I went down Virginia, seeking shelter from the storm.
– Creedence Clearwater Revival
BALTIMORE – We rushed down to Virginia last week with the sound of an angel band playing in the background.
Mother was on her last breath… ready to give up the ghost at any minute.
But she surprised us again.
“Am I dead yet?” she asked, regaining consciousness.
“No… not yet,” we replied.
Not only was she not dead, she was also very much alive. Unable to move… breathing only with the help of an oxygen concentrator… and eating nothing but Jell-O, she was nevertheless sharp and irrepressibly pleasant.
So we go on with our lives… knowing the phone could ring at any minute.
Battle for Gualfin
Of course, the phone could ring for any of us at any time.
So could the bell toll for the stock market… or the economy… or anything.
Every person, every bull market, every boom, and every empire – we all live with a death sentence hanging over us. We just don’t know when it will be carried out.
And since we’re updating readers on personal matters, we will include a brief note from our ranch in Argentina.
There, the Battle for Gualfin has settled down.
As you will recall, some of the locals challenged our land title. They blocked our road. We called the police to re-establish order.
We bought the land from the previous owner… who had held it for about 60 years after buying it from the owner before him. For 300 years, the chain of title was unbroken.
But the originarios – the local indigenous people claiming title to our ranch – say it ought to be theirs, invoking some indigenous property rights that have never been clarified.
In broad theory, if their claim were accepted, all of America – north and south – would have to go back to the descendants of the natives who were there when Christopher Columbus arrived.
But now… both sides in the struggle have something more immediate and more dangerous to worry about: a common enemy more unforgiving than either the leftist originarios who want to take the land by political force or its legal owner, your editor, who – perhaps against his own interests – struggles to hold on to it.
Our mutual enemy is drought.
Last year, the ranch got only about 2.3 inches of rain.
This year, so far, we have gotten about 4 inches. And the rainy season is over. There is little likelihood of any further rain in the Calchaquí Valleys this year.
Cometh this word from our lawyer:
It’s not just us. The whole valley is nearly a disaster zone. We’re barely able to water the grapes. The wine will be good. [The quality tends to vary inversely with the amount of water available to the grapes… to a point.] But there won’t be much of it. And there is just not enough rain to sustain the cattle anywhere. We’ve already taken most of our cattle down lower in the valley where there was more grass. But even that is giving out. I don’t know what we will do for the rest of the year.
The last major drought hit more than 30 years ago. Then, with nowhere to take the cows and no way to get them there, more than 2,000 head died on our ranch.
Now we seem to be approaching another bovine holocaust.
We are headed down there at the end of next month. In the meantime, ojalá que llueva – we hope to God for a freak rainstorm.
Nature can be fearsome. Sometimes, it refuses to rain. Other times, it won’t stop.
A brother-in-law described a disaster in the Appalachians.
“We were building a new church,” he began in his soft southern accent while we were vising Mother in Virginia.
“We didn’t know how we could afford the big stained-glass window over the altar. But when we dedicated it to the victims of The Flood, the money just rolled in.”
In Nelson County, Virginia, “The Flood” does not refer to the inundation in which Noah saved humanity.
It recalls the wall of water that came down the Tye, Rockfish, Hardware, and James rivers, washing away dozens of houses, cars, trees, and boulders… and swamping others under 20 feet of mud.
“It was terrible,” our brother-in-law, a retired preacher, continued. “It was Hurricane Camille. We knew it was going to rain. But we had no warning about what would happen.
“When we dedicated the window, we had one of the survivors come and talk to the congregation. She described how she was in her house in the middle of the night when suddenly water came through the door.
“It rose so fast that she and her daughter had no chance to get away. The last she saw of her daughter, who was 16 years old at the time, she was on top of a refrigerator that was floating in the living room.
“The mother survived, she told us, by just floating on the tide of water down the river. She said she just put her faith in God… and said, ‘God, do with me what you want.’ Then she grabbed hold of a tree and stayed there.
“She was still up in the tree, naked – all of her clothes had been stripped away by the force of the water – when rescuers heard her calling the next day.
“Other people weren’t so lucky. Her daughter’s body was never found.
“And there was a blind boy who lived down in the little town. His father took him up the hill – it was the middle of the night – and told him to stay there holding on to a tree.
“The father went back into town to try to help other people trapped in their houses. The boy survived. The father was never seen again.”
The eastern slopes of the Blue Ridge Mountains got 27 inches of rain on the night of August 19, 1969. In all, some 150 people died.
BY JEFF CLARK, EDITOR, DELTA REPORT
Editor’s Note: Today, options trader Jeff Clark says the warning signs are flashing much like they did before the 2008 crisis… and it’s time to prepare.
You’re going to think I’m nuts.
