that will make the stock market crashes of 2008 and 1929 look like a cake-walk.
I know. It's a dire prediction. But we believe the makings for this collapse have already been put into place. You see...
As the greatest financial crisis since the Great Depression hit America in 2008, the U.S. government and the Federal Reserve pulled out all the stops to save the economy from the abyss.
The government put money into private "too big to fail" corporations and borrowed trillions of dollars to help jump-start the economy.
The Federal Reserve did its share by taking four major steps to "save the economy at all costs."
Brought interest rates to historic lows;
Made money available to big banks that were in trouble;
Bought U.S. Treasury bonds for the first time in history; and
Created trillions of dollars in new money out of thin air.
But the Fed has gone on too long with its unprecedented monetary stimulus. By keeping the money "flood gates" open for so long, we believe the Fed has inadvertently created a stock market bubble.
The Dow Jones Industrial Average has moved from 6,440 in March of 2009 to over 15,000 today. That's the biggest uninterrupted point gain for the Dow Jones in history—a whopping gain of 9,000 points.
But take the rising stock market out of the picture, and all the sudden, the economy doesn't look that great.
In fact, current economic statistics are outright pathetic.
Corporate earnings growth has fallen back to the lowest pace since 2009.
And while the government gives us a manipulated "official" unemployment rate that sounds like it's improving, the real unemployment rate, when you include people who have given up looking for work and who have part-time jobs but want full-time jobs, has been sitting over 14% for years.
People dependent on government handouts now outnumber people with private-sector jobs in 11 states.
Take Social Security out of the picture and one out of every four Americans, 25% of the population, now lives below the poverty line, according to U.S. Census Bureau statistics.
Yes, poverty in the U.S. has reached a 50-year high.
As for the real estate market, while the media tells us the housing market is getting a lot better, it's far from a real recovery. According to my firm's own research, the real estate rebound has been very, very weak.
Click here to watch our special presentation
Data compiler CoreLogic says 10.3 million homes in the U.S. economy still have negative equity. The Mortgage Bankers Association's National Delinquency Survey shows 7.25% of all outstanding loans on one-to-four residential properties were delinquent at the end of the first quarter of 2013.
When we look at the rest of the world, all major economies are in trouble. Japan is back in recession. Many eurozone countries are in a depression and not coming out of it. The two largest economies in Europe, France and Germany, are seeing their economic growth coming to a halt.
On May 22, 2013, it was announced that China's manufacturing sector actually contracted in April. China's economy, the second-largest in the world, has gone from double-digit growth to single-digit growth to no growth—the effects of which will soon be felt globally.
The bottom line: this is the biggest disconnect between the economy and the stock market in history...and it all has to do with the stock market being artificially inflated by the Federal Reserve's prolonged massive monetary stimulus.
Understanding the Three Phases of a Bear Market
The great majority of investors can't fathom what's about to happen to the stock market, because they don't understand the historic three phases of a secular bear market.
Phase One of a bear market brings stock prices down sharply. That's what happened when the Dow Jones Industrial Average fell from 14,164 in October 2007 to 6,440 on March 9, 2009—a tumble of 54%.
Phase Two of a bear market is when the bear lures investors back into stocks. The bear gives investors and analysts the false sense that the economy is improving and that it's okay to own stocks again. The bear has done just that—a masterful job at convincing investors it's a great time to own stocks again.
Once the vast majority of analysts and investors believe the stock market is safe again (that's exactly where we are today), the final phase of a bear market, Phase Three, gets underway and ultimately brings stock prices back down again.
Six Indicators Pointing to a Stock Market Collapse
and What You Can Do to Protect Yourself
Our research and analysis has led us to six proven and time-tested stock market indicators that are all signaling the stock market rally that started in 2009 is about to end abruptly.
The good news is that you could protect yourself from the stock market collapse headed our way. The better news is that, if you position your portfolio properly, starting today, you could actually make money during the next devastating down leg of the market while others struggle like never before.
I present those six proven and time-tested indicators in a special video presentation so you can see for yourself why this stock market is teetering on collapse and how you can profit from its demise.
Watch it here now!:copy and paste the link below LINK