Thursday, April 30, 2015

Don’t be stupid. Don’t believe Wall Street.......... Don’t Let Them Screw You Again.


There are three financial hurricanes hurtling towards our country and most people are oblivious to the coming catastrophe. The time to prepare is now, not when the hurricane warnings are issued.

Stocks and bonds are as overvalued as they have ever been in the history of investing. People are under the false impression that bonds are always a safe investment. The fact that you are already getting a negative real return on bonds doesn't seem to compute with math challenged Americans. Over the next ten years you will absolutely lose money in bonds.

Liquidity in both the stock and bond markets is thinning considerably. In bonds, quantitative easing by global central banks has resulted in a scarcity of available collateral, a collapse in repo liquidity, and increasing frequency of delivery failures, all of which is shorthand for a bond market that is becoming less liquid and more fragile to any credit event. 

Meanwhile, risk premiums are minuscule. Avoiding a negative total return on 10-year bonds now requires that interest rates must not rise by even one percentage point over the next three years. Bond yields have historically covered investors against a meaningful change in yields before resulting in negative total returns. On a one-year return horizon, bond yields presently cover investors for a yield change amounting to only about 0.25 standard deviations – matching mid-2012 as the lowest level of yield coverage in history.

The fragility of the economic, financial, and social systems of the U.S. is at extreme levels. The median American household has less real income than they had in 1989. The social fabric of the country is tearing as we speak, with Baltimore and Ferguson as the warning shots of coming chaos and civil strife. The ruling elite control the monetary system, so the rigged financial markets continue to rise and have reached bubble proportions. An unexpected pin will be along shortly to pop the bubble. The next crash will make 2008 look like a walk in the park. It may be decades until markets reach these levels again.

Market crashes always reflect two features: extremely thin risk premiums in an environment where investors have shifted toward greater risk-aversion, and lopsided selling into an illiquid market. Under present conditions, we observe the precursors for both. That doesn't force or ensure a crash, but it creates the underlying fragility that allows one.

Last week, the Nasdaq Composite finally clawed its way to breakeven, 15 years after its spectacular bubble peak in 2000. It's a testament to the overvaluation of technology stocks in 2000 that it has required the third equity bubble in 15 years to reclaim that 2000 high, at least briefly. As you may remember, the Nasdaq Composite reached its intra-day high of 5132.52 in March 2000, plunging to 795.25 (down -78%) by October 2002.

The Nasdaq 100, representing the most glamourous of the group, peaked at 4816.25 in March 2000, plunging to 795.25 (down 83%) by October 2002. Even a decade later, in 2010, both indices were still 60-65% below their 2000 highs. The 2000-2002 decline also took the S&P 500 down by half, wiping out the entire total return of the S&P 500 – in excess of Treasury bill returns – all the way back to May 1996.

The S&P 500 presently teeters near its all-time high at 2,115. Its fair value, based upon multiple historically accurate valuation models is 940. 

Therefore, this market would have to drop 56% to reach fair value. In the real world, crashes often exceed fair value to the downside. Is there anyone you know prepared for a 50% to 60% decline in the stock market?

On the basis of valuation measures best correlated with actual subsequent market returns, we can say with a strong degree of confidence that the S&P 500 would presently have to drop to the 940 level in order for investors to expect a historically normal 10-year total return of 10% annually. That 940 figure for the S&P 500 would not represent some extreme, catastrophic outcome. It's not a level that would even represent undervaluation from a historical perspective. It's the level that we would associate with average, historically run-of-the-mill long-term equity returns. As we observed at the 2000 peak, "if you understand values and market history, you know we're not joking."

We all know bubbles can grow to epic proportions based on delusion, hope, and lies. 

The numbers speak for themselves. There is no new paradigm. The Fed is not infallible. The economy is already in recession. Corporate revenues and profits are falling. The consumer isn't consuming. The market is being elevated by nothing but Wall Street hot air and HFT computers. This time is not different.

To fully understand the present valuation extreme, recognize that the market cap/GDP ratio is currently about 1.29 versus a pre-bubble norm of just 0.55, with "secular" lows such as 1982 taking the ratio to about 0.33. To fully understand the present valuation extreme, recognize that the S&P 500 price/revenue ratio is currently about 1.80, versus a pre-bubble norm of just 0.8, with "secular" lows taking the ratio to about 0.45."

As for other investors, the worst mistake they made prior to the 2000-2002 collapse was to believe Wall Street's claims that stocks were not in a bubble, and that this time was different. The worst mistake that other investors made prior to the 2007-2009 collapse was to believe Wall Street's claims that stocks were not in a bubble, and that this time was different. The worst mistake that other investors are making today is to believe Wall Street's claims that stocks are not in a bubble, and that this time is different.

Even brilliant investors can lose their nerve and capitulate to the trend and to peer pressure. Don't be stupid. Don't believe Wall Street. Don't let them screw you again. Get your money out of the market.

Last month, Stan Druckenmiller recounted his own experience with capitulation and performance chasing when he was the lead portfolio manager for George Soros and the Quantum Fund:

"I'll never forget it. January of 2000 I go into Soros' office and I say I'm selling all the tech stocks, selling everything. This is crazy… Just kind of as I explained earlier, we're going to step aside, wait for the next fat pitch. I didn't fire the two gun slingers. They didn't have enough money to really hurt the fund, but they started making 3 percent a day, and I'm out. It's driving me nuts. I mean, their little account is like up 50% on the year. I think Quantum was up seven. It's just sitting there.

"So like around March I could feel it coming. I just – I had to play. I couldn't help myself. And three times during the same week I pick up a – don't do it. Don't do it. Anyway, I pick up the phone finally. I think I missed the top by an hour. I bought $6 billion worth of tech stocks, and in six weeks I had left Soros and I had lost $3 billion in that one play. You ask me what I learned. I didn't learn anything. I already knew I wasn't supposed to do that. I was just an emotional basket case and couldn't help myself. So maybe I learned not to do it again, but I already knew that."

Despite home ownership reaching three decade lows, stagnant real wage growth, and an economy that has never truly come out of the 2008/2009 recession, home prices have somehow risen 30% since 2012. The combination of keeping foreclosures off the market, the Wall Street hedge fund buy and rent scheme, Chinese billionaires parking their ill-gotten gains in US high end houses, FHA, Fannie, and Freddie encouraging low down payment mortgages, and the return of flippers has produced an echo bubble in the housing market. Home prices are only 18% from the 2006 all-time high. This bubble will burst congruently with the stock and bond bubbles. Anyone who has bought a house with a low down payment since 2012 is going to be deeply underwater in the next few years.  

The question now is only about when. It isn't years. It's months, weeks or days.

"The issue is no longer whether the current market resembles those preceding the 1929, 1969-70, 1973-74, and 1987 crashes. The issue is only – are conditions more like October of 1929, or more like April? Like October of 1987, or more like July? If the latter, then over the short term, arrogant imprudence will continue to be mistaken for enlightened genius, while studied restraint will be mistaken for stubborn foolishness. We can't rule out further gains, but those gains will turn bitter… Let's not be shy: regardless of short-term action, we ultimately expect the S&P 500 to fall by more than half, and the Nasdaq by two-thirds. Don't scoff without reviewing history first."

Debt Addiction May Send Us The Way Of The Mayans......DO NOT MISS THIS!

Debt Addiction May Send Us The Way Of The Mayans

Nowadays many countries' social and political structure relies on debt-driven consumption and increasing levels of entitlements.

Blame policy makers. To drive economic growth, boost living standards, and manage growing inequality, policy makers have used debt and monetary tools to create economic activity. This has resulted in excessive borrowing and imbalances in global trade and capital.

