What Just Happened and What We Don't Know

So the big story last week was stocks: They tumbled. 

"Tumbled" = almost 6%. January's not starting out great for stocks.

Other assets didn't jump or fall all that much.  

That's what we know. That's what happened. Here's what we don't know:

Are we watching the beginning of a full-fledged Bear Market unfold? We don't know. But we should consider the possibility.

In 2007-2009 - the last Bear Market in stocks - the general market crashed in a short period of time: mostly the fall of 2008. But the big drops came fast and furious when they came.There was a plenty of lead-up. After the fall 2008 crash, there was a run-up, then an "exhaustion" fall. 

The shock of the stock market drop hammered most other assets. Bonds provided a cushion; everything else pretty much withered. The leverage that drove the market up caused margin calls a-plenty. When the margin calls came in, investors who were leveraged had to sell whatever they had that could bring in some cash. That "whatever" included precious metals, including bullion and mining shares. 

In 2000-2002, the Bear fall was more evenly spread out: 2000 - down; 2001 - down; 2002 - down. It was something like the drip-drip-drip of a kind of Chinese water torture. Each year stocks fell, the "experts" predicted the next year would see stocks rise 10% or so...for three years in a row. By the end of 2002, people were stunned. Professional advisors  - not all, but many, especially the Wall Street houses - were like deer in the headlights. They stared for three years and were run over three times. 

The pain of 2007-2009 was much more concentrated. The pain of 2000-2002 was spread out. I don't know which one is preferable. Neither, of course. But if you had a choice, what would it be?

Frankly, it doesn't matter. When Bears come out of the cave, they're hungry. And they go for what's available. Sometimes they gorge (2008); sometimes they sit down at stay for a long, luscious banquet (2000-2002).

When Bear Markets begin, most folks don't know it. The Bear Market that began in 2007 was unnamed until the 2008 crash. The Bear Market that began in 2000 was a "correction" until - well, I'm not sure when it dawned on folks that this wasn't going to be "buy the dip" phenomenon. It took some time.

Which brings us to 2022, the month of January to be specific. Is this the start of a longer-term Bear Market - or just a correction to wring out the "excessive" rise of 2021? We can't know for sure. But various sectors are moz def in a Bear territory. And if this is a Bear, other sectors will follow in time. But that following could take a while. 

You do what you want, but we wouldn't buy dips here.

The other thing that happened was a big - BIG - jump in Gold and the precious metals. But same story: We don't know if this is going to kick off the resumption of what we believe is long-term Bull Market in Gold and PMs. While we may not buy on Monday, we are getting ready to add to our current holdings. 

Stocks: no; PMs: yes.

There's another area where stuff is happening. It's the C-Virus Mess that's given our economy a whuppin', knocked out millions of Americans from their jobs, and divided our society into vaxxed/un-vaxxed. What's happening is the facts aren't lining up with the story that has been force-fed on us by our "leaders" and their minions in the media. The facts emerging more and more tell us that the vaccines haven't done what they promised. Indeed, the facts more and more tells us those vaccines may be more dangerous than the C-virus. 

If you're not sure what we're talking about, we suggest you take some time to get up to speed. If the facts continue to line up as they seem to be lining up, it would make sense for all those policies that push vaccines, vaccine passes, et al to be eschewed by those who have propagated them. 

I wouldn't hold my breath; but if there's a smidge of rationality left in our society, we should see something that tells us that reality really is real; that what has been referred to as the "Narrative" is falling apart. 

We don't know if that will happen. But it should.