Editor’s Note: Today’s essay, from our subscriber-only B&P Briefing, generated a lot of interest with readers.

It’s about a major top in US stocks that Bonner & Partners senior analyst Braden Copeland sees coming.

Braden calls it the “Great Wave.”

And he reckons that when it crashes… it will be even more deadly than the previous crashes in 1987, 2000… and even 2008.

A “Great Wave” Is Coming

By Chris Hunter, Editor, B&P Briefing

*** Today… a warning from colleague Braden Copeland about a top in US stocks. He calls it the “Great Wave.”

Braden reckons that when the US stock market crashes, it is likely to crash hard – maybe even harder than in 1987, 2000 and 2008.

Will it crash within a month or two? This year? Next year? It’s impossible to know. But when the next crash comes, Braden believes few financial assets will be spared.

*** One indicator Braden is watching closely is a rise in insider selling:

Last month, insider sales of stock (corporate executives selling shares in the companies they work for) outnumbered insider buys 33 to 1.

That’s worth repeating. For every insider buying shares in his own company, there are 33 insiders trying to dump their own shares on someone else. Considering that a ratio as low as 7-to-1 is viewed by some as the bearish threshold, it’s safe to say this number is clearly in bearish territory.

If the market is just going to keep on rising… wouldn’t they be buying shares to take advantage of such a sweet deal? Or wouldn’t the ratio be at least a little less lopsided? These are corporate execs we’re talking about here… They’re not selling stock to put food on the table.

*** Please understand: Braden’s no “doom and gloomer.” He’s a successful entrepreneur. (Among other things, he’s owned his own stock-car race team and produced a Grammy-nominated country album that sold more than 2 million copies.)

And as you know, to be an entrepreneur, you can’t be a doom and gloomer. You have to be opportunistic and able to recognize great values when you see them. That’s what Braden has done throughout his career… and it’s the approach he takes in his advisory, Braden Copeland’sBuilding Wealth.

So, if Braden is wary of this market, it’s worth paying attention to. Which is why I encourage you to check out the special report he’s put together on the “Great Wave” he sees coming.

*** One thing is for sure: It’s a time for caution. This is an economy headed deep into dangerous territory.

This week, for instance, investors bought five-year German bonds at a negative yield for the first time ever. The bonds carry an annual yield of MINUS 0.8%. And investors plowed €3 billion ($3.4 billion) into them.

These investors are paying for the privilege of lending money to the German government. They’re also accepting a guaranteed loss on their investment if they hold the bonds to maturity. In other words, the total of capital repayment and interest payments adds up to less than the purchase price of the bond.

*** It’s not just German government bonds that carry a negative yield. From the Financial Times:

Once a rare phenomenon, such securities are becoming more common. The universe of negative yielding bonds in Europe has ballooned from $20 billion to $2 trillion in less than a year, according to JP Morgan.

Five-year debt issued by countries such as Denmark, Finland, the Netherlands and Austria all trade at negative rates, while corporate debt issued by companies such as Nestlé and Shell has also traded in negative territory.

*** Why are so many sophisticated investors willing to accept guaranteed losses in return for keeping the bulk of their capital intact?

It’s a question I put to Bill’s friend Richard Duncan. If you don’t already know him, Richard is an economist and the author of The Dollar Crisis and The New Depression – two of our favorite reference books on the post-1971 fiat money system.

Richard told me it’s because the global economy is much more fragile than most people realize:

The global economy is very weak. The weak US recovery has been built on QE pushing up household sector net worth (through higher stock prices and property prices). If the Fed does increase interest rates, it would cause stocks, property and net worth to fall. And that would cause a new recession.

The Fed wants the world to believe that the global economy really is getting stronger fundamentally. But the Fed is not so sure that it is.

*** US stock market fundamentals are also a cause for concern. Not only are valuations stretched (something we’ve covered in detail here), but also earnings growth is weak.

According to FactSet, S&P 500 earnings are expected to grow at just 3% in 2015. That’s less than half the growth rate analysts forecasted at the start of the year.

*** Scott Krisiloff at Avondale Asset Management dug into the data and found that, since 1900, S&P 500 earnings have grown by less than 5% in 53 years. He also found that the S&P 500 closed higher for the year in 33 out of those 53 years despite sluggish earnings.

Not so bad…

The problem is that starting conditions in most of the years when the S&P 500 rose on weak earnings were very different from today. From Krisiloff:

Of these 33 years, the S&P 500 was negative 14 times in the previous year (implying that stocks had discounted the negative earnings growth the year before).

Additionally, the average P/E multiple was only 11.6 in all years, meaning that even though earnings didn’t rise, the index was usually cheap.

*** Today, US corporate earnings are weak. The S&P 500 is coming off of a 13% rise for 2014. And it trades on a P/E multiple of 19.2 – almost double the 11.6 average in the 33 years when it rose on weak earnings.