muses of the moment

February 24, 2014

Martin Armstrong talks with Glen Downs Feb 20, 2014

Click here. A two-part interview, about 25 min total.

Martin brings up a good point. When current political governments are overturned, debt payments may not get paid. New governments want to give cash to the people, not overseas bank creditors or internal corrupt government/systems.

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January 22, 2014

News from Pimco

Filed under: Economic Crisis, Global Debt, Martin Armstrong, US Government Debt — totallygroovygirlfriday @ 4:42 am

Much more interesting than the departure of El-Erian is two other little tidbits in this article that you may or may not be aware of. Click here.

Over all, investors pulled $47 billion from Pimco funds last year. It
was the first year on record that Pimco had net annual outflows.

This confirms Martin Armstrong’s prediction of capital flight from bonds to something else.

A statement from the company said that Mr. El-Erian would leave Pimco in
March but keep some leadership roles with Pimco’s parent company, the
German insurer Allianz.

Pimco is not about bonds, it is about insurance. The insurance industry is losing money. The insurance industry is one of the many familiar institutions that will have to figure out another way to make money or make much less money in this Great Reset.

Banking, insurance, and global government debt are closely intertwined. A crack in one affects all others.

Business models that worked for the last 50-75 years will not work as they did moving forward. Those that adapt will survive, those that don’t, will not. Bail-outs and bail-ins only buy time, they are not new business models (contrary to what CEOs may think).

January 17, 2014

New lending laws

Filed under: Economic Confidence Model Cycle, Global Debt, Housing Market, Martin Armstrong, The Banking Crisis — totallygroovygirlfriday @ 11:14 am

Dodd Frank is slowing changing the housing and commercial real estate market. So far, gg’s research on Dodd Frank and its long-term impact confirms Martin Armstrong’s Real Estate Cycle conclusion that there will be a long-term decline in US real estate from 2015 thru 2032.

Click here for a summary of the latest Dodd Frank rules that took effect January 10, 2014.

This most recent rule is a modification of how balloon or interest only loans are designed and qualified will have the most impact on commercial lending. Commercial lending has been slowly moving to private lenders (ie. hedge funds, private equity trusts, individual accredited investors) for the last few years. This new rule will just continue to push that trend. A couple of things about that trend: private investors want higher rates/returns than the bank and commercial real estate has been built on balloon loan structures. The cashflow, revenue returns and business expenses are based on this underlying development budget: interest only loans and renewal of those “balloon loans” every 5-7 years (thus never really paying down the principal). During the last crisis, commercial real estate balloon loans got renewed by that flood of money from the Fed and influence from the gov in order keep the system afloat for a while. In other words, cans kicked down the road. Thoss loans will need private money or new loans structured or lot of cash or all of the above between 2015-2020. This will be a big impact. Private investor lending is in control of the real estate market now. Cash is king.

For residential lending, the impact will be a continued squeeze on prices. If you can’t get a mortgage, you can’t buy a house. And we have alot of foreclosures still sitting on the banks’ balance sheets that need to be sold. Foreclosures that can’t be refinanced because of continued unemployment or the new loan rules. You might note that student loans must be included in the debt-income ratio (which was lowered on 1-10-14). Young people will not be able to buy a house with a traditional mortgage without lower debt-to income ratio, a job, higher credit score, cash in the bank if they want a balloon mortgage, higher down payment, and cash for closing costs. Low mortgage interest rates from commerical banks doesn’t mean a thing if applicants can’t meet these new rules. Young people will rent when they move out of their parents’ house.

These rules are changing the real estate lending system in the US. Private lending is taking over: from hedge funds to crowdfunding. gg sees a few things happening from this change. Lots of cash/capital stuck in these funds until people realize that the system has changed and understand/learn how they can navigate/make a profit the new system. Real estate prices continuing to fall coupled with private lending will mean capital/cash will be lost in the coming years. (Some hedge funds and crowd-funding entities may become Ponzi schemes.) Private investors require higher rates, negating any impact “lower rate” moves from the Fed on the real estate market

If you are going to use cash to invest in private lending funds or other entities, do your due diligence. If you own your house outright, you could owner-finance and actually sell your home. But do your due diligence.

These new rules are designed to buffer non-performing loans from the secondary market impact (derivatives, etc.), like we had in 2007-2009 that banks use to hedge their loans and make their fees. It is designed to keep downturns in the residential and commercial real estate within that market to not move into insurance, stock, and bank markets. There will be unintended consequences to these changes. Lending moves to private capital (which may or may not be transparent), interest rates go up, and money will be lost as investors figure out how this new system works.

