The Super Crash Will Start by June 20th

Folks, today I am issuing an official Super Crash Warning. That means we are on the verge of a serious market event in the near future, which I now predict will hit by summer, June 20th, 2016, and it’s not going to be a good one.

It must seem like I never have any good news for you, but it’s my job to see the world as it is, not as I’d like it to be, and what I see is things getting worse by the day:

  1. FINANCIAL STOCKS ARE CRUMBLING.U.S. bank stocks have fallen 30-40% over the last few months, a very bad sign. Just look at the charts of Goldman Sachs (GS), Morgan Stanley (MS), Bank of America (BAC), Citigroup (C), JPMorgan (JPM)… These stocks are very sensitive to systemic instability. Private equity stocks are getting crushed too – Apollo (APO), Ares (ARES), KKR (KKR), Blackstone (BX), Carlyle (CG), Fortress (FIG). I warned you last week about Deutsche Bank (DB) and the coming collapse in European bank stocks – but if you look at their bonds and credit default swaps, the news is even more ominous. The thing all of these companies have in common is heavy exposure to the high debt levels that built up since the financial crisis. The market is telling us that it is very worried that the Debt Supercycle is over and that a lot of this debt isn’t going to be paid back.

  1. ESTABLISHED HEDGE FUNDS ARE FAILING.The Wall Street Journal just reported that Orange Capital is shutting down after a decade in business. Meanwhile Chase Coleman, one of the most successful Tiger Cubs, took a hit of 14% in January. Larry Robbins’ Glenview Capital Management, one of the most successful managers over the last decade, lost an incredible 21% in January after being down 17% in 2015. Bill Ackman was reportedly down double digits again in January after a 20% loss in 2015. For many of the best managers in the hedge fund game, it seems the game has changed. They can’t make money when the Fed isn’t pumping massive amounts of money into the system – but that’s because hedge funds were in a bubble like everything else and the bubble has burst. It turns out that very few hedge fund managers can make money in today’s world (I am happy to report that I am one of them – my own fund made good money in 2015 and even made a profit in January 2016 when markets were blistered with losses).
  1. THE HIGH-FLYING TECH STOCKS ARE GETTING CRUSHED.Check out Netflix (NFLX), Amazon (AMZN), LinkedIn (LNKD), Tesla (TSLA), all down 15-20% so far this year. It’s a bloodbath. Only Alphabet (GOOGL) and Facebook (FB) are doing well and both are overvalued and due to come back to earth. Readers need to ignore the breathless media coverage of these companies and use common sense. Look at Apple (AAPL) – trees don’t grow to the sky and neither do iPhones, search engines and friending platforms.
  1. THE DAMAGE IN THE HIGH-YIELD BOND MARKET CONTINUES.The junk bond market is essentially closed to new issues. While the Federal Reserve finally raised rates by 25 basis points (a move it will probably have to reverse), the market has raised the cost of capital for junk borrowers by hundreds of basis points. This means that many of these borrowers will not be able to refinance their debt when it matures in the next 2-3 years. That means these companies will default on their debts. Sports Authority is reported to be planning to file for bankruptcy before the end of February, another victim of the retail wars. There will be more as many retail company bonds are trading at distressed levels. The junk bond market will not bottom until late 2017 at the earliest. Junk bonds are among the most credit sensitive asset classes around and they are signaling that the economy is weak and big trouble lies ahead.
  1. CHINA – THE EPICENTER OF GLOBAL INSTABILITY – IS A TIME BOMB.It’s not just the $30 trillion in debt. Société Générale came out last week with an important prediction that China will run out of foreign exchange reserves in a matter of months rather than years. That would unleash a currency crisis and banking crisis that spreads quickly throughout Asia, and it won’t stop there. China is an economic and ecological disaster that threatens the entire global economy.
  1. MARKETS ARE LOSING CONFIDENCE IN CENTRAL BANKS…And that is the final straw. The Fed is being openly scoffed at by smart people. I’ve been doing this for years but now people who used to limit their criticism of the Fed because they were worried about being politically correct (I never had that problem!) are now deciding that telling the truth is more important. Instead of showing up on CNBC to sing the Fed’s praises, they are pleading with the Fed to take action to prevent an economic cataclysm. But it’s too late. The Fed waited too long to raise interest rates. ECB President Mario Draghi and Bank of Japan head Haruhiko Kuroda are saying they will do whatever it takes to push up inflation in Europe and Japan regardless of how much global instability it causes. But it is too late for them too. All they can do is cause more damage by destroying their currencies in a desperate attempt to delay the inevitable economic depressions that are going to swallow their economies.

How to Protect Yourself

The world has been taken to the edge of the cliff again by incompetent central bankers – and in the next few months they are going to jump over the cliff. I don’t want my readers to jump along with them. It must seem like I never have any good news for you, but it’s my job to see the world as it is, not as I’d like it to be, and what I see is things getting worse by the day, but there are a lot of things you can do now.

  • Keep buying gold and silver. They may be out of favor today but they will save you tomorrow.
  • Make sure you own dollars rather than euros and yen. The dollar is still the best of a bad bunch.
  • Buy out-of-the-money puts on the S&P 500 as a hedge against the big stock sell-off I think is coming.
  • Buy SH, the short ETF that goes up when the S&P 500 goes down.
  • Sell the equities you have and move into cash.
  • And if you own junk bonds of any kind, sell them before it’s too late.