Governments played a part, too, allowing the buildup of social entitlements to win or maintain office. Private companies also encouraged the growth of employee benefits to avoid immediate pressure on wages as well as boost current earnings and share prices.

But such expensive commitments were rarely fully funded.

Rather than deal with the fundamental issues, policy makers substituted public spending, financed by government debt or central banks, to boost demand. Strong growth and higher inflation, they hoped or believed, would correct the problems.

The current state of affairs echoes Archaeologist Arthur Demarest's observation about the Mayan civilization: "Society had evolved too many elites, all demanding exotic baubles…all needed quetzal feathers, jade, obsidian, fine chert, and animal furs. Nobility is expensive, non-productive and parasitic, siphoning away too much of society's energy to satisfy its frivolous cravings."

Seven years into this crisis, the level of debt in major economies has increased. Global imbalances have decreased, but primarily as a result of slower economic growth. Countries such as China and Germany are reluctant to inflate their domestic economies, moving away from their export-driven model. Major borrowers, such as the U.S., refuse to reduce spending and bring their public finances into order. Enthusiasm for fundamental financial reform has dissipated, driven by concern that lower credit growth will decrease economic growth.

Policy makers refused to acknowledge that available fiscal and monetary policy tools cannot address the underlying problems. 

They repeatedly use complex jargon, obscure mathematics and tired ideologies to disguise their failures and limitations. 

Perhaps, as the writer G. K. Chesterton suggested: "It isn't that they can't see the solution. It is that they can't see the problem."

The policies, now centered around debt monetization entailing zero interest-rates and quantitative easing (QE), have potentially destructive side effects.

Punishing frugality and thrift, and rewarding borrowing, profligacy, excess, and waste.

The resultant loss of purchasing power effectively represents a tax on holders of money and sovereign debt. It redistributes real resources from savers to borrowers and the issuer of the currency, resulting in diminution of wealth over time.

Debt monetization also creates moral hazards. Low rates and easy availability of credit reduces market discipline. Borrowers face less pressure to cut back on their debts. Low borrowing costs allow unproductive investment to be maintained. It reduces incentives for governments to bring public finances under control.

Ultimately, the policies being used to manage the debt crisis punish frugality and thrift, and reward borrowing, profligacy, excess, and waste.

The policies might have been defensible if successful. But evidence to date suggests that policy makers are unlikely to succeed. 

The Bank for International Settlements and other central bankers now stress the limits to monetary policy in boosting economic growth without addressing the underlying issues.

Ordinary people fear the consequences on their lives from the Great Unraveling. The political and social response is likely to be volatile. 

It was the fear and disaffection of middle-class citizens who had lost their savings in the Great Depression that gave rise to fascism.

Governments have shown little willingness to inform the electorate about the magnitude of the economic problems, the lack of solutions, and cost of possible corrective actions. Politicians have taken regard of historian Simon Schama's comment that no one ever won an election by telling voters it had come to the end of its "providential allotment of inexhaustible plenty." In a moment of unusual candor, Prime Minister of Luxembourg and Head of the Euro-Group Jean-Claude Junker stated: "We all know what to do, we just don't know how to get re-elected after we have done it."

Precious political and economic capital has been wasted with inadequate policies that have side effects and decrease chances of a recovery. 

For policy makers everywhere, to paraphrase Alexander Solzhenitsyn, the "permanent lie has become the only safe form of existence."

The Informed Minority.....AN ABSOLUTE MUST READ!

The Informed Minority

The cynicism among the informed classes has never been so deep. Even the pompom boys in the cheerleading clubs like CNBS and The Wall Street Journal express wonderment at the levitation of stock indexes and bond values. They chatter about a "correction" of 20 percent being a healthful tonic that would clear away some dross and quickly usher in a new episode of "growth" — or growthiness, which, like truthiness, became an acceptable approximation of the real thing. The truth, as opposed to truthiness, is they no longer believe their own bullshit about growthiness.

The suppression of interest rates and pervasive accounting fraud has thundered through the financial system, and the deformities caused by it have emerged in currency war, currency instability, trade collapse, and political crisis. Years of central bank intervention have stolen the capital of the future to construct a Potemkin economy meant to conceal the sickening gyre of diminishing returns strangling business as usual.

Until it collapses by a great deal more than the wished-for mere 20 percent, more perversities will be piled onto the already existing burden. Is it not a wonder that professionalized interest groups like AARP have not screamed bloody murder over the suppression of interest rates which deprives its members of bank account and bond interest on savings? Instead AARP, like virtually every enterprise in America, has turned to racketeering. Don't worry, they'll be gone from the scene soon enough.

The next shoe to drop will be various forms of bail-ins and attempts to prevent bank account and money market holders from getting access to their cash. A withdrawal above $2,000 already can trigger a report to the IRS. The next step will be to put a simple ceiling on withdrawals. Will that trigger public ire? Who knows? Nothing yet has in the USA. The meme currently circulating is the fear that government would like to abolish cash altogether and put in a regime of all-electronic money. I'm skeptical about this idea, but I really can't dismiss it.

A cashless society would conceptually allow government much more leak-proof control of all citizen money transactions. Mainly it could funnel tax revenue into the treasury much more efficiently. It raises some obvious practical concerns, such as: would such a program lead to an enhanced colossal skim of credit card company off-creaming?  And what about the percentage of poorer Americans who don't have credit cards or bank accounts now, either because they don't understand how it all works, or they're forced to function in the "gray" economy for one reason or another (e.g. a drug felony rap). And what kind of as-yet-unknown perverse work-arounds would this new system provoke?

I put the question to a table of college-educated people last night and their response was surprising: utter complacency. They're already used to paying for most things with plastic, they said, and their employer already withholds a big part of their regular paycheck for taxes, so what does it matter? They couldn't grasp the possibility that a cashless money system might easily deprive them of access to whatever reserves they have. Or perhaps, more specifically, the couldn't imagine an economic or political emergency that might provoke such a situation.

They might find out sooner than they realize. 

Apprehension is growing that some kind of "corrective" event is at hand on the financial scene. 

Even the supposedly salubrious 20 percent S & P drop could set off a chorus of margin calls that would make the trumpets of Jericho sound like a kazoo concert. What will Americans do if they can't get their money out of the banks? The last time this happened, 1933, we were a hard-up but polite and highly-regimented society, and the automatic rifle was a novelty restricted to a relatively tiny army and Al Capone's crew. Behind the financial jitters of the informed minority is the greater fear of social unrest.

Biggest Inventory Build In History Prevents Total Collapse Of The US Economy.....ANOTHER PESKY FACT!

Biggest Inventory Build In History Prevents Total Collapse Of The US Economy


Specifically, the $121.9 billion increase in private, mostly nonfarm, inventories in the first quarter.

If US inventories, already at record high levels, and with the inventory to sales rising to great financial crisis levels, had not grown by $121.9 billion and merely remained flat, US Q1 GDP would not be 0.2%, but would be -2.6%.

Which means that as this massive inventory overhang is eventually cleared out (once the US runs out of space to store all these widgets, gadgets and raw materials, here's looking at you Cushing) and there has been $1.1 trillion in consistent inventory build in the past 3 years, US GDP will be pressured even more with every passing quarter, or else the moment of deflationary rapture when everyone is forced to liquidate and/or dump this inventory at the same time, will result in a monetary supernova which will leave the Fed with no choice but to literally paradrop money on the continental US. THE OH SHIT MOMENT THIS TIME IS GOING TO BE A REAL WHOPPER! LOT'S OF EMPTY COMMERCIAL REAL ESTATE IN OUR FUTURE.

Cutting to the punchline, this was the biggest inventory build in history.

In Q1 2015, the US economy rose by a paltry $6.3 billion in nominal terms to $17.710 trillion.

