Habakkuk 1:5 Look among the nations, and see; wonder and be astounded. For I am doing a work in your days that you would not believe if told. -LORD God
Proverbs 22:7 The rich rules over the poor, and the borrower is the slave of the lender.
Proverbs 22:16 Whoever oppresses the poor to increase his own wealth, or gives to the rich, will only come to poverty.
Michael Douville took the time to talk with President of Pento Portfolio Strategies, Michael Pento.
For those who are interested in a deep discussion about bonds, debt, and lending. How will this affect real estate, bonds, and stocks? Click on the YouTube video link below.
Michael Pento lays out the Risk in the Equity Market, the Bond Market, and the Real Estate Market: The “Great Triumvirate”.
Pento and Douville see trouble coming in the real estate market. Is the bubble popping?
Commercial real estate properties are increasing with vacancies in major cities across the United States.
The Federal Reserve is shrinking the money supply. Liquidity is drying up globally.
Michael Pento discusses the explosion of Debt and its relationship to the Gross Domestic Product, GDP. Debt is 263% of GDP!
Investors might limit their exposure to “High Beta” Stocks. Avoid technology stocks.
Pento likes short term government treasuries (3 years of less), gold, and utilities.
Interest rates have never been raised this quickly and this high. The yield curve is inverted.
How will the banking industry be affected? Personal Bank Accounts should be kept to under the FDIC approved $250,000 limit. A few months of Cash liquidity kept at home would be prudent.
Michael Pento outlines the Financial Risk coming. Pento sees a deep recession coming. The conversation flows swiftly with great and valuable content.
Michael Pento, President and Founder Pento Portfolio Strategies
Check out Michael Douville’s latest take on the real estate market and the economy.
Fortunes will be LOST! Fortunes will be MADE. Timing is Everything. Our timing model is showing that the Real Estate Market will be showing evidence of the slowdown by the end of the 2nd quarter or maybe early 3rd Quarter of 2023.
Prices could decline in Out-Migration States by much more than Florida, Texas, or Arizona. Could prices decline over 30%? My Timing Model forecasts that possibility.
Pending home sales are slowing and Builders are selling like crazy as they attempt to liquidate their properties. They are scared to death and will make deals.
By buying rates down and making concessions, builders are going to have trouble with their lenders.
The Real Estate market has probably peaked and the 2nd and final Peak is forming now!
A recession is coming with a likely hard landing. The recession has likely started.
Michael discusses cities at risk across America due to crime, poor management and leadership. Large, corporate businesses are leaving major metropolitans. Tax bases and revenues are decreasing in these cities.
Pensions are losing their value in Europe due to negative interest rate bonds.
In the opening remarks, Dr. Nenner mentions the Equity Market is heading for a ‘Situation’ similar to Bonds. Both Markets are heading into turmoil.
Charles and I speak about Bitcoin, Interest rates, commodities, Housing, lumber, Bonds, Gold, the Dow, and the S&P.
Charts further indicate the Equity Market may be heading into trouble. Commodities appear to be in a very favorable trend. Dr. Nenner also mentions Inflation could be 12 or 13%.
Charles Nenner displayed a Sunspot Chart that correlated amazingly well with the Stock markets and the Economy; when there is intense Sunspot activity, Stocks and the Economy do very well. Unfortunately, we are heading into a timeframe of reduced Electromagnetic intensity.
Charles Nenner is often seen on Bloomberg, CNBC, and Fox News. He has been interviewed by Forbes and The Financial Times.
When Charles Nenner speaks, it pays to listen. Click on the video below for the details.
Dr. Nenner offers a free trial subscription for a few weeks. Please mention you watched this video. https://www.charlesnenner.com/
If you are interested in a consultation for placing Cash Flowing rental properties in your portfolio, reach me at michael@michaeldouville.com
Ecclesiastes 3:1 For everything there is a season, and a time for every matter under heaven…
Dr Nenner is not only brilliant, but gracious spending almost an hour of his time discussing current conditions in the Financial World. As one of the most influential Cycle Researchers in the World, Charles Nenner shared his most recent research and discussed the Cycles of Stocks, Bonds, Interest Rates, and the safer harbor for Income Investors, Real Estate.