Be very careful, do your due diligence!! Young people especially seem to be geared toward trusting crowdfunding systems and use word of month as their due diligence. Learn to read a balance sheet and an income statement and ask for them from any investment you get involved with. And always have a exit strategy!! Think of this change like the tech boom of the end of the last century. Everyone got very excited, everyone eventually got in, and lots of people lost money, but a few got very rich.

The most important impact on the market will be the continued long-term contraction of the real estate market. gg highly doubts that the new lending investors and funds will take that into consideration for their ROI formulas. Bad info in, bad info out.

Cash is king and more people will rent. If you going to get in this system change in the next 15 years , the rewards will be great for the right deal structure. But, do your research and have a couple of exit strategies.

This is part of the over-all paradigm shift during this winter season of the longer-term 80-100 year cycle.

January 14, 2014

Martin Armstrong’s Updated Market Watch January 13, 2014

Click here for Martin Armstrong’s latest Market Watch Charts from 1-13-2014. He covers Global Markets. Make sure to read the “How to Read These Charts” pdf, very important.

Baltic Index Continues to Decline

Filed under: European Debt Implosion, Global Debt, The Banking Crisis, The Financial Crisis — totallygroovygirlfriday @ 9:06 pm

Click here for more info via zerohedge. Although this is only one indicator, it is part of the disconnect between liquidity sloshing around the globe and that “free” money actually boosting global economic growth and business.

January 2, 2014

Excellent Interview on Gold for 2014

This interview from a Switzerland perspective on gold/precious metals with Egon von Greyerz. Click here. About 25 minutes.

One important thing he states is that what he thought would happen (collapse of the dollar and its impact on global fiat money system/precious metal investments) is taking longer than he thought. He didn’t think that people would take the huge amount of printed money from all central banks, not just the US, as actual money. gg agrees, she certainly wouldn’t. But not everyone invests as gg would. Short-term profits rule at the moment, no question about it.

And the very important thing he says : “People should prepare themselves to the best of their ability and then just continue to enjoy life.” Excellent advice. Very good interview.

  • European, and particularly Switzerland, perspective.
  • This person advises very wealthy people, probably mostly Europeans, so he mentions things like art, diamonds, etc. So, not everything will apply to the Main Street investor.
  • This person has been in the business/economics for a very long time. When he talks about the fall of the dollar (especially vs the Swiss Franc), it is on a 50-year time line.

December 18, 2013

Latest Blog Posts from Martin Armstrong dated December 15-18, 2013

Martin has some very good posts the last few days. Groovygirl highlighted a few of them here.

gg says: the common theme is the long-term cycle is in progress, but the final end is still in the future. There are up and downs between now and the end as the process unfolds. In every shift there is an ebb and flow. People/governments cling to what is the past/stable before realizing that the future requires something new/usually opposite of the past.

Click here for Time and Price dated December 15, 2013.

It is more WHEN the price is reached rather than the express actual number. BOTH have to be achieved.

Click here for the Yuan and the Death of the Dollar. Good one! dated December 15, 2013.

True, eventually all systems fail. The United States will break apart
and will crumble as a political union. That is certain. However, the
question is WHEN? Trust me. Not on this economic wave. That will manifest ONLY when the debt goes. That will happen ONLY
after the financial implosion unfolds in Europe and Japan. Then this
economic disease will spread like a contagion to the US economy.

Click here for How Lows Are Made dated December 15, 2013.

Click here for US Prohibts Production of Physical Bitcoins dated December 17, 2013.

I have stated before that the government was allowing Bitcoin to open
the door for the coming virtual digital money. Of course, they will shut
down Bitcoin once it has served its purpose.

Click here for the DOW To Be or Not To Be-Blowing Bubbles or Hot Air? dated December 11, 2013. Martin talks about international capital flows. This is a good one.

gg says: one thing groovygirl wanted to highlight is his statement that one reason that pension funds are fleeing from bonds to stocks because they must have a 8% return to survive. This statement reinforces the fact that pension funds are dead. Do not count on them. They will either not be able to get 8% plus or they will be forced into too many risky investments that give 8% or more and implode when those investments blow-up in the continuing debt collapse and reset.

Click here for Cyclic Inversions-Criticial to Understand dated December 18, 2013. Very important post!

