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The Weekend Edition is pulled from the daily Stansberry Digest. The Digest comes free with a subscription to any of our premium products.
The Battle to Be the Fed's Greatest FoolBy
Saturday, July 1, 2017
"Big Three" U.S. automaker General Motors (GM) is finally admitting the obvious...
The boom in auto sales is peaking. As news service Reuters reported following the company's conference call on Monday...
Unfortunately, while the company admits that sales are slowing, its outlook remains relatively rosy. More from the report...
In other words, GM believes this "moderate downturn" will cause prices to plummet to levels not seen since... 2015, when new-vehicle sales totaled a little more than 17 million. We believe GM is far too optimistic...
During the last big downturn, sales peaked near 17 million in 2005... and ultimately plunged to just 10 million by 2009. Given the size of the recent boom, we wouldn't be surprised to see sales fall to less than 10 million this time around.
GM apparently also has a different definition of "disciplined" than we do...
According to Stevens himself, the company has an incredible 110 days of supply sitting on dealer lots today. This compares with an average of just 65 days of supply among major U.S. automakers since 1960, according to data from WardsAuto. Stevens did say the company hopes to bring this figure down to 70 days of supply by the end of the year.
We're skeptical of this claim as well... Automakers have been using huge discounts and incentives to entice new buyers. But this trend is unsustainable. And we're seeing signs that it's peaking, too. As the Wall Street Journal noted this week...
Meanwhile, the "legacy" of former Federal Reserve Chairman Ben Bernanke appears to be in trouble... Today, Bernanke is probably best known as the man who "saved" the U.S. economy from the 2008 financial crisis.
Of course, we believe Bernanke's bailouts and easy-money policies merely delayed the inevitable... and ensured the next crisis will be far bigger. In the end, we suspect history may remember Bernanke as the greatest fool to ever run the Fed.
For example, in 2005, near the top of the biggest housing bubble the world had ever seen, it was Bernanke who said...
In 2007, after the housing market had clearly rolled over, it was Bernanke who assured the public time and again that the problems in subprime mortgages were "contained"...
And in mid-2008, just days before subprime "contagion" caused the collapse of mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC), you-know-who swore the following before Congress...
We could go on, but you get the point... But Bernanke could now have some competition for this "title"...
His successor – current Fed Chair Janet Yellen – is suddenly in the running, too...
During a question-and-answer event on Tuesday, Yellen was asked about the likelihood of another financial crisis. And you may not believe her response. As financial-news network CNBC reported (emphasis added)...
We suspect she'll regret those words... Central banks have created the largest speculative boom in history.
Unlike the last, this bubble isn't concentrated in a single area like U.S. housing. It has spread to nearly every corner of the developed world. Consumers... corporations... and even governments have loaded up on record amounts of debt.
Another crisis is inevitable.
In the meantime, our colleague Steve Sjuggerud believes stocks can still go much higher before it arrives...
As regular readers know, Steve has long predicted that a "Melt Up" will push stocks to explosive new highs before the bull market finally ends.
But Steve says it's no longer a "what if" scenario. He believes the Melt Up has already started… And on Thursday, he hosted a free event with Stansberry Research founder Porter Stansberry to share an important update on this situation...
In short, Steve said we're closer to the end of this bull market than he initially believed. He and Porter now agree it could be just a matter of months before it peaks... and the way you position your money in the days and weeks ahead could dramatically change your financial future. Steve even shared the name and ticker symbol of his favorite way to profit as the Melt Up continues.
If you couldn't make it to this week's event, you're in luck. You can still access a full replay and hear Steve's urgent update for yourself. Click here to see it now.
Regards,
Justin Brill
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