Dr. Charles Nenner
As Dr. Nenner repeatedly states all things change. Good times end, Bad times end and everything cycles from Seasons to Interest Rates. Nenner Research indicates the Globe may be about to experience a profound change of Cycle. Soon, the US Business Cycle will be setting a record for expansion surpassing the 120 months of growth experienced in the 1990’s; setting a record implies this is unusual, as it normally does not last this long! The expansion is so old and so long many have forgotten that Business Cycles complete, they change! The Business Cycle transitions from Expansion to Contraction slowly, then all of a sudden. Charles Nenner’s research has predicted the slowdown. It is now no longer a prediction, but fact and the Economy of the World is poised to get worse, much worse. Excesses still unresolved from 2009 added to the inevitable malinvestment of the current Cycle presents the potential for a downturn worse than the Great Financial Crisis!!
Excesses still unresolved from 2009 added to the inevitable malinvestment of the current Cycle presents the potential for a downturn worse than the Great Financial Crisis!!
Charles Nenner’s Cyclical Research forecasts declining US GDP in 2019 to a year end level of less than 1%; GDP for 2020 may be contracting to below 0. Currently, Industrial Production, Manufacturing and Factory Orders are declining in the US.
Auto sales are falling,
Retail has not recovered from one of the worst Christmas Seasons in 20 years and retail store closings and shopping mall closures are at a record pace.
My favorite asset class, Real Estate, is in a mid cycle correction and has experienced 14 months in a row of declining Existing Home Sales with prices in some markets notably New York City, Seattle, San Jose actually beginning to deteriorate.
Dr. Nenner foresees a Stock Market decline accompanying the softening Economy starting in earnest mid to late July. Unfortunately, Dr Nenner’s Research does not indicate a short drop and quick recovery, but a more prolonged period of slow Economic activity. Those in retirement or approaching retirement should take heed; an extremely conservative approach or an exit strategy might be discussed with their Investment Advisor. Losses incurred from a Stock portfolio may require a very long time to recover. Many Baby Boomers do not have that time! Avoiding loss should be the goal, not squeezing out the last dollar of profit. Lose 40% or more and the “Golden Years” are not so golden!
For a free trial offer of Charles Nenner’s newsletter, go to www.charlesnenner.com and mention this interview.
In Prior slowdowns, Investors could transfer Wealth into Bonds when the Stock Market plunged. Charles Nenner sees higher rates from July going forward that will eventually lead to significant losses and much higher rates in just a few years. Dr. Nenner also envisions Global Deflation; Deflation is much more difficult to manage than Inflation prolonging the contraction. Deflation often refers to the destruction of Credit and Debt through non-payment or defaults. Obviously, as Risk of Default or possible Debt restructure rises, Investors demand to be compensated for the Risk and Rates rise. This is counter intuitive to a slowing Economy which speaks to the predicament of Extreme Global Debt. Individual US Treasury Bonds representing the safest investment in the world issued by the Global Reserve Currency will receive unprecedented demand; Capital seeking safety. Dr Nenner’s Cycles for the 30 year Treasury Indicate demand pushing Treasuries to possible new low yields. A bifurcated Bond Market?
Bonds and debt without the implicit guarantee of the US may suffer loss of principal in a World engulfed in Global Deflation and Contagion.
Bond funds and ETF’s which unlike simple bonds, never mature could incur losses of 70% or more in a rising rate environment. Further, Deflation may cause huge losses in lower quality Bonds and Debt instruments. Estimates are as high as $2.5 Trillion in Corporate Bonds could already be just one notch above JUNK! A recession could double that. Downgrades and Defaults will cause massive Bond losses.
Consistent income will help mitigate the turmoil that is coming. The S&P dividends yield less than 2% and the risk of monumental loss of value dictates avoidance. Bonds and Debt instruments are facing the potential of devastating losses as well. The current Income provided is not much more with the 10 year Treasury yielding less than 2.2% in an Inverted Yield environment. Any increase of Interest Rates will devastate a Bond Portfolio. Fortunately, Real Estate provides consistent, conservative, and monthly Income.