Here is how the total GDP growth compares to just the increase in inventories, which is the primary reason why the world is now gripped in a global deflationary wave.

The Great US Dollar Unwind Begins?.......ANOTHER PESKY FACT!

The Great US Dollar Unwind Begins?

The last 4 days have seen the 2nd biggest drop in US Dollar in 6 years. This has very significant consequences. If USD strength is indicative of US economic strength... what does a plunging USD imply?



Wednesday, April 29, 2015

US Economy Grinds To A Halt......ANOTHER PESKY FACT!

US Economy Grinds To A Halt

Q1 GDP Tumbles Below Expectations

 The BEA reported that Q1 GDP was far worse than almost everyone had expected, and tumbled from a 2.2% annualized growth rate at the end of 2014 to just 0.2%, in a rerun of last year when it too "snowed" in the winter.  This was well below the Wall Street consensus of a print above 1.0%.

Bankruptcies Soar Across Corporate America........ANOTHER PESKY FACT!

Bankruptcies Soar Across Corporate America

Worst First Quarter Since 2009, many more are coming.

In the first quarter, 26 publicly traded corporations filed for bankruptcy, up from 11 at the same time last year, according to data from Six of these companies listed assets of over $1 billion, the most since Financial-Crisis year 2009. In total, they listed $34 billion in assets, the second highest for a first quarter since before the financial crisis, behind only the record $102 billion in 2009.

This isn't the list of a single troubled sector that ran out of luck. This isn't a single issue. It's a broader phenomenon: too much debt across a struggling economy. And now the reckoning has started.

U.S. Homeownership Rate Drops To Quarter-Century Low.....ANOTHER PESKY FACT!

U.S. Homeownership Rate Drops To Quarter-Century Low

The latest sign of a changing housing market, homeownership rates are at a quarter-century low.

Japan Proves Monetary Policy Is Nothing But Destructive......ANOTHER PESKY FACT!

Japan Proves Monetary Policy Is Nothing But Destructive

The Japanese people are becoming poorer by the day.

ABOOK April 2015 Japan Hours Worked
ABOOK April 2015 Japan Real Wages

Japan Retail Sales Plunge Most Ever On Widespread Economic Weakness.....ANOTHER PESKY FACT!

Japan Retail Sales Plunge Most Ever On Widespread Economic Weakness

Here is the latest proof that there is nothing worse for an economy than to be run by a bunch of central planning academics who get "advice" from Paul Krugman. The reason: Japan's retail sales which crashed by 9.7% Y/Y, the biggest annual drop in history. The drop was bigger than what consensus had expected, as expectations were for a -7.3% drop. And confirming that things are getting worse on a sequential basis as well, was the 1.9% drop in sales in March compared to a 0.7% increase in February. In fact, as the chart belows show, on an indexed basis, the March retail sales print was one of the worst since last year's tax hike.



Stefan Edlis was looking at a tax bill of more than $20 million when he sold his Andy Warhol  "Turquoise Marilyn" painting to hedge fund manger Steve Cohen, but ended up paying nothing. 

How did he do it? 

Half of Edlis' earnings were deemed part of his private foundation, meaning they were tax-exempt, and the other $40 million was parlayed into more artwork through a 1031 exchange, or like-kind exchange. According to Bloomberg, such an exchange "allows investors to defer capital gains by buying similar property of equal or greater value," but "sellers must show that the art was purchased as an investment instead of for pleasure."

Tuesday, April 28, 2015

The Baltimore Riots: The Stunning Comments By Orioles Owner's Son....

The Baltimore Riots: The Stunning Comments By Orioles Owner's Son

I agree with your point that the principle of peaceful, non-violent protest and the observance of the rule of law is of utmost importance in any society. MLK, Gandhi, Mandela, and all great opposition leaders throughout history have always preached this precept. Further, it is critical that in any democracy investigation must be completed and due process must be honored before any government or police members are judged responsible.

That said, my greater source of personal concern, outrage and sympathy beyond this particular case is focused neither upon one night's property damage nor upon the acts, but is focused rather upon the past four-decade period during which an American political elite have shipped middle class and working class jobs away from Baltimore and cities and towns around the U.S. to third-world dictatorships like China and others, plunged tens of millions of good hard-working Americans into economic devastation, and then followed that action around the nation by diminishing every American's civil rights protections in order to control an unfairly impoverished population living under an ever-declining standard of living and suffering at the butt end of an ever-more militarized and aggressive surveillance state.

The innocent working families of all backgrounds whose lives and dreams have been cut short by excessive violence, surveillance, and other abuses of the Bill of Rights by government pay the true price, an ultimate price, and one that far exceeds the importance of any kids' game played tonight, or ever, at Camden Yards. We need to keep in mind people are suffering and dying around the U.S., and while we are thankful no one was injured at Camden Yards, there is a far bigger picture for poor Americans in Baltimore and everywhere who don't have jobs and are losing economic civil and legal rights, and this makes inconvenience at a ball game irrelevant in light of the needless suffering government is inflicting upon ordinary Americans."

The Market Is Currently More Overbought Now Than At Any Other Point In History Going Back To 1940....A VERY PESKY FACT!

The Market Is Currently More Overbought Now Than At Any Other Point In History Going Back To 1940

The market has been trapped in a tightening pattern of higher lows and lower highers. This type of action is like the compression of spring. Soon, the markets will have to make an important decision. It is worth noting that this consolidation in the market is happening during a decline of relative strength. This is a warning sign that generally bodes poorly for the bulls based on price action at previous tops.

The vertical dashed white lines in the chart below show that when the extreme overbought condition begins to decline it is coincident with past historical peaks in the market. Furthermore, the long term MACD (moving average convergence divergence) has also turned down which has also historically aligned with more significant market peaks and corrections.



Zero Truth

Washington's propaganda isn't working here or 
in the rest of the world, be it Russia or China or Latin America. In all of these places, Washington's message has more or less failed. This is why the people in Washington are in a bit of a panic, in search of an answer. They can't stop lying, and they can't even pretend to rule the world if everyone knows that they are lying, so their only option is to try to squelch every voice except their own.

At this point if you live in the US, and actually know how the political system operates, and you still think that the US is a democracy, then you DO have a mental problem. You can't have it both ways: either you buy into the official propaganda, or you don't. THERE ARE AN AWFUL LOT OF SCUMBAGS WHO MAKE THEIR LIVING OFF OF,OR WITHIN THE SYSTEM AND THEY WOULD RATHER LIE AND HOPE THE SYSTEM DOES NOT FAIL THAN TELL THE TRUTH AND FIX WHAT IS BROKEN. THESE PEOPLE ARE THE PRIMARY REASON THE NEXT CRISIS MAY BE FATAL! 

The vast majority of people in the US are quite happy listening to Washington's propaganda and so we have zero growth, zero inflation and zero hope. That combination has left the countries of this circumstance in total apathy as zero rates are being interpreted as meaning that no reforms are needed. No inflation means no new margins as well as no new wage bargaining, and zero hope means politics and elections may change the affiliation of countries' leaders, but not their politics and certainly not their vision for the future.

This is the unintended consequence of zero-bound economics 
and the politics of lies!

This new nothingness is creating a youth, a political system and an economic outlook which is based more in peoples' heads and minds than it is in reality.

Everyone, in a sense, wants to be "half-pregnant", wallowing in the idea that "things could be worse" while not dealing with reality.

At a certain point, even central bankers will realize they can go no further.

Expect the Federal Reserve to issue a margin call on asset inflation in June or September, a Grexit, and a much stronger US dollar in a final move where  lack of liquidity and shortage of access to USD funding will create a massive economic crisis.




