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Are The Financial Markets Approaching Their Breakpoint?

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There are some, especially in eastern cultures, who believe that we actually already have access to all information. And that it’s the thinking mind that often drowns out our true natural intuition and guidance.

Convincing you of whether that is true or not is not the purpose of this article. But after 11 years on Wall Street and in the past 6 years since, I have found it incredibly helpful to focus more on developing my intuition, and allowing the analytical skills to support what the gut is saying.

So with that said, thoughts presented in today’s article are not necessarily what I can prove. But more so what comes to mind when I take a deep breath and allow my subconscious to process everything I’ve seen, heard, read, and studied.

With that said, it continues to feel to me that there is much going on in the markets and behind the political scenes that the public is not being told about. Similar to how there were clear signs of stress in the markets in 2007 and throughout 2008. Well before Lehman Brothers failed.

Now there are similar signs appearing in the markets that indicate a similar resolution this time around as well. And while we have not reached the breakpoint yet, on a personal level I’m getting a lot closer to placing some of the trades that I have planned for years, with the hopes of putting them on shortly before the markets are significantly re-priced.

The Deutsche Bank situation in particular is interesting. Because after some conversations with experts in the derivatives market, I tend to get the feeling that things are spiraling out of the bank’s control. And that likely even Deutsche Bank probably doesn’t know it’s true derivative exposure.

Meanwhile Russia has sold half of their treasuries, China continues to do everything to implement trading infrastructure that no longer requires dollar involvement, all while the U.S. government is focused on launching trade wars with its largest creditors.

And while the Federal Reserve still claims that all is well and that it plans to continue raising interest rates, it also recently announced that some of the banks were unable to pass a stress test. Which essentially means the Fed is saying that the economy is great as long as the banks are in good shape. But that it realizes the banks aren’t in good shape.

As a result, I’m getting a lot closer to initiating some new trading positions in response. I’m considering buying puts on French Bank BNP Paribas, a large owner of Italian debt that I believe would be severely impacted whenever current market conditions reach a head.

Shorting homebuilders or other real estate related assets is also something I am getting closer to doing. Because similar to what we saw happen in the real estate market a decade ago, I continue to expect similar distress in the real estate market this time as well. Possibly even more extreme than what was witnessed in 2007-2008.

The key question over the past decade, at least in my mind, has never been how this current situation is going to unfold. But rather “when”.

Certainly for those who invested in gold and silver, or more recently in the cryptocurrencies, there have been periods of waiting that have required patience and fortitude to maintain your positions.

Yet while I am still unable to point to a specific date yet, the events that continue to unfold, as well as what my intuition tells me, leads me to believe that the second half of 2018 will be quite different from what we’ve seen the past few years. With the time to prepare accordingly possibly running out quickly.

 

-Chris Marcus

July 2, 2018

 

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