Bankers Decry: "Keep Calm and Sell Everything!"

Here it comes!  The financial disaster that market watchers have warned us about for the past 5 years is fast approaching, 2016 could be a rock and roll year.

RBS has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.

The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.

Andrew Roberts, the bank’s research chief for European economics and rates, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs.

All eyes are on China. 

Source:

http://www.telegraph.co.uk/finance/economics/12093807/RBS-cries-sell-everything-as-deflationary-crisis-nears.html

Financial Markets Quake Before Anticipated Collapse

Prior to the housing bubble implosion, prescient prognosticators were predicting an economic disaster the world hadn’t seen since the Great Depression.  Pollyannaish investors thought the sky was the limit.  Many thought there was no end to rising property values.  Boy, were they wrong.

We are in the throes of another pending disaster, one that will make 2008 look benign by comparison.  Yesterday, the rumblings of a financial crisis shook the world’s financial markets.  The Economic Collapse blog reported the following:

The first trading day of 2016 was full of chaos and panic.  It started in Asia where the Nikkei was down 582 points, Hong Kong was down 587 points, and Chinese markets experienced an emergency shutdown after the CSI 300 tumbled 7 percent.  When European markets opened, the nightmare continued.  The DAX was down 459 points, and European stocks overall had their worst start to a year ever.  In the U.S., it looked like we were on course for a truly historic day as well.  The Dow Jones Industrial Average was down 467 points at one stage, but some very mysterious late day buying activity helped trim the loss to just 276 points at the close of the market.  The sudden market turmoil caught many by surprise, but it shouldn’t have.  The truth is that a whole host of leading indicators have been telling us that this is exactly what should be happening.  The global financial crisis that began in 2015 is now accelerating, and my regular readers already know precisely what is coming next.

And in case anyone believes this was just a blip, take into consideration what is happening in South Korea. 

 This is yet another sign that tells us that the U.S. economy has already entered the next recession.

And what happens to the markets during a recession?

They go down.

In addition to the bad data that we got from the U.S. and China, there was another number that was also extremely troubling.

South Korean exports have traditionally been considered a key leading indicator for the entire global economy, and on Monday we learned that they were down a whopping 13.8 percent in December from a year earlier…

We can expect volatility in the markets from here on out, until the bottom finally falls out.

Source:

http://theeconomiccollapseblog.com/archives/stock-markets-all-over-the-world-crash-as-we-begin-2016

China's Currency Devaluation More Than a Market Correction

Communist China devalued the yuan in what they say is a onetime event designed to make their currency more market oriented.  Economists are concerned about more than that.

Many economists said the decline was too small to help Chinese exports due to weak global demand. But the change fueled concern the yuan might fall further, giving Chinese traders a price advantage over foreign rivals and possibly igniting a “currency war” if other governments fight back by depressing their own exchange rates.

Economist Albert Edwards with the French bank Societe Generale had strong words along these lines.

“Make no mistake, this is the start of something big, something ugly,” Edwards told the Guardian, adding that he believes the devaluation could result in a “a tidal wave of deflation” across the world.

 Many believe China’s devaluation is more of a play to become one of the IMF’s reserve currencies along with the dollar, euro, yen, and British pound rather than a market correction.  This could get real interesting.

Source:

http://www.theblaze.com/stories/2015/08/13/why-some-economists-think-chinas-currency-devaluation-could-be-the-start-of-something-big-something-ugly/

Catastrophic Market Correction Predicted in Fall 2015

Market watchers are jittery.  All indicators are portending a monumental meltdown that could possibly begin in September or October.  Here is an excerpt from The Economic Collapse:

What I am about to share with you is quite stunning.  A well-respected financial expert that correctly predicted the last two stock market crashes is now warning that we are right on the verge of the next one.  John Hussman is a former professor of economics and international finance at the University of Michigan, and the information in his latest weekly market comment is staggering.  Since 1970, there have only been a handful of times when a combination of market signals that Hussman uses have indicated that a major market peak has been reached.  In 1972, 2000 and 2007 each of those peaks was followed by a dramatic stock market crash.  Now, for the first time since the last financial crisis, all four of those signals appeared once again during the week of July 17th.  If Hussman’s analysis is correct, this could very well mean that the next great stock market crash in the United States is imminent.

What could that ultimately mean?  Here is a disturbing prediction:

 The answer to this could end up being worth at least $2.2 trillion, which is how much money would essentially be wiped out of the stock market if we finally get the much-discussed 10% correction in the overall market (the total U.S. stock market capitalization was $22.5 trillion as of June 30, according to the Center for Research in Security Prices).

Wow.

