Perhaps you’ve seen the 2015 movie or read the book The Big Short by Michael Lewis about the financial crisis of 2007–2008, which was triggered by the build-up of the housing market and the economic bubble.
If you missed it, here’s what happened…
In 2005, eccentric hedge fund manager Michael Burry, (played by Christian Bale in the movie) discovers that the U.S. housing market is really just a bubble based on unstable high risk subprime loans. Burry believes that the bubble will burst sometime in the second quarter of 2007, so he looks for a way to profit from the coming crash. To do so he creates a credit default swap market, which allows him to bet against the housing market. He visits several major banks and investment houses offering them the other side of this trade. These firms believe that the housing market is secure and therefore the trade is easy money for them, so they accept his proposal.
As long as the bubble endures, his trades are losing money, the loses anger Burry’s clients who demand that he stop his activities, but he refuses. As the predicted time of the collapse approaches, his investors lose all confidence and try to pull their money out. But Burry is convinced that he is right so he places limitations on withdrawals. This further angers his investors and sets the stage for an epic battle of wills. Eventually, the market collapses just as he predicted and he produces massive profits for those who held on.
Of course most people were like Burry’s investors and didn’t see the crash coming… so they ended up with massive losses in the biggest financial meltdown since the Great Depression.
Well, Wall Street has done it again and today I’m writing to warn you about a hot new financial instrument backed by derivatives that has taken Wall Street by storm. And the aftermath may be just as devastating to investors who are unprepared.
Just like the Early 2000’s
When Elliott Wave warned their subscribers about the risk in the subprime mortgage market in the early 2000s, few investors knew what it was, much less how their portfolios were dangerously exposed. Now, thanks to the real estate meltdown and popular films like The Big Short, “subprime” is a household term. Same goes for creative financial instruments like collateralized debt obligations (CDO’s), credit default swaps and other “derivatives”. But there’s a hot new derivative on the market you might not have heard of — at least not yet. Why? Because, well, it hasn’t blown up yet. But like the subprime market and CDOs, it too is on a path for infamy.
Catch a Falling Knife
Our friends at Elliott Wave International, just released a special report on three important (but relatively unheeded) indicators that their analysts believe deserve close watching. These indicators are moving lightning fast, so if you want to get ahead, this is your opportunity.
Their new 3-page report gives you direct access to EWI’s premium-level charts, forecasts and analysis — at no cost — exclusively through the link below.
So please take five minutes to check out this revealing new report. For the sheep who are unprepared, the grave financial risk it outlines spell a shearing in the making. But for the savvy investors who have the advantage of this exclusive information, these insights spell once-in-a-lifetime opportunity. The difference between massive opportunity and catastrophic loss, is really just a matter of timing… which is why we are warning you right now, because if EWI’s analysts are right again this time, before you know it… the tide will have turned and it will be too late.