After all, who in their right mind warns about a stock market crash when stocks are trading at all-time highs? The stock market is in a powerful uptrend. The bull has been running for eight years. Stocks just keep pushing higher.
So I can’t blame you for thinking I’m crazy.
But here’s the thing…
A lot of folks thought I was crazy in January 2008 when I told subscribers the stock market had turned bearish. I advised taking profits, tightening stops on positions, and making a few trades from the short side.
By December 2008, we were in a full-blown financial crisis. The S&P 500 had lost more than 40%. Billions of dollars had been wiped out. And I had the best year of my career.
I recommended 15 trades that earned 100% or better. We traded profitably from both the long and short sides of the market. We took advantage of the volatility. And we were able to do all this because we saw the crisis developing ahead of time. We were prepared to act.
The stock market in 2017 is starting to look a lot like it did heading into 2008. Warning signs are flashing, and it’s time to start thinking about turning cautious on stocks.
Don’t get me wrong. We’re not in “crisis mode” yet. The party is still rocking. But you might want to start dancing a little closer to the exits.
Throughout history, there have been three warning signs that precede nearly every market collapse. We saw them before both the 2008 global financial crisis and the 2000 dot-com bubble.
And we’re seeing two of these warning signs today…
The first is a sharp and sudden rise in interest rates.
Prior to the stock market making an important long-term top, the 10-year Treasury note yield has ALWAYS spiked higher.
For example, the 10-year yield was just 4.5% in January 1999. One year later, it was 6.75% – a spike of 50%. The dot-com bubble popped two months later.
In 2007, rates bottomed in March at 4.5%. By July, they had risen to 5.5% – a 22% increase in just four months. The stock market peaked in September.
Here’s how the 10-year Treasury note yield looks today…
The 10-year yield bottomed at 1.35% last July. By December, it had spiked above 2.5%. That’s a remarkable 85% increase in five months.
So the interest rate signal is FLASHING bright red.
Along with a spike in interest rates, we’re also seeing a record amount of stock purchased on margin. This is the second warning sign.
The stock market tends to form important tops around the same time that margin debt peaks. In other words, just as investors have borrowed the most money to buy stocks in the stock market, the market starts to fall.
Here’s a look at the history of peak margin debt and how it lined up with a top in the stock market…
Margin debt hit a high of more than $500 billion in November… And the stock market rallied to a new all-time high this month.
So we now have two warning signs of a top in the market. It’s time to worry. But it’s not time to panic yet.
You see, you can’t turn bearish until the third warning sign flashes.
I’ll tell you about the third warning sign tomorrow.
– Jeff Clark
Editor’s Note: If you don’t want to wait until tomorrow, you can find out about Jeff’s third warning sign right here in his emergency briefing. Jeff has already showed thousands of your fellow Diary readers how to profit in any market.
This free briefing – “How to Profit Before and After the Coming Downturn” – is only available until midnight tonight. So don’t miss your chance to hear Jeff explain the secret to his highly successful trading strategy.
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Yesterday, Bill asked: “Will the Establishment stab Trump in the back?”
Here are some of your responses…
You need to connect Trump’s attack on the mainstream media and the draining of The Swamp – these are not two things, but one.
Mainstream media is deep in The Swamp, generating lots of fake news that will continue to stymie Trump’s swamp-draining. But it must be done! To drain The Swamp, he must continue to attack on all swamp-fronts: mainstream media, government bureaucracy, military-industrial complex, healthcare, education, globalization, etc.
– Dan S.
One thing the swamp critters do is battle among themselves for some kind of supremacy. The battles seldom make the headlines, except as news that so-and-so is taking over somebody else, or maybe getting taken over.
Mr. Trump is a would-be master swamp critter. But he is in for the fight of his life, and the outcome is certainly up for grabs. If I had to bet on a winner I’d put the best odds on Goldman Sachs. It seems to have already infiltrated the government agencies that the new president is counting on for his power. DJT seems as much a longshot as he did last November… Oops!
– Chuck B.
You are fast running out of enemies that want to stab our beloved Donald in the back. We’ve gone through the swamp critters, the military-industrial complex, the Deep State, the Democrats, the main stream press, Russia, China, European heads of state… and finally, the most important, the president of the Philippines.
At this rate we will soon have the presidents from Mars and Venus attacking our hero. Who knows! Donald may just skip running for a second term and run for emperor of the Universe. By the way, Bill, please don’t compare our major league hero to a bush leaguer like Juan Perón. You are above that.
– Ken D.
And, finally, this from a reader who’s been watching Bill’s daughter in her new TV role…
My wife records the Scorpion TV series, which we finally watched last night. Your daughter Mariah Bonner played an interesting character quite well. We also met a couple of your sons a few years ago in Vancouver. You have every reason to be very proud of your family.
– Tex N.