World DebtorsTime to Pay the Ferryman

The collapse of the 2008 housing bubble will have nothing on the coming world debt implosion.  No one, except unknown isolated tribes in a South American rainforest, will escape the reverberations of this economic tsunami.

Governments and central banks have been whistling pass the graveyard for far too long.  The ferryman has been keeping a ledger and charging compound interest; soon, he’ll demand all debts be paid.

Charon is watching the Grecian debt dance and askance at over 24 other countries in similar circumstances with another 14 more on the verge.  Who’s going to pay their ferry?  Certainly not the United States, China or Japan; they’re got their own insurmountable debt mountain. 

The Economic Collapse blog has outlined the coming debt storm:

Of course the same thing could be said about the entire planet.  Yes, national governments and central banks have been attempting to kick the can down the road for as long as possible, but everyone knows that this is not going to end well.

And when things do really start falling apart, it will be unlike anything that we have ever seen before.  Just consider what Egon von Greyerz recently told King World News…

Eric, there are now more problem areas in the world, rather than stable situations. No major nation in the West can repay its debts. The same is true for Japan and most of the emerging markets. Europe is a failed experiment for socialism and deficit spending. China is a massive bubble, in terms of its stock markets, property markets and shadow banking system. Japan is also a basket case and the U.S. is the most indebted country in the world and has lived above its means for over 50 years.

So we will see twin $200 trillion debt and $1.5 quadrillion derivatives implosions. That will lead to the most historic wealth destruction ever in global stock, with bond and property markets declining at least 75 – 95 percent. World trade will also contract dramatically and we will see massive hardship across the globe

Source:

 http://theeconomiccollapseblog.com/archives/the-bankruptcy-of-the-planet-accelerates-24-nations-are-currently-facing-a-debt-crisis

Bank of America Takes Fall for Fannie Mae and Freddie Mac

If Obamacare isn’t enough of a demonstration of the incompetence of the federal government, we have Fannie Mae and Freddie Mac stepping up to the plate once again.  These corrupt organizations have sued Bank of America for fraud and have won.  This is theater of the absurd.

 

Must we remind everyone that it was Democratic operatives who ran these government sponsored entities.  It was scoundrels like James Johnson who brokered deals with Countrywide that brought about this whole housing crisis.  Here is a quote from the book Reckless Endangerment that sums up the relationship between Fannie Mae and Countrywide:

It was no coincidence that Countrywide’s operations were so intertwined with Fannie Mae’s and so similar.  Both companies had the same goals to achieve and the same enemies to defeat.  And for years, Mozilo’s friendship with Johnson had given him a front-row seat for the Fannie Mae way – the deep political focus, the co-opting of regulators, the manipulation of public opinion, and extensive granting of to friends and potential foes.

It’s tragic enough that players like Angelo Mozilo and James Johnson, the two players who almost destroyed the U.S. economy, was able to walk away scot free, now Bank of America has to pay the price for Fannie Mae and Countrywide’s sins. And let’s not forget the accusations that the Federal Reserve and Treasury Department threatened then CEO Ken Lewis if he didn’t make the deal.

But hey, let’s have the government takeover our health care system.  What could possibly go wrong?

Source:

 http://www.charlotteobserver.com/2013/10/23/4409511/jury-finds-bofas-countrywide-liable.html#.Ummji_lJO7N

http://www.amazon.com/Reckless-Endangerment-Outsized-Corruption-Financial/dp/B00B2RTQUU

http://dealbook.nytimes.com/2013/10/23/jury-finds-bank-of-america-liable-in-mortgage-case-nicknamed-the-hustle/?_r=0

http://www.businessinsider.com/2009/2/did-the-government-force-bank-of-america-to-buy-merrill

Financial Calamity - It's Coming

H/T:  NC Renegade

Nigel Farage: America is not Responsible for European Financial Crisis

SEIU's Grecian Formula

Here is the union thug who would lead us down the road to Greece. Andy Stern would be the one to light the torch and burn down our institutions and way of life.

As of now government workers make more than those of us in the private sector. And here is what happens when these government workers and union thugs don't get their way:




Buyer Beware!!

World Wary Of Coming U.S. Financial Meltdown

Senator Judd Gregg warns of a coming financial meltdown of the U.S. economy. He expects this crisis to hit in 5 to 7 years. The signs are all there. Since Obama took office, the dollar index has plunged 17%.

Several countries including China and Russia are calling for an alternative currency. Dominique Strauss-Kahn, the head of the International Monetary Fund, believes in time that an international currency will replace the U.S. dollar.

The world is apprehensive about the fiscal policies of the democrats. The stimulus package, along with bailouts of businesses, and attempted take over of the health care industry has raised eyebrows from those who buy America's debt.