Puerto Rico Warns Of Imminent Government Shutdown Due To "Liquidity Crisis"

Puerto Rico's top finance officials said the government of the U.S. territory will likely shutdown in three months because of a looming liquidity crisis and warned of a devastating impact on the island's economy.

In a letter to leading lawmakers, including Governor Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances currently looked unlikely to succeed. It warned of laying off government employees and reducing public services

"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."

The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.

Puerto Rico, which has a total debt of more than $70 billion, is trying to raise $2.95 billion in financing, while pushing through unpopular tax reforms such as a higher value-added tax and increasing a levy on crude oil to help pay for it.

Imagine a small room improbably crammed full of elephants. There is only one tiny door by way of an exit. Now fire off a few firecrackers. 

Now imagine you're a distressed seller of an illiquid or very overvalued asset in a market panic, it's worse than being trapped in a crowded theater that's on fire. It's like being trapped in a crowded theater that's on fire, and the only way you can get out is by persuading someone on the outside to swap places with you. 

That's Puerto Rico's problem, the elephants of debt are trampling the delusions of the fools who bought all the lies. At present we are simply waiting for the spark that sets the global economy ablaze. Europe, Japan, China, and the U.S. can't and won't avoid the elephants once the stampede begins.

Facts do not cease to exist because they are ignored.  !!!!

Aldous Huxley

The Bond Market Is A Very Dangerous Place.....ANOTHER PESKY FACT!

The Bond Market Is A Very Dangerous Place

The sort of stuff whose values imploded spectacularly in 2008 included dodgy corporate credit and mortgage backed securities. Given the liquidity dynamics of the institutional marketplace highlighted by Jamie Dimon, the sort of stuff whose values can implode instantaneously today includes the likes of US Treasury securities themselves. So in the fixed income market, all bets are off.

At the recent Grant's Conference in New York, fund manager Paul Singer identified an even bigger short than the original Big Short (repackaged sub-prime tat). This new, even bigger short ?

Long-term claims on paper money. In other words, all bonds.

Is it remotely possible that at some point, perhaps quite soon, the bond market could see yields spike higher, driven by ......

A surge of inflation which far exceeds the strength of the economies is not out of the question and could be catalyzed and accelerated by the oft-stated goal of central bankers to cause more of it.

The bond market is acting schizophrenically. The cognitive dissonance is deafening. It has pushed down the yields of bonds on the tacit understanding that central banks (most recently, the European Central Bank) will be buying them by the bucket-load. 

But the expressed purpose of so-called Quantitative Easing is to ignite inflation. If you believe that central banks can succeed in creating inflation, then you should be selling bonds, not buying them, especially when they're yielding less than zero. We're not convinced that central bank money creation can easily trigger inflation when the forces of deflation seem to be currently so powerful. But it matters not. Anybody with half a brain cell will recognize the risk inherent in bond markets today. 

The only people who should be buying bonds today are billionaire altruist lunatics with a death wish.

Gasoline Waiting For A Match.....A VERY PESKY FACT!

Gasoline Waiting For A Match

Along with the markets currently being more overbought now than at any other point in history, they are also more leveraged as well.

Late last week the NYSE released its latest margin debt figures for March. Despite a rather sluggish market, investors piled on margin debt pushing levels to all-time highs as shown below.

It is worth noting that when net credit balances have plunged these very negative levels before, it has been coincident with major mean reverting events in the market.

While "this time could certainly be different," the reality is that leverage of this magnitude is "gasoline waiting on a match." When an event eventually occurs, that creates a rush to sell in the markets, the decline in prices will reach a point that triggers an initial round of margin calls. Since margin debt is a function of the value of the underlying "collateral," the forced sale of assets will reduce the value of the collateral triggering further margin calls. Those margin calls will trigger more selling forcing more margin calls, so forth and so on.

Notice in the chart below that margin debt reductions begins innocently enough before accelerating sharply to the downside.




The U.S. economic growth rate has been trending lower since 1950. The current growth cycle, as illustrated in the chart below, reflects further deterioration of this trend as today's economic growth rate is merely peaking at levels that were previously deemed recessionary (compare current growth rates with prior troughs in growth). This is troubling when one considers the unprecedented lengths to which the Federal Reserve (Fed) has gone to reverse this trend. 

It is not by any measure unfair to say that the monetary policy approach taken since the great recession introduces serious doubts about the efficacy of the central banks actions and leaves a lot of unanswered questions about the ultimate consequences of their actions.

If the expectation of "resilient" trend growth is a fallacy and interest rates continue to send signals confirming that notion as they have throughout this secular period, investor concerns should be heightened. 
The level and term structure of interest rates are not confirming the broad logic behind equity market valuations, they damn that logic. The same equation using low interest rates as a discount factor should also properly consider weaker earnings cash flows implied by that very same discount rate. 

The conclusion we draw is that the selective application of low interest rates as a key driver of currently high equity valuations is the same input that will drive equities lower revealing a risk hidden in plain sight.

"It is not the beauty of a building you should look at; it's the construction of the foundation that will stand the test of time."

David Allan Coe


Margin Debt

Margin debt reflects the "animal spirits" of speculation and confidence. When borrowed money is used to buy more stocks, it makes the resulting rise vulnerable to a decline that forces recent buyers to liquidate their positions to cover their margin calls.

Margin debt has reached new highs; what happened when margin debt hit these levels in prior cycles?

Monday, April 27, 2015


Baltimore Is Burning 

State Of Emergency Declared, National Guard Activated, Curfew In Place As Mob Attacks Cops, Loot & Torch Stores


The situation is escalating quickly in Baltimore after police said they received "credible" threats from street gangs who have promised to ban together to "take out" cops in the wake of protests surrounding the funeral of Freddie Gray who died after suffering a spinal injury while being taken into custody by authorities.

Now, the SWAT team has been called out to confront protesters.

Dismal Durable Goods Data.......ANOTHER PESKY FACT!

Dismal Durable Goods Data

Durable Goods orders excluding transportation were down -0.2%, the 6th drop in a row which hasn't happened since recession. COMPARE WHERE WE ARE NOW TO THE LAST CRISIS PERIOD

The sell-side is waking up to the possibility that it's not just the weather...

The Growing Disconnect In The Stock Market ......ANOTHER PESKY FACT!

The Growing Disconnect In The Stock Market

There's a huge disconnect in the US stock market right now.

A new Bank of America Merrill Lynch survey published Friday finds that US investors have pulled $79B out of equities year to date — including net outflows in 9 of the past 10 weeks — despite stock prices continuing to break new record highs.



JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn't want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a "balance sheet utilization fee" of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he's about 20 percent of the way there so far.

Pause for a second and marvel at how strange this is. UNDERSTATEMENT!  !!!!

Banks have always paid interest to depositors. We've entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick Bunker, a policy analyst at the Washington Center for Equitable Growth, was so dazzled by interest rates' falling into negative territory that he headlined his analysis after a Doors song, Break on Through (to the Other Side).

Like chemotherapy, negative interest rates are a harsh medicine. It's disorienting when people are paid to borrow and charged to save. Over time, market disequilibria are dangerous. !!!!

This Week Is The Market's Seven-And-A-Half Year Itch Anniversary....A FEW IMPORTANT CHARTS!

This Week Is The Market's Seven-And-A-Half Year Itch Anniversary

We have extended an almost-perfect Fibonnaci 61.8% off the last high-to-low swing...

The S&P has recovered its inflation-adjusted peak...

And The Nasdaq has recovered its bubble highs...

Sunday, April 26, 2015



Jesus looked at them and said, "With man this is impossible, but with God all things are possible."

Matthew 19:26

We are all going through the battle of our life. No one is exempt from the sufferings of this world. Whatever you are facing, there is always hope when you belong to Christ. This world is perishing and yet those who belong to Christ shall never be destroyed.

