The Chinese Black Swan Has Arrived... Are You Ready?

The Chinese Black Swan Has Arrived... Are You Ready?

The market is a sea of red yesterday 

The issue at hand is China’s massive Evergrande property developer. The company is effectively insolvent, with over $300 billion in bad loans. Many are calling this “China’s Lehman Moment.”

The company’s stock is down 80% Year to Date.

How serious is this?

Serious.

Real estate comprises nearly 8% of China’s economy. Construction is another ~8%. So, all in all, you’re looking at 16% of the second largest economy in the world experiencing the bankruptcy of one of its largest players.

This has significant implications for everything from commodities (use in construction) to finance (the loans used to build the buildings and finance the mortgages for consumers).

And in these types of situations, there is never just one player at risk.

Contagion has already begun. Other Chinese construction/ real estate plays are collapsing. Hong Kong property developers and Chinese industrial producers are now getting hit.

And if you think this will be confined to China you are mistaken.

Australia supplies much of the commodities China uses for its construction. It is not coincidence that BHP Group (BHP) and other major Australian miners are nosediving, crashing 26% in the last few weeks.

And then there’s European banks, which have massive exposure to China. By the look of the bloodbath this morning, things are spreading to there as well.

This is the problem with an Everything Bubble: you never know where the Black Swan is going to come from.

With the financial system in the single largest bubble of all time, and leveraged to the hilt by easy debt courtesy of Central Bank policies, even a single spark can set the whole thing to blow.

So when does the crash hit?

To determine that I use my Bear Market Trigger.

If you’re unfamiliar with the Bear Market Trigger, it has caught every major bear market in the last 20+ years.

I’ve identified the previous signals on the chart below. Using this trigger you’d have avoided 90% of the carnage during the Tech Bust and the Great Financial Crisis of 2008.

We came close to triggering this signal during the 2020 meltdown, but managed to just avoid it by the fact that stocks closed April 2020 up. Had April been a down month we would have a confirmed signal.

How does this signal work? And is it close to triggering a new signal?

To find out, you’d need to take out a trial subscription to Verum Private Wealth Advisory (PWA).

A SIX (6) MONTH subscription to Verum Private Wealth Advisory includes:

If you find it's not what you're looking for, just drop us a line and we'll cancel your subscription. You won't pay another cent!

And the book, reports and ideas you collect during that time are yours to keep.

Frankly, this is a ridiculous amount of material to offer for just $300.00