Fannie Mae and Freddie Mac have received $111 billion in bailouts. That number is expected to increase to $188 billion by the fall of 2011. These two G.S.E.'s own or guarantee 31 million home loans worth $5.5 trillion. Freddie Mac revealed that 4% of their loans are 3 months past due, and could go into foreclosure. Fannie Mae is requesting an additional $15 billion, after reporting losses of $74 billion last year.

The U.S. dollar has been a refuge of certainty for the whole world. It was regarded as a safe investment. It looks like those days are coming to pass. Now will the world believe that the United States is too big to fail? Don't hold your breath.

source:
http://moneynews.com/StreetTalk/davidson-dollar-markets-aftershock/2010/02/25/id/350964?s=al&promo_code=9809-1

http://moneynews.com/StreetTalk/US-US-IMF-Reserve/2010/02/26/id/351082

http://moneynews.com/Headline/US-Earns-Fannie-Mae/2010/02/26/id/351102

Greece Loses E.U. Voting Rights

This is what needs to happen if California gets a bailout.


As reported by the U.K. Telegraph: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7252288/Greece-loses-EU-voting-power-in-blow-to-sovereignty.html

The council of EU finance ministers said Athens must comply with austerity demands by March 16 or lose control over its own tax and spend policies altogether. It if fails to do so, the EU will itself impose cuts under the draconian Article 126.9 of the Lisbon Treaty in what would amount to economic suzerainty.

While the symbolic move to suspend Greece of its voting rights at one meeting makes no practical difference, it marks a constitutional watershed and represents a crushing loss of sovereignty.

"We certainly won't let them off the hook," said Austria's finance minister, Josef Proll, echoing views shared by colleagues in Northern Europe. Some German officials have called for Greece to be denied a vote in all EU matter until it emerges from "receivership".

The EU has still refused to reveal details of how it might help Greece raise €30bn (£26bn) from global debt markets by the end of June. Investors are unsure whether this is part of Kabuki play of "constructive ambiguity" to pressure Greece and keep markets guessing, or reflects the deep reluctance by Germany to be drawn deeper in an EU fiscal union. Greek bonds sold off as ten-year yields jumped to 6.42pc, but the euro rallied to $1.3765 against the dollar as broader issues resurfaced in currency markets.

Jean-Claude Juncker, head of the Eurogroup, hinted that ministers have already agreed on a support mechanism, should it be necessary. It will most likely involve by bilateral aid by eurozone states. He said proposals for an IMF bailout - backed by Britain - were "absurd" and would shatter the credibility of monetary union.

Many Germans disagree, including Otmar Issing, once the backbone of the European Central Bank. He said an EU rescue for Greece would be fatal, arguing that unflinching rigour is the only way to hold monetary union together without political union.

Tuesday's EU verdict amounted to a thumbs down on Greece's earlier austerity efforts, viewed as too reliant on one-off measures and too light on spending cuts. Greece must reduce its deficit from 12.7pc of GDP to 3pc in three years. Greek customs officials expressed their anger by kicking off a three-day strike, the first of many stoppages set to culminate in a general strike next week.

However, premier George Papandreou has won support from key political parties and a majority of the people. Greece may yet surprise critics by mustering its Spartan Spirit.

Lessons To Learn From Greece

Greece’s financial woes should be a lesson to everyone. Instead of heeding the warnings of a meltdown in the European Union, the politicians in the United States are on an unprecedented spending spree. Government at the federal, state, and local levels expanded an astonishing 66% in just one year.

Greece has to make austere cuts in their budgets and the public sector employees are raising holy hell. Farmers who want more in subsidies have also joined the strikers.

The communist party once banned is now on the rise. They are capitalizing on the plight of government workers:

"It's a war against workers and we will answer with war, with constant struggles until this policy is overturned," Christos Katsiotis, a representative of a communist-party affiliated union, told the Associated Press.

Services are suspended such as non-essential health care as reported by the Guardian:

Non-urgent hospital appointments have been cancelled, and schools across Greece will remain closed. Air traffic control staff are also taking part in the dispute, meaning flights in and out of the country will be heavily disrupted. Greece's largest airline, Aegean, has suspended all its services, while British Airways has cancelled three scheduled flights from Heathrow to Athens.

Yeah we really want government health care when this can happen.

Without a responsible fiscal policy, Greece could get kicked out of the European Union. A Poll shows that 67% of Germans are against bailing them out.

This should be a lesson to all of the Keynesians on Capitol Hill. If you think China is going to put up with all your profligate spending and keep on buying our debt; you had better pay attention to what is happening over in Greece.

source:
http://www.reuters.com/article/idUSTRE61D0ZC20100214

http://www.guardian.co.uk/business/2010/feb/10/greek-workers-strike-eu-bailout