You Always 
have hope no matter what you are facing if you know God.

The biblical definition of hope is not a hope-so but a know-so. Our hope in God is surer than the sun rising in the morning.

When a person reads the Word of God they can know for certain that they have a secure and certain future for God will never allow us to suffer beyond our own capabilities to handle it. 

There is nothing on this earth more certain than hope in God.  

He will never leave us nor will He ever forsake us. He is our anchor in the present and for the future.

Redemptive Hope

Put your hope in the LORD, for with the LORD is unfailing love and with him is full redemption. 

                      Psalm 130:7

If you are a believer you can rest assured that God's love is unfailing and He will deliver us in the days of calamity. He has rescued sinners 
from certain judgment and promised us an eternal home with Him. Instead of using ink, God has signed this redemption with Jesus' own blood which seals you permanently. When our hope is in the Lord and not in earthly thingsor in ourselves, it is a rock solid hope.

Gift of Hope

For you have given me hope. 

                                         Psalm 119:49
We know that there is always hope when we trust in God for He has given us His Holy Spirit to seal us,as we read in Ephesians 1:13, "And you also were included in Christ when you heard the word of truth, the gospel of your salvation. Having believed, you were marked in him with a seal, the promised Holy Spirit."

Future Hope

For I know the plans I have for you, declares the LORD, plans to prosper you and not to harm you, plans to give you hope and a future.  

                                                                                             Jeremiah 29:11

God has plans for you. You can bank on that. His plans are not intended to harm you but to prosper you. Now this does not mean that He plans to make you rich but He does plan for you to have a secure future. God says that He has plans for you and He knows them even if we do not. Your stockbroker or financial adviser might have plans for you too, but they do not know the future, they may try to plan for a secure future but they do not have the ability to bring it about. God knows your future and is planning it better than anyone else can.

Unending Hope

Put your hope in the LORD both now and forevermore. 

                                                                                      Psalm 131:3

Hope is for now, it is for today, and it is for tomorrow too. Jesus clearly tells Christians that He will never leave us, never forsake us, and will never, ever cast us away (John 6:37). This promise is for tomorrow morning, next week, and next year. This hope is the believer's hope that covers their entire life. It is without end and will stay with us until Jesus comes for us.

Lovely Hope

The LORD delights in those who fear him, who put their hope in his unfailing love. 

                     Psalm 147:11

I am a father. My children have troubles. They come to me for advice.  I am always offering them hope that all things will work out for their best despite what today may seem like (Romans 8:28). I delight when they come to me with their troubles. So too does the Lord delight when we put our hope in Him and His unfailing love. He wants us to depend upon Him for everything. He delights to give us the desires of our hearts (Psalm 37:4).

Unashamed Hope

No one whose hope is in you will ever be put to shame… 

                                                                                     Psalm 25:3

If we have our hope in the right place, not in ourselves, our jobs, our circumstances, but in God alone, we will never be disappointed. We will never be ashamed for placing our hope in Him because He has the power to deliver us out of all our troubles. We do not posses that power.  God owns the whole earth, He is the owner of the cattle on a thousand hills as Psalm 50:10-11 says, "for every animal of the forest is mine, and the cattle on a thousand hills. I know every bird in the mountains, and the insects in the fields are mine."

Guiding Hope

Guide me in your truth and teach me, for you are God my Savior, and my hope is in you all day long. 

                                      Psalm 25:5

We are finite creatures and can not look beyond today but God has planned every step we take. He guides us and protects us, even in areas where the dark shadows of death seem imminent in the lowest valleys (Psalm 23).  We might plan our own course but God Himself determines where our steps go (Proverbs 16:9).

Courageous Hope

Be strong and take heart, all you who hope in the LORD. 

                                                                                  Psalm 31:24

Christians, can take heart and be courageous because God is our hope. When God is your hope you have a sure thing. When it is in the world, then we are consumed with worry because we don't know what comes next. Those who have hope in God have hope in the only One Who can guarantee our future.

Reverent Hope

But the eyes of the LORD are on those who fear him, on those whose hope is in his unfailing love. 

                                 Psalm 33:18

When we hear the words "fear in the Lord" or "those who fear him" this is not a fear of punishment or retribution. Fear is simply a reverential respect and standing in awe of God. That is what "fear of the Lord" means.  It means that those who reverence God and His name have nothing to fear at all; no evil, no pestilence, no begging for bread, and no fear of want. His unfailing love is upon those that fear or revere Him: His love never fails and His eyes are fixed on you in a permanent gaze that is transfixed upon your today and your tomorrow. You are the apple of His eye (Deuteronomy 32:10, Zechariah 2:8).

Protective Hope

We wait in hope for the LORD; he is our help and our shield. 

                                                                                                Psalm 33:20

Our hope in God is a shiel
d of life. Not only a shield in eternal life but in the present life. He is our help when we need it and our shield when we need protecting. God alone is our help and our shield.

Sovereign Hope

But now, Lord, what do I look for? My hope is in you. 

                                                                                Psalm 39:7 

When we look to ourselves, our employer, our retirement fund, or our inheritance, we can not fully hope with 100% certainty. But what do we look for when our Hope is in God? We know that even our employer's decisions are in God's sovereign hands. Proverbs 21:1 says, "The king's heart is like channels of water in the hand of the LORD; He turns it wherever He wishes." The king thinks he might be in charge, or the boss might think he or she is making their own decision, but in God's sovereignty, they do nothing that is not in God's divine plan for us. They are subject to the Lord's will whether they know it or not.

Praiseworthy Hope

Why are you downcast, O my soul? Why so disturbed within me? Put your hope in God, for I will yet praise him, my Savior and my God. 

                                                                                               Psalm 42:11

Repeated in Psalm 42:5 and Psalm 43:5

Here the Psalmist examines his own heart in asking, Why am I so downcast? Why am I so disturbed? When really he has no reason to be because when hope is in God we have reason to praise our Savior and our God. 

Restful Hope

Find rest, O my soul, in God alone; my hope comes from him. 

                                                                                          Psalm 62:5

I have often times wrestled with tomorrow while I lay down to sleep. The many "what if's" haunt my mind and do not allow me to sleep as I rehearse the day's events and worry about what happens tomorrow if….  But worrying about tomorrow is borrowing trouble from tomorrow and spending it on today. When you realize that tomorrow is already taken care of by God alone and the hope you have in Him, then you can find rest.  It is easier to sleep tonight if you know tomorrow is in God's hands.

Hope In God Bible Verses

If you are feeling hopeless and worried about tomorrow, next week, or even next year read the rest of these verses and have hope in God:

Psalm 65:5   You answer us with awesome deeds of righteousness, O God our Savior, the hope of all the ends of the earth and of the farthest seas

Psalm 69:6   May those who hope in you not be disgraced because of me, O Lord…

Psalm 71:14   But as for me, I will always have hope; I will praise you more and more.

Psalm 71:5   For you have been my hope, O Sovereign LORD, my confidence since my youth.

Psalm 9:18   But the needy will not always be forgotten, nor the hope of the afflicted ever perish.

Romans 12:12   Be joyful in hope, patient in affliction, faithful in prayer.

Job 11:18    You will be secure, because there is hope; you will look about you and take your rest in safety.

Psalm 33:18  But the eyes of the LORD are on those who fear him, on those whose hope is in his unfailing love.

Psalm 33:22  May your unfailing love rest upon us, O LORD, even as we put our hope in you.

Psalm 119:74  May those who fear you rejoice when they see me, for I have put my hope in your word.

For An Eternal 
Future That Is Certain And Full Of Hope....

