Posts Tagged ‘market myths’

Market Myths Exposed: Inflation Is Not A Threat, Deflation Is

Market Myths Exposed: Inflation Is Not A Threat, Deflation Is 
Our free eBook reveals the 10 most common financial misconceptions 

Dragon breathing fire

By Nico Isaac, at Elliott Wave International 

Most people are confident they can recognize a myth when they hear one: Wearing a hat causes baldness; eating a bunch of carrots gives you perfect vision; ‘light’ cigarettes are better for your health than the regular kind.

But what about this sentence: Inflation is the number one threat to the US economy? Ask the mainstream experts, and this statement is in no way a fabrication of the truth; it is truth itself. Case in point, this recent insight from a reputable news source:

"Given the extraordinary amounts of government spending, we believe inflation is likely to rear its ugly head." (CNBC)

It looks reliable. It sounds reliable. But the reality is different. That fact is the subject of Chapter Three in Club EWI’s free educational eBook Market Myths Exposed, aptly titled "Myth No. 3: Worry About Inflation Rather Than Deflation."

With groundbreaking insight from EWI’s president Bob Prechter, this chapter reveals how the most vital financial players have been led right up to the water of easy money. Yet, like the saying goes, no amount of incentive — be it record low interest rates or trillions of dollars in federal bailouts — has gotten them to "drink." Here, the "Market Myths" chapter sheds light on this global leverage fast:

  • Banks: The premier dispensers of credit are about "95% invested in mortgages," which can fall in dollar value at the start of a crisis. Also, a chart of Credit Standards At All Banks since 1997 reveals a new trend of tighter lending criterion. Both are deflationary.
  • Consumers: The premier devourers of credit are paying off their balances. See: chart of Total Consumer Credit (Annual Rate of Change) since 2000. This is deflationary.
  • Private Equity: "Of the ten largest leveraged buyout deals since 2007, four have defaulted and two are in distress. Just in this small group, there is nearly one-half a trillion dollars worth of loans headed for the dump."
  • Small Businesses are self-liquidating; meaning, they create profits to pay back loans versus consumers. YET, "Market Myths" Chart of Bank Loan Availability to these small Enterprises contains a big, black arrow

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Individual Investors Have Jumped Into Another Fire

Individual Investors Have Jumped Into Another Fire

By Robert Prechter

[The following article is an excerpt from Robert Prechter's Elliott Wave Theorist.]

Moscow’s apartment building fire under control

First they bought into the “stocks for the long run” case and got killed. Then they jumped on the commodity bandwagon and got killed. Many investors are buying back into these very same markets, but others are running to what they perceive as safe “yields” in the municipal bond market. So far this year, individual investors have “poured a record $55 billion” (Bloomberg, 11/12) into muni bond funds, with the pace running $2b. per week in August and September; many other investors are buying munis outright. These must be the people who tell us that they can’t live without “yield” and also cannot imagine their city, county or state government going bust. But as Conquer the Crash warned and as The Elliott Wave Theorist has reiterated, the muni bond market is heading for disaster.

Municipalities have borrowed more than they can repay, they have pension liabilities that they cannot meet (up to a trillion dollars’ worth, according to Moody’s), and tax receipts are falling. The only reason that states haven’t failed yet is the so-called “stimulus package,” which took money from savers, investors and taxpayers—thereby impoverishing the people who live in the various states—and gave it to state governments to spend so they would not have to cease their profligate spending. But political pressures will eventually cut off this gravy train. In the 2010-2017 period, the muni bond market will become awash in defaults. The leap in optimism since March, which has shown up in every financial market, has fueled a retreat in muni bond yields to their lowest level since 1967 and narrowed the spread between muni bond yields and Treasuries.

This rush to buy municipal bonds is occurring right on the cusp of a dramatic decline in their values. While many individuals are loading up right at the peak so they can participate in the next major market disaster, smarter investors, such as insurance companies Allstate and Guardian Life, are getting out. Our recommendation for investors is 100 percent safety, and such a program does not include muni bonds.


This is a message and free e-book offer from Elliott Wave International:

You’ve no doubt heard the old mantras "stocks for the long haul," "diversify," "buy and hold."…
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U.S. Commerce Secretary Wilbur Ross Speaks With CNBC's "Power Lunch" Today

By VW Staff. Originally published at ValueWalk.

WHEN: Today, Thursday, March 22, 2018

WHERE: CNBC’s “Power Lunch”

Following is the unofficial transcript of a FIRST ON CNBC interview with U.S. Commerce Secretary Wilbur Ross on CNBC’s “Power Lunch” (M-F 1PM – 3PM) today, Thursday, March 22nd. Following are links to video from the interview on

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Psychographics: the behavioural analysis that helped Cambridge Analytica know voters' minds


Psychographics: the behavioural analysis that helped Cambridge Analytica know voters' minds

Making connections through tracking behaviour. GarryKillian/Shutterstock

Courtesy of Michael Wade, IMD Business School

The dealings that have been revealed between Cambridge Analytica and Facebook have all the trappings of a Hollywood thriller: a Bond villain-style CEO, a reclusive billionaire, a naïve and conflicted whistle-blower, a hipster data scientist turned politico, an academic with seemingly questionable ethics, and of course a triumphant president and his influential family.

Much of the discussion has been on how Cambridge Analytica was able to obtain data on m...

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Zero Hedge

Funding Stress Contagion Spreads - European Banks Collapse To 11-Month Lows

Courtesy of ZeroHedge. View original post here.

Yesterday we exposed the globally contagious spread of funding market distress into the credit risk of major US banks, and today it has accelerated, spreading to Europe's banks as their stocks crashed to the lowest in 11 months...

Deutsche Bank is leading European banking's collapse...


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Insider Scoop

5 Biggest Price Target Changes For Thursday

Courtesy of Benzinga.

  • KeyBanc raised the price target for Shopify Inc. (NYSE: SHOP) from $150 to $170. Shopify shares closed at $149.40 on Wednesday.
  • Stifel Nicolaus lowered the price target for Facebook, Inc. (NASDAQ: FB) from $195 to $168. Facebook shares closed at $169.39 on Wednesday.
  • Cowen raised Ralph Lauren Corporation (NYSE: RL) price target from $110 to $122. Ralph Lauren shares closed at $109.47 on Wednesday.
  • Stifel Nicolaus boosted Blackbaud, Inc. (NASDAQ: ... more from Insider

Digital Currencies

Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money


Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money


Courtesy of Anwar Halari, The Open University

If you haven’t already heard of Bitcoin, you either haven’t been paying attention or you’re a time traveller who just touched down in 2018. Because by now, most of us will have heard of Bitcoin and some of us have even jumped on the bandwagon, investing in cryptocurrencies.

But despite its popularity, many people still don’t understand the technology that underlines it: blockchain. In...

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Chart School

Stall in Decline

Courtesy of Declan.

The good news for bulls was the lack of follow through on the selling. An argument could be made for bullish harami doji in some key indices with stops on a loss of yesterday's lows.

The Semiconductor Index held on to breakout support in what looked to be a successful defense by traders in what could still be a pullback buying opportunity. There was a MACD trigger 'sell' which was a follow-through from Friday - leaving only stochastics in the green. However, relative performance remains in bulls favor. Long opportunities...

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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)


"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...

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How your brain is wired to just say 'yes' to opioids

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.


How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida


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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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NewsWare: Watch Today's Webinar!


We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.


EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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