Vero Beach, Florida,
February 4, 2016 (Newswire.com) -
Fraser Allport, Owner of Safe and Smart Money, LLC, a
Registered Investment Advisory Firm, has released his latest Executive Summary; 12 Headwinds Facing the U.S Stock Markets in 2016. First penned by Mr. Allport on January 3, 2016, detailing 10 Headwinds, this updated Executive Summary details 12 alarming global market trends happening right now that are buffeting the U.S and Global Stock Markets. The Executive Summary focuses on Oil, China, and Too Much Bad Debt as the three big drivers of the recent global stock market declines. Falling Markets eventually affect consumer confidence and spending. It’s called
“ The Wealth Effect ”. Losing Money in the markets makes people feel poor, so they then curtail spending. In Deflation, everything cascades down. The Bad News gets worse, and things pick up speed on the way downhill. Trillions of dollars of global wealth have already evaporated from the global financial system in a brutal start to 2016. This Deflationary Bear Market is just getting started. Oil, China, and Bad Debt are leading the way down.
Energy comprises approximately 25% of the S&P 500 earnings. That’s a big drag on the S&P. The price of Oil is down more than 70% in less than 18 months. Falling oil and gas prices may initially seem like Good News for the Consumer, but the worldwide Oil industry is facing economic hardship that is causing lay-offs and bankruptcies. Bank loans to Energy Companies are also in trouble. Entire communities and countries built around the oil business are watching their incomes plunge. Unemployed and poor people have no money to buy anything from you. Then the Economy suffers, and stocks follow downhill. Falling oil prices are causing a lot of people to lose a lot of money, in a lot of countries. That's not good news for the global economy and markets. Just imagine that your paycheck goes down 70% in 18 months. The decline in Oil prices is wreaking havoc on the global financial system, causing major losses for individuals, companies, and countries all around the world. Oil runs the world. And Oil is running the world into the ground.
The Executive Summery also highlights the China Syndrome as another major factor negatively affecting U.S. and global stock markets. China is approximately 25% of global growth and the world’s second largest economy. The bursting of China’s Bubble in Real Estate and Stock speculation is creating negative ripple effects across the global economy. The U.S. stock markets do not exist in a vacuum. It is an inter-connected world in the 21st Century, and all markets have become global markets. Like Oil, China is taking the world down with it. Bad Debt is worsening and accelerating the decline. Look at charts of the world’s Junk Bond Markets, and the trend is down.
Going forward, the biggest Global Deflationary Macro-Trend will be the liquidation of all of the world’s Bad Debt. The total amount of Global Debt is dragging down the Global Economy. Trillions upon trillions of bad debt around the world have to be liquidated before this Deflationary Cycle can end. That’s why Deflation happens, and what it does: Too much Bad Debt, and time to clean house. The chickens finally come home to roost. Throughout History, Deflation has not been kind to Stocks. Historically, Deflation augurs for years of asset price declines.
“The global macro trend of deflation is unfolding, right now, under your feet. Like an ill wind blowing around the globe, deflation is slowly enveloping the world’s monetary system and markets in a vise grip, ” explains Fraser Allport. “ Deflation takes years to build to a point where The Bubble Bursts, and then years of debt liquidation to do its cleansing of the system. Historically, global deflation is painfully simple: Deflation means a multi-year decline in asset prices until all of the world’s bad debt is liquidated. So “ Buy and Hold ” does not work in a Bear Market. In a Bear Market, Buy and Hold is financial suicide. Every time that you buy more, you lose more, as the markets continue to decline. Buying more in a Bear Market is called ‘ The Slope of Hope ‘. Buying more on the way down is like throwing good money after bad. In the end, you will go down with the ship.”
For a more in-depth look at all 12 of these ominous global macro-trends, read Fraser Allport’s Executive Summary, titled: The 12 Headwinds Facing the U.S Stock Markets in 2016. This Executive Summary is available for complimentary download at SafeandSmartMoney.com.
About Fraser Allport
Known as “The Total Advisor”™ to his Clients nationwide, Fraser Allport specializes in Retirement and Estate Planning, Income Tax Reduction, Business and Succession Planning, Asset Protection, and Charitable Planned Giving. Mr. Allport also advises his Clients on the global markets including stocks, bonds, interest rates, precious metals, oil and energy, commodities, and currencies. To help his Clients understand, anticipate, and navigate the global markets, Fraser uses a combination of Economic History, Technical Analysis, and Current Events as his analytical model.
For more information, and to hear Fraser’s archived Radio Shows, please visit: FraserAllport.com.
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