Decide right here and now, at this very moment, to fix your hope on the rock-solid promises of God and all of these verses can be literally claimed by you. It is a promise from God Himself. Today is the day of salvation (2 Corinthians 6:2).  Here is how you can have a living, breathing hope. 

Do it right now and you have the assurance of hope in God for today, tomorrow, and for all eternity:

I Admit – that I am a sinner and in need of a Savior (Romans 6:23)

I Abandon – self-effort and realize I can not be saved by my works or efforts (Acts 16:31)

I Accept freely Christ's payment for my sins, required of the Father (John 3:16)

I Acknowledge Jesus Christ as my personal Lord and Savior (Acts 4:12)

Turn To Him......

Turn To Him.....    

Take time to talk to your Father in heaven about your problems. Don't try to hide anything from Him. He knows all things, but God cannot heal what you hide from Him, He cannot take away what you do not present to Him. It has to do with your 'free will', He will not override your will.

Hope is earnest expectation of good, a good imagination. Having hope is critical for the promises of God to come to pass in your life. Hope comes before faith, then faith is able to manifest what you hoped for in the natural world. Faith is the substance of things hoped for. Fear is the opposite of faith and is an effective tool of the enemy. Overcome fear by submitting to God. Resist the devil and he will flee from you.

Think about what God has done for you in the past. Meditate on the good things of God. Lift up your hands in prayer and thirst after the Lord. Think back to all the times when the Lord was there for you. Think of the blessings the Lord has given you, even the times when He may have saved your life. Seek God out with Thanksgiving and Praise. 

Detach yourself from your present circumstances and focus your attention on the Lord. Allow God to love you just the way you are. He is the lover of your soul. Focus on His love for you and trust Him. Know that without God you can do nothing. If you try to on your own you are simply trying in the flesh and the works of the flesh will fail. Your approach must change to that of the Spirit. The battle is spiritual and your answer is in the spiritual realm.

God's love is unfailing, He cannot fail. He has already provided a solution for you. It's not about our faithfulness or our failures, it's about His faithfulness and the victory He has already won for us on the cross. God Himself will rescue you from the enemy. You can run to Him and hide. There is safety found in Christ alone. God Himself will teach you to do His will for He is your God. His gracious Spirit will lead you into all truth and keep you on a firm footing.

Rest in Him. Rest in His Finished works. Jesus said over and over..."Only believe." According to your belief so it shall be done unto you. You can trust Him, go ahead, believe Him. 

Prayer in Time of Trouble

Lord, in every need let me come to You with humble trust saying, Jesus, help me.

In all my doubts, perplexities, and temptations, Jesus, help me.

In hours of loneliness, weariness, and trials, Jesus, help me.

In the failure of my plans and hopes; in disappointments, troubles, and sorrows, Jesus, help me.

When others fail me and Your grace alone can assist me, 
Jesus, help me.

When I throw myself on Your tender love as a father and savior, Jesus, help me.

When my heart is cast down by failure at seeing no good come from my efforts, Jesus, help me.

When I feel impatient and my cross irritates me, Jesus, help me.

When I am ill and my head and hands cannot work and I am lonely, Jesus, help me.

Always, always, in spite of my weakness, failures, and shortcomings of every kind, Jesus, help me.


Have you heard of this Jesus that I speak about? 

Maybe you believe in a historical Jesus but you have never met Him personally. You have never had a real experience with Him. Maybe you have never made Him your Personal Savior...

Receive Him right now into your heart. In your own words ask Him to make Himself your personal savior.  Ask the Holy Spirit to come in and fill you with Himself. Receive Jesus as Your Personal Savior.

The "School of Trials"?...

The "School of Trials"?

"Beloved, think it not strange concerning the fiery trial which is to try you, as though some strange thing happened unto you: But rejoice, inasmuch as ye are partakers of Christ's sufferings; that, when His glory shall be revealed, ye may be glad also with exceeding joy." 

                                                                           1 Peter 4:12-13

Andrew Murray said, "Every child of God must at one time or 
another enter the school of trial." And the Scriptures teach us that we are to count it a joy when God takes us into this school.

Just as there is no profit in the ground being made wet by rain or broken up by the plough if no seed is cast into it, so are children of God who enter into trial and have little blessing from it. The heart is softened for a time, but they know not how to obtain an abiding blessing from it. They know not what the Father has in view since they are in the school of trial.

Are you in the middle of a trial? Trust that the Lord will bring blessing as you trust in Him with all your heart.

Let 2 Corinthians 4:17-18 encourage you: 

"For our light affliction, which is but for a moment (this slight distress of the passing hour) worketh for us a far more exceeding and eternal weight of glory [beyond all measure, excessively surpassing all comparisons and all calculations, a vast and transcendent glory and blessedness never to cease!]; While we look not at the things which are seen, but at the things which are not seen: for the things which are seen are temporal (brief and fleeting); but the things which are not seen are eternal."

There is wonderful joy ahead, even though you have to endure many trials for a little while. 

These trials will show that your Faith is Genuine. 

It is being tested as fire tests and purifies gold though your Faith is far more precious than mere gold. So when your Faith remains strong through many trials, it will bring you much Praise and Glory and Honor on the Day when Jesus Christ is revealed to the Whole World." (1 Peter 1:6-7).

You learn things through tests that you would never learn any other way. The tests that you go through force you to look to God and depend on Him rather than depending on yourself. Allow your tests to make you better and not bitter. If you are going through tests right now strive to learn from them. You will never get to the next 'spiritual' level if you don't pass the test on the current level. Just as Abraham passed the test from God in Genesis 22, you must fully trust and obey God and pass your test as well. In doing so, you shall receive the wonderful blessings of God.



The Generation of the End Times.....Are We the Generation That Will See the End Times

This Generation - So likewise ye, when ye shall see all these things, know that my coming is near, even at the doors. Verily I say unto you, This generation shall not pass, till all these things be fulfilled. (Mat. 24 v.33-34)

Christ is giving giving us the criteria by which the season of His coming can be known, at least approximately. There is a generation that will not pass away until everything He has prophesied for the last days has been fulfilled. 

Obviously what Christ has to say here is of great importance in our attempt to discern how close we are to His return. There are, as always, some important questions we must answer. 

To whom is Christ speaking, to Israel or to the Church? 

Is He referring to the Rapture or to the Second Coming? 

Who or what does He mean by "this generation?" 

A time was coming when all the signs of which He spoke would have been fulfilled before the eyes of a particular generation. On that basis they would realize that Christ's coming was right at the door. Yet at the same time He declares that no one will know exactly when He will return, but those watching ernestly will know the season. In fact, many Christians are likely not to think that He is coming when He really is. 

We have already pointed out that there is only one rational and Scriptural way to reconcile these two statements. Christ can only be referring to two different events: The Rapture and the Second Coming. There are no signs for the Rapture, which will take almost everyone by surprise will happen 7 years prior to the 
Second Coming. So if the Second Coming is close the rapture must be even closer.

The signs are all for the Second Coming, which is why those who heed His Word would know exactly when He is right at the door about to enter the world scene once again. This time He comes not as a lamb to be led to the slaughter, but in power and glory and to take vengeance upon the enemies of God.

This is the only generation for which most of the prophecies of Revelation apply. This is the only generation in history that has witnessed the coming together of the whole predicted scenario to precede the Messiah's Second Coming. 

Here is a brief list of some of the fulfillment's of this predicted scenario:

The return of the Jews to the land of Israel and the formation of a state in spite of centuries of persecution wherever they fled

The Israeli recapture of old Jerusalem

The rise of Russia as a dangerous rogue military power with an awesome arsenal of lethal weapons inherited from the USSR

The rise of Islamic nations as a major power with their relentless pursuit of Jerusalem and Israel's destruction

The entrance of China as a world class power and the rise of Asia as the most populated and technically skilled area in the world

The uniting of European nations into a single awesome power after centuries of fighting with each other

The simultaneous increase in frequency and magnitude of war, earthquakes, plagues, famines, super storms, global warming and global weather pattern changes.