Once the high was in place., the cycle INVERTS whereas what use to produce highs flips and produces lows. The target dates NEVER change – only what is produced!

gg says: Martin uses an old weekly silver chart as an example of the lesson at a time of the longer term inversion. But it is important to keep in mind that the inversion happens over all charts: daily, weekly, monthly, yearly. It is important to know what time chart you are looking at. A daily chart inversion may or may not affect your investment. A monthly or yearly one may have more of an impact. It depends on how long your personal investment cycle is. Groovygirl is a long-term investor, so she will usually point out and refer to longer term inversions and impact event.

GEAB N 80 is available!

The European-based GEAB N 80 report is available. An extensive free summary is available here.

Quick highlights:

Whether it be the economic or political woes of the United States, Japan
and the European Union, the Russian diplomatic victories over Syria,
Armenia or the Ukraine, or Chinese ambitions in the East China Sea,
tomorrow’s powers are quickly filling the geopolitical void left by
yesterday’s powers.

But 2014 will experience a dramatic acceleration of this profound
trend thanks to the convergence of several factors: loss of control of
the world by the United States, the end of desperate rescue methods
(mainly quantitative easing), a new implosion of the real estate
market… Not forgetting the groundswell which is the forced reform of
the international monetary system. Using roulette is an example, until
recently there has been the phase “place your bets” during which the
players have been able to prepare and implement their strategies; we are
now rather in the phase “no more bets” where the players will soon be
able to see their profits-or losses.

December 16, 2013

2014

Click here for the zerohedge post about 2014 predictions that is making the rounds. Good info.

One thing that groovygirl would like to point out is that the debt implosion and currency reset and resulting depression is going on right now. Sometimes predictors use the future tense, these guys in the link above are better than most. We really should be using the present continuous tense (I am buying) as all these events are part of a larger shift process. Unfortunately, in English we do not have a sub tense, as some other languages do, that distinguish from a “being state” and a shorter term process state vs longer term process state. We must get that from the context. And if we misunderstand the context or it is unclear, we miss part of the message.

For example: I am buying gold. That could mean that I am buying gold continuously forever. It could mean I am buying gold in a present one time process sense (one purchase) and will stop that process in an hour, day, week, or year. Or it could mean something in between those two points.

groovygirl’s point is that we are currently in a global Depression, currency crisis, and debt implosion that is continuing into the foreseeable future. If you are not prepared for this Depression, you can get prepared now. But it will become harder and harder as the process goes on. (So start now, if you haven’t, and education is the first step.) And at some point in the future we will move out a depression and on to the next economic cycle.

When predictors say we will have another economic breakdown, people sometimes think they can wait to prepare or look for another sign post. Get ready now as best you can and continue to do so. This is a process of breakdown and reset, not a one-time event.

We are resetting now and continuing into the future.

Not we will have a reset. The reset started in 2001 or 2007, depending on who you read, and will continue into the future.

It is a paradigm shift on every level of global society and culture. It requires your continuous attention. Once you get it, you will see it automatically, get educated, and not fear. It is just a shift, we have had many others in the past that society lived through.

A reset in:

  • Economy: from dollar dominated global currency to something else. This is affecting all costs, prices, and profit margins, asset prices. Up and down. Debt implosion that is causing capital to hide or be lost. Reaction from government is money printing and higher taxes
  • Employment: going from employee jobs to a contract, consulting,  entrepreneurship driven “jobs”
  • Savings and retirement: redefining retirement in relation to economic stability to consumption to health care
  • Education: classroom to internet, debt based to cash based, industrial to informational
  • Housing markets: owning to renting
  • Infrastructure: new and improved to breakdown and lack of proper maintenance
  • Government and current institutions: central to decentralized
  • Wealth transfer: middle class to upper class
  • Debt based to more cash based economy, business, and investments
  • Peace to war

Short list: I am sure you can think of many others. And there will be many others that will be unforseen consequences of the breakdown reset and the reactions to it and the attempts to control it.

November 4, 2013

Martin Armstrong’s Global Market Watch November 2, 2013

Filed under: Economic Confidence Model Cycle, Global Debt, Martin Armstrong, The Financial Crisis — totallygroovygirlfriday @ 9:48 am

Martin Armstrong has released several global market reports. Be sure to read the How to Use The Global Market Watch to understand the charts.

http://armstrongeconomics.com/2013/11/02/global-market-watch-nov-2nd-2013/

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