There’s a pressing matter I want to bring to your attention… it’s a massive warning sign with red flags all over the place, and it’s reminiscent of the housing crisis more than a decade ago.
The world is hooked on debt… and it’s been like that for years. The only solution to this growing problem is more debt, according to the so-called Wall Street “experts”
Coming out of the financial crisis, the “only way” to support the economy was to provide easy money where everyone and their brother could take out loans on the cheap.
Global debt is now sitting at a record of $250 trillion. What the policymakers didn’t realize is the fact they’ve put so many people in mountains of debt… and now it’s all starting to bite them back. It doesn’t seem like the Fed cares a whole lot about that, as they’ve adopted the “wait and see” approach.
When you take a look at the percentage increase in global debt… it looks as if we’re heading into another financial crisis.
When you look at corporate debt, U.S. companies accounted for approximately 70% of the total corporate defaults in 2019… and that rate is extremely scary when you think about it.
I know, you’re probably wondering… How does this all affect me, Jason?
Are The Financial Markets Doomed in 2020?
“Be fearful when others are greedy and greedy when others are fearful” — Warren Buffett
With the market sitting near all-time highs, it goes to show you how greedy traders and investors are at these levels. Think about it like this… valuations are sky-high, yet people still play for the momentum breakout. That’s a smoke signal to me.
When your UBER or LYFT driver starts talking to you about stocks, asking you what they should invest in… you should be fearful. However, that doesn’t mean you can’t turn that into an opportunity.
Right now, there are so many potential Black Swan events that could damage the market to the point of no return.
What is a Black Swan event?
According to Nassim Taleb (the famed options trader who popularized the term), it’s an event with three attributes:
- Outlier. In other words, it’s an event that falls outside of our per view because “nothing” in the past could point to it being a possibility.
- Carries extreme impact. Think back to the housing crisis back in 2007-2009.
- Traders and investors try to come up with explanations after the fact.
The thing is… traders have been profiting from the events for decades…
And it’s so lucrative that the CBOE actually came up with an index for it.
The CBOE Skew Index lets us know the probability of a catastrophic event that could hit the market. When the Skew Index reaches record highs… it’s a warning sign that stocks could be set to crash.
We’ve seen this index trend higher before market sell-offs. For example, back in September 2014, the Skew Index hit 146…
… and guess what happened with the market?
The S&P 500 ETF (SPY) dropped 7% that month… and when you look back to February 2018, the Skew Index signaled a massive drop in the markets.
Of course, that’s in the past and you’re probably wondering, “Jason, what the heck is going on with the market right now?
Well, the Skew Index is ramping higher…
And with SPY hovering around all-time highs… we could see a drop in the market very soon.
The smart money is preparing for the worst… central banks still have interest rates at extreme lows but U.S. Treasuries at their highest valuations in a century — it’s quite clear we may be in bubble territory.
However, buying Treasuries only helps to protect your profits in the event of a crash… but what happens if there are corporate debt defaults across the board? We could see investors and traders start to rotate out of bond ETFs and mutual funds, which could spark a massive selloff.
So how can you actually position yourself to profit in a crash scenario?
You’ll find out Thursday, December 12 at 12:00 PM EST as I reveal my BRAND NEW trading strategy — Smoke Signals — and show you how you can take advantage of a company poised to fall in ANY market environment, not just bearish ones.
- I’ll show you how you can turn fear into profits.
- I’m finally drawing back the curtains, and I’ll show you how to use my latest smoke signal patterns
- You’ll learn how to make money when stocks fall.
- The biggest industry shakeup in 2020
- Why you need to be prepared to bet against stocks at all times.
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