The Return of the Days of Noah and Lot - Jesus prophesied that "as it was in the days of Noah, so it will be also in the days of the Son of Man: They ate, they drank, they married, they were given in marriage, until the day that Noah entered the ark, and the flood came and destroyed them all. Likewise as it was also in the days of Lot: They ate, they drank, they bought, they sold, they planted, they built; but on the day that Lot went out of Sodom it rained fire and brimstone from heaven and destroyed them all. Even so will it be in the day when the Son of Man is revealed" (Luke 17 v.26-30)

Two of the most depraved periods in history were the days of Noah just prior to the Flood, and the days of Lot. In both cases the people were so sinful that God destroyed them from the face of the earth. In Noah's day it was the whole world that sinned; in Lot's day it was the cities of Sodom and Gomorrah. It is instructive that our Lord Jesus chose to use the moral climate in which these ancient people lived as a warning about the lifestyles of men and women just before His return. 

We are already living in the moral climate of the days of Noah and of Lot!

What Kind of Days Were They - Even a casual reading of Gen. 6 v.1-9 shows that the people of Noah's day were sexually obsessed. In this case the sons of God were cohabiting with the "daughters of men" and "producing giants - mighty men, men of renown" - renowned doubtless for their wickedness. The most important lesson we can learn from this passage is that their wicked lifestyle caused God to unleash the flood. 

Their lifestyle included three specific sins:

Sexual perversion.

"The thoughts of their hearts were evil continually."

Routine living with disregard to the consequences of impending judgment.

These people were "eating and drinking, marrying and giving in marriage." In other words, they ignored the preaching of Noah for 120 years and violated the known law of God as if there were no accounting to come.

Present world conditions could very well be as bad or worse than those that existed in the days before the Flood and in the days of Lot. The most common sins of our day are sexual, from fornication to adultery to homosexuality. That is evidenced worldwide by the 50 million or more abortions perpetrated annually and the rampant sexually transmitted diseases, for STD's to AIDS - all diseases that, for the most part, do not afflict those who follow the sexual laws of God. In the past generation, due to the increase in pornography via the internet, magazines, movies, TV and videos, there has been an acceleration of sexual promiscuity and an ever lowering of the age of first sexual activity.

The scourge of all sexual perversion is pedophilia and child molestation. Some have estimated that such sins against children have increased 300 to 500% since pornography was legalized by the Supreme Court in 1972. Pornography has caused the minds of both men and women to be obsessed with sex, or as the Bible predicted, "every imagination of the thoughts of his (man's) heart was only evil continually" (Gen. 6 v.5) Hollywood has polluted the most powerful communications vehicle the human mind ever invented, film, which has the ability to affect the mind, emotions, and will.

Homosexuality, the Sin of Lot's Day - The sexual sins of Sodom and Gomorrah in Lot's time were so gross that men were driven with a passion not only for their own sex but even became disrespectful to the angels who visited Lot. It is almost unbelievable in our day how those who reject the sexual laws of God have succeeded in making one of the basest of sexual sins, sodomy, respectable and even acceptable.

A few years ago Hollywood stars kept their personal sex lives in the closet. Today homosexuals are "out" and demanding their "rights". What rights do they demand? The right to marry, the right to cohabit with the same sex, the right to teach school, where they could influence young minds, the right to adopt children, the right to serve in the military - and the list goes on and on and our so called leaders give into them because they are a powerful voting block.

It's Later That its Ever Been - No one knows for certain when the rapture will occur or exactly when Christ will return. However, Christians living today have more reason than those of any generation before us to believe that the rapture is soon and Christ will come 7 years after the rapture, once the tribulation has played out. For example, most prophecy scholars agree that the generation that saw Israel restored to her land in 1948 could well be the "generation (that) will certainly not pass away until all these things have happened" (Mat. 24 v.32-34)

In other words, before this strategic generation passes from the scene, time, as we know it, will come to an end. When you examine the "signs of the times" that have been fulfilled in our lifetime, you have to believe the coming of Christ is very near. 

As Jesus said, "Near, even at the doors." Yes, we are indeed living in the end times!

Dr. John Walvoord, the most knowledgeable living prophecy scholar in the world today, (he lived from May 1, 1910 to December 20, 2002) said the following at a prophecy conference about the times in which we live: I have been studying prophecy for many years (over 50), and while I do not believe it is possible to set dates for the Lord's return, I do sense in the world today an unprecedented time of world crises that can be interpreted as being preparatory for the coming of the Lord. If there ever was a time when Christians should live every day as though Christ could come at any time, it is today.

Tim LaHaye, hopes that everyone who reads his book, "Are we living in the end times", will be prepared for His coming at any moment. Don't be like the majority, "ashamed before Him at His coming." We pray that you will "be ready" when He comes, he says.

When Jesus was asked "When shall these things be?" He told them: "Now learn the parable from the fig tree: when its branch has already become tender, and puts forth its leaves, you know that summer is near" (Mat. 24 v.32).  What does this mean? Many argue the "fig tree" refers to the restoration of Israel to her ancestral homeland. The fig tree is indeed a symbol for Israel today in much the same way the eagle symbolizes America or the bear is a symbol for Russia.

But, if that were the entire story, identification of the fig tree as Israel would be pretty subjective. The Bible does refer to a fig tree some 33 times - 18 times in the Old Testament alone. In context, the fig tree is always a symbol for Israel, such as Hosea's statement, "I found Israel like grapes in the wilderness; I saw your fathers as the earliest fruit on the fig tree in its first season." (Hosea 9 v.10)

It is in that context that the symbolism of a blossoming fig tree in early spring is used. Just as that is a sure sign the general time of summer has arrived, so, the argument goes, is the restoration of Israel to her land a sure sign the general time of Christ's return has arrived. 

With that in mind, the following verse is stunning: 

"Truly I say to you, this generation will not pass away until all these things take place." (Mat. 24 v.34)

This Generation Will Not Pass - One could expect something as important as "the end of the age" to be more clearly defined than a parable about a fig tree. After all, it was Jesus Christ who promised, "this generation will not pass." Why didn't He just say, "the generation that sees the restoration of Israel to the land will not pass till all these things be fulfilled"?

Why would He deliberately obscure an issue this important with vague references to trees, leaves and summertime? 

But, it's important to recognize that the parable isn't just about Israel as the fig tree. 

Jesus said the leaves would symbolize:

Religious deception and occult practices.

Hot wars and Cold wars (wars and rumors of wars)

International revolution among nations

Ethnic conflicts




Global weather pattern changes

Record killer storms

Like the first leaves on the fig tree, they would all come at the same time. Like birth pangs, they would all increase in frequency and intensity. And, the generation that saw all these things would not pass from the world stage until all of the prophecies of the last days - including His return - had come to pass.

"When these things begin to take place, stand up and lift up your heads, because your redemption is drawing near." (Luke 21 v.28) 

Keep in mind the audience to whom Jesus was speaking. The redemption He promised "would draw near" was the national redemption of Israel. He redeemed the Church (both Jew and Gentile who trusted in Him) at the Cross. That is an accomplished fact. Israel's national redemption in accordance with the Abrahamic covenant takes place at the Second Advent.

Could it be any Other Generation - Jesus' message was carefully addressed to one specific generation, somewhere in time, a generation to which His fig tree reference would make sense. That generation had to be able to identify the time in which it lived to the exclusion of all others. And Jesus defines a generation in a manner unique to Scripture. He says that the generation alive at the time of the rebirth of Israel will still be around at the Second Advent.