Right now is the time to protect yourself, but you will have a chance to buy all kinds of assets at going-out-of-business prices in the not-too-distant future because, to be honest, a lot of companies may go out of business but the ones that don’t will be trading like they might. My job will be to tell you which ones won’t and help you buy them when they are cheap enough to offer you attractive risk-adjusted returns.

In the meantime, you must protect yourself from the damage that is about to be unleashed by the incompetent central bankers who have destroyed the world.

Don’t panic. Do act now. We are on the brink of the Super Crash.

Sincerely,

Michael Lewitt

Access Michael’s full Super Crash report

23 Responses to “The Super Crash Will Start by June 20th”

  1. I have read your article about the Super Crash and about buying gold and silver. I have also been following other websites and viewing what has been going on up to today being February 8, 2016. In the past week HSBC Scotia McLeod and Brinks have virtually empty it out to Carm in the past week HSBC Scotia McLeod and Brinks have virtually empty it out the COMEX of gold only leaving about 74,000 ounces. On Friday, February 5, 2016 the federal reserve had $20 billion all of a sudden leave. Where did this money go?? A Mexican silver producer also announced a 25% reduction and Mining as they’re closing one mine down. As I check Canadian banks for silver they are also running out which tells me that there’s a massive shortage and silver already! The Canadian silver mines have already shut down in 2014/15, what I’m gathering from all of these different websites, and economists, is that the spread difference between gold and silver will Merrill and sober will be the better bet in climbing in percentages. I personally do not buy silver coins or gold coins, I do Buy silver bars with recognize stamps like sunshine RCM and A mark. With the collapse of the theater current see you so I’m already starting to see forged silver bars! It is under my advice that people should buy these recognize bars 1 ounce, 5 ounce, 10 ounce, 1 kg, and 100 ounce bars from recognized dealers. It’s also under my advice to stay away from paper contracts as gold in the COMEX is already hedged as of this morning at 572!

  2. Hello,I own Franco Nevada Crop shares as my gold position.
    It is very difficult if you have your pension funds in a S.I.P.P (live in UK) to buy physical gold or silver,the reason being you pay high tax on the money you draw out.
    So my question is how is the best way to protect the £s in a SIPP without have to draw them out and pay high % of tax on your capital ,that you may need to live off .

    Thank for all your wonderful reports ,they are both interesting and informative.

    Kind Regards,
    Tony E.

  3. Michael, I just don’t understand why you are not recommending “Equity Indexed Fixed Annuities to solve this problem. They offer guaranteed no lose of principle, a 16.6% guaranteed return the 1st year, and a guaranteed 6% return the following years in their (GLIR) Guaranteed Lifetime Income Rider).All taxed are defered until you start taking your funds out of the plan.
    I really think you gutless for not recommending this option to your followers.

    Regards,

    RonFloyd

  4. Reply to Dana

    Dana buying silver IS the right thing to do. Think about this, what could a 100 OZ BAR BE WORTH LATER, $ 100. OZ OR $1,000
    OZ.????. WHO WILL HAVE $10,000 OR $1000,000 laying around to buy and when they do. The government will know also.. think smaller Oz’S to stack good luck

  5. Judy – Ron is talking about An FIA product that has a 10% bonus and a Income RIDER that rolls up at 6% for limited period of time. If you have a need for a guaranteed income stream in the future, this could be a suitable solution. One advantage of using this type of product for income is that you DO NOT have to annuitize the contract to create the guaranteed income. This rider allows you to maintain control of your money and the accumulation account has the ability to continue to get index credits each year. There is a fee for the rider, but it is minimal and does not reduce the 6% credit into the income account. This is a brief description on a product that has lots of options and bells & whistles. It’s with American Equity.

  6. Thank you Micheal for your clear and transparent views on the BEAR market …I disregard all other newsletters and articles and believe only YOUR ARTICLES. I am nearly 70 years old and need to make money this time to support all the family members i love .Since i was burned badly twice before, i do not want to lose out again and suffer in life.My questions are:
    1) with the recent 5-8 % surge in the USA indexes , is this bear market over and if so do I get rid of my inverse ETFS TVIX ? (av cost 11 $ ).
    2) Is June 20th the date when you will find out if Trump is the republican candidate and is maybe more popular than the democrat candidate …in which case GOD HELP USA !!
    Thank you,
    cordial regards,
    novice trader

  7. Micheal;
    Could you please write an article to explain the meaning of currency, how it is created and put into circulation? If interest is paid on savings, doesn’t that increase the money supply thus devalue-ting that which is already floating around? I would consider this inflationary. So how does the FED measure inflation? And since this condition can’t go on forever, at what point it would reach when the house of cards finally collapses? I find it extremely myopic that everyone lives to make as much money as they can possible stuff in a bank account and no one ever mentioning that the interest paid on those accounts really depreciate the value of the deposit. Banking is a bookkeeping service and those employed in that sector need to live too whether they are paid out of the interest borrowers pay or the depositors that safe keep their savings in those banks certainly it looks to me that the situation is one that we like to suck and blow at the same time. I hope you can put this situation in better perspective.

  8. Debbie, April 16 is USA individual income tax due date. Lots of people owing more taxes they can afford could depress the markets (and maybe trigger a downturn). But corporate Income tax is due for US corp’s. Responsible money managers see trouble coming months ahead, but little shops might get bad tax news and curtail spending plans, hence slow the economy around that time of year.

  9. Michael, question…..Looking back at the Market when in dumped back last August I noticed SH only went up about 24.00 and UVXY went up to $90.00…So my question is why not buy UVXY instead of SH? Is UVXY tied to something that could affect its over all gains?
    Sincerely
    JC

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