Conservative single family residential rentals provided cash flow month after month through the Great Financial Crisis. As a separate asset class from both Stocks and Bonds, Real Estate barely correlates with Wall Street; estimates are in the 8-9% range. Real Estate, although cyclical, is also very Regional in Nature. There are several truly great Real Estate markets in the US that are experiencing both Organic growth and Demographic growth causing demand for Housing. Las Vegas and Phoenix are both exploding adding over 100,000 new residents each in 2018; one cause is the Exodus from California, a Mega Trend that will last for years. This population increase is creating jobs and an enormous demand for rentals. Dr Nenner believes that investing in Small Units and Entry Level Single Family properties will generate Income through the economic downturn and may prove to be a very prudent investment. Investors will receive useable cash flow while waiting for the Real Estate Market recovery which may bottom as soon as 3rdquarter 2020. Just beyond the current Real Estate correction is the “Explosive Phase” of the Real Estate Cycle where Fortunes are born! Not just Cash Flow, but much higher prices.
Will rising HOME prices coincide with the 30 year Treasury declining to historical low rates? Will the US experience Negative Rates and barely positive mortgages as our European Cousins? Will Risk expose struggling Corporations, Munincipalities, Counties, States, and maybe even Sovereign borrowers to much higher rates based on Credit downgrades? The next few years promise to be very interesting; is that a Chinese curse????
Rental Cash Flow may be one of the few Income Streams that will be monthly, consistent, and actually grow in a downturn; a fiscal Lifeboat! Risk has entered the Market. As a separate asset class, Real Estate may provide a safer asset for your Wealth. Always discuss with your Financial Advisor before Investing.
1For everything there is a season, and a time for every matter under heaven:
2ba time to plant, and a time to pluck up what is planted; 3ba time to break down, and a time to build up; 5aa time to cast away stones, and a time to gather stones together; 6a time to seek, and a time to lose; a time to keep, and a time to cast away; 7a time to tear, and a time to sew…
Something has changed! A Global down turn is underway; it can be seen in the Industrial statistics, the”Yield Curve” Spreads, the Baltic Dry Index. The slowdown can be seen in declining Home Mortgage Applications and increasingly higher Auto loan delinquencies; much, much higher credit card debt with slower repayments. Not surprisingly, the Spring Real Estate market in many regions of the US are exhibiting slowing sales when Property sales should be seasonally expanding. These are all signs of an aging Business Cycle.
This happens in Free Markets; it happened in 2010, 2012, and a longer decline in 2015. Each decline was met with Global Central Bank interference in the form of massive Liquidity injections via purchases in the Equity Markets and massive purchases of all forms of Bonds and Debt Instruments. Maybe a not so “Free market”.
Something has changed! Instead of ZIRP (zero interest rate policy), rates are rising! Instead of Massive Global Central Bank purchasing in a declining market, the Federal Reserve is actually selling! In April of 2017, the Central Banks were purchasing at the rate on $1.7 Trillion Dollars; tapering in April 2018 to an alleged big fat ZERO! The ECB is still caught supporting the European Markets as is the Bank of Japan for the Japanese Markets. The simple reason is that no else is willing to enter theses markets; no one entering at the current reduced and manipulated rates!
Something has Changed! Without the Financial Credit Pulse of coordinated Global Central Banks, Volatility and RISK have reappeared. The support has been removed and The Federal Reserve has announced not only are they NOT purchasing, but they are selling; $8 Billion Feb 5, 2018 alone. It is time to Pay Attention!!!
Your Wealth is at Risk! Americans 55 years and older have a 70% of their Nest Egg in the Stock Market and 20% in the Bond Market; rising rates devastate Bond Funds! Those approaching retirement age are not “in it for the long Haul!” There is not enough time to recoup losses before the funds are needed. There are times to be Aggressive and times to be Conservative; the Fed has transparently announced their intentions. This may be a time to be very conservative. In fact, one does not need to be fully invested 100% of the time. Without support, the Markets are free to act the way Markets are suppose to act. The next downturn could be EPIC!
Something has changed! Your Future is at stake! Now might be a very appropriate time to review your goals and concerns with your Financial Professional. Maybe an “Exit Strategy” should be developed with a goal to transfer into different asset classes.
Something has changed! A Global down turn is underway; it can be seen in the Industrial statistics, the”Yield Curve” Spreads, the Baltic Dry Index. The slowdown can be seen in declining Home Mortgage Applications and increasingly higher Auto loan delinquencies; much, much higher credit card debt with slower repayments. Not surprisingly, the Spring Real Estate market in many regions of the US are exhibiting slowing sales when Property sales should be seasonally expanding. These are all signs of an aging Business Cycle.