Not 40 years, or three score and ten years, or even 120 years. He put it simply. 

If you were around in 1948, then, barring being hit by a bus, or run down by a runaway shopping cart, you can expect to be around to see all these things. All of them.

Understanding the times in which we live is not the exclusive domain of the theologian. Peter reminds us, "but know this first of all, that no prophecy of Scripture is a matter on one's own interpretation." (2 Peter 1 v.20) 

The fact is, evidences pointing to this generation as the Last Generation is all around us, interconnected with such precision that no thinking person could honestly cry "Coincidence." A plan for human history, laid out in advance, with each detail recorded thousands of years in advance, can only come from God. Those details of Bible prophecy must be fulfilled within one generation, and no other - or it is nothing more than "coincidence."

What we see happening all around us are the birth pang signs all increasing in frequency and intensity, in concert with each other. This demonstrates to some degree how close the ultimate fulfillment these birth pangs are in relation to our present age. The fact is, the next firm event on the prophetic calendar is the Rapture of the Church. All the other signs will not be completely fulfilled until after that takes place.

The unveiling of the Antichrist, the false prophet, the mark of the Beast, the signing of the 7 year covenant between Israel and her enemies, the rebuilding of the temple - these cannot occur until after God removes His Church. However we are seeing the increasingly heavy shadows of what is to come. 

We are pushing at the membrane of time that separates the Church Age from the beginning of Tribulation.

Unusual Signs Unknown to Previous Generations - Wars, pestilence, famine, earthquakes, etc., These are some of the signs which yearly are increasing at a rate unlike anything known to previous generations. Ours is the first generation for which these prophecies, seemingly impossible before, even make sense. 

Let us look at some of these peculiar signs. Christ declared that the Great Tribulation would involve dangers to life unlike anything ever known. So horrendous, in fact, would the weapons be, that "except those days be shortened, there should no flesh be saved." That statement seemed outrageous for more than 1900 years.

There were no weapons capable of wiping out all life on this planet. None, that is until our generation came along. Not only the nuclear arsenals which are now common knowledge fall into that category, but other secret weapons equally deadly have been developed. A major deterrent to the use of these star wars weapons has been the fear that a disaster of cosmic proportions could be unleashed which would make any kind of life on this planet possible.

Don't be Shocked, Flee to the Only Hope - Something that should surprise no one, especially those familiar with bible prophecy, which explains just how badly conditions on earth will deteriorate in the days just before Jesus return.

"But realize this," Paul wrote in 2 Tim. 3 v.1-5, "that in the last days difficult times will come. For men will be lovers of self, lovers of money, boastful, arrogant, revilers, disobedient to parents, ungrateful, unholy, unloving, irreconcilable, malicious gossips, without self control, brutal, haters of good, treacherous, reckless, conceited, lovers of pleasure rather than lovers of God; holding to a form of godliness, although they have denied its power; and avoid such men as these."

Revelation is beginning to sound a little less allegorical and a little more real?

Hal Lindsey in his book Apocalypse Code tells us as he watches the evening news and reads the daily newspapers, it breaks his heart to see how rapidly the world as we know it is moving toward catastrophe. The kind of bone chilling economic, political, environmental and spiritual disasters that he has written in his book. 

Think about the world around us:

Russia, a renewed superpower with one of the world's largest nuclear stockpiles and teaming up with others.

China with the largest army in the world with nearly 3 million in active service with another 200 million plus militiamen.

Christians are already the most persecuted religious group in the world today. ISIS and Islam are a rapidly growing threat! 

Infectious diseases have increased in the US by 58%. Growing resistance to antibiotics is a serious threat.

Unpredictable and often deadly weather has the most serious climate researchers in the world wondering what's going on. Is it global warming? Is it ozone depletion? Is it something we don't understand?

Earthquakes continue to increase in frequency and intensity, just as the Bible predicts for the last days before the return of Christ.

The United Nations Environment Program reports that plants, animals and entire ecosystems are threatened at much higher rates than ever before in recorded history. At least 4,000 plants and 5,400 animals are threatened with extinction. In addition, species are becoming extinct at a rate 50 to 100 times higher than normal. 

For years Hal Lindsey has been telling people to keep their eyes on Turkey - a strategically important nation and one whose prophetic significance is sometimes underrated. The Armageddon coalition described in Ezekiel 38 is well into formation.

The world of electronic financial services with a short term goal of replacing all cash and check transactions with electronic transfers is rapidly taking place. The Philadelphia Inquirer reported Jan. 21, 1996: "Thirty years from now, chips will be implanted in our bodies encoded with credit card, passport, driver's license and other personal information." Other experts say it won't take that long. We are almost there!

The United Religions Summit has written a charter intended to unify the world's faiths. "We are on the threshold of a new global civilization," explained William Swing, a California Episcopal bishop who has spearheaded the movement. "When people look around, religion has just not been at the table." One time UN Assistant Secretary General Robert Muller, wrote: "If Christ came back to earth, his first visit would be to the UN to see if his dream of human oneness and brotherhood had come true." Muller, by the way, is associated with the Lucis Trust, a New Age organization that evolved from the Lucis Publishing Company, previously known as the Lucifer Publishing Co. Draw your own conclusions about which master such men serve.

Every year since the signing of the Treaty of Rome in 1957, Europe has become more powerful on the world stage. Beginning with only six member nations, France, Germany, Italy, the Netherlands, Belgium and Luxembourg, it has grown into an economic and political behemoth of nations populated by nearly a billion people.

What a Coincidence! - The model for the modern state of Europe was born in 1948 - the same year as the rebirth of Israel. It was codified nine years later by what is known as the Treaty of Rome. It came into being simultaneously with the emergence of the Cold War - "the ultimate "rumor of war".

Europe's own choice for a national symbol is a Woman Riding a Beast - Revelation 17 v.7. If this were the only event predicted by the Bible to take place at the same time as the rebirth of a nation whose history was frozen in time for 2500 years, it would be astonishing. But the Bible makes many other precise predictions. Each connects with the other, like building blocks. 

As we will see, the revival of the old Roman Empire is just one development that fits the Bible's timetable. There are hundreds more. We face an "if - then" equation.

If all these prophecies can be identified and documented as being fulfilled in one generation, then this generation must be the last before the Lord returns. If not, then the evidences documented here represent the most colossal coincidence in history. That conclusion would require a greater leap of faith than any necessary to accept the plain truth of Bible prophecy.

Many prophecy students interpret this passage to mean that when we see the rise of Israel as a nation (as we did in 1948) we will know that the time of the end is "near", at the doors. They reason that when a fig tree is used symbolically in Scripture, it usually refers to the nation Israel. So when Israel became a nation in 1948, they believe that was the "sign" of Mat 24 v.1-8, the beginning "birth pangs".

It was as if the tree was planted in 1914 -1918 when the first "birth pang" was felt, but did not grow into a full blown tree capable of budding until 1948 when Israel was granted statehood, thus fulfilling (Ezek 37 v. 1-8). Combine this with "So you also, when you see all these things, know that it is near, at the doors" (Mat 24 v.33) In other words, when all the signs mentioned appear such as war, famines, pestilence, earthquakes and Israel becoming a nation, you know that the return of Jesus is close at hand.

How long is a generation - Psalm 90 v.10 tells us, "The days of our years are three score years and ten; and if by reason of strength they be fourscore years, yet is their strength labor and sorrow" Moses here suggests that a generation is seventy to eighty years. 

1948 + 70 = 2018

1948 + 80 = 2028

Subtract 7 years for the length of the tribulation from each of the above dates and you get 2011 to 2021, 2016 being the midpoint.