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The Dow Has Fallen Nearly 1,500 Points From The Peak Of The Market, And Many Believe This “October Panic” Is Just Beginning…

The Dow Has Fallen Nearly 1,500 Points From The Peak Of The Market, And Many Believe This “October Panic” Is Just Beginning…

We haven’t had an October like this in a very long time.  The Dow Jones Industrial Average was down another 327 points on Thursday, and overall the Dow is now down close to 1,500 points from the peak of the market.  Unlike much of the rest of the world, it is still too early to say that the U.S. is facing a new “financial crisis”, but if stocks continue to plunge like this one won’t be too far away.  And as you will see below, many believe that what we have seen so far is just the start of a huge wave of selling.  Of course it would be extremely convenient for Democrats if stocks did crash, because it would give them a much better chance of doing well in the midterm elections.  This is the most heated midterm election season that I can ever remember, and what U.S. voters choose to do at the polls in November is going to have very serious implications for the immediate future of our country.

After a very brief rally earlier in the week, stocks have been getting hammered again.  The S&P 500 has now fallen for 9 out of the last 11 trading sessions, and homebuilder stocks have now fallen for 19 of the last 22 trading sessions.  It was a “sea of red” on Thursday, and some of the stocks that are widely considered to be “economic bellwethers” were among those that got hit the hardest

Several stocks seen as economic bellwethers fell sharply in the U.S., including United Rentals and Textron, which dropped at least 11 percent each. Snap-on and Caterpillar, meanwhile, fell 9.6 percent and 3.9 percent, respectively.

…click on the above link to read the rest of the article…

The Great Depression II

The Great Depression II

Whenever a movie has been a huge hit, the film industry tries to follow it up by doing a sequel. The sequel is almost invariably far more costly, as there’s the anticipation by those who create it that it will be an even bigger blockbuster than the original.

The Great Depression of the 1930’s is seen by most people to be the be-all and end-all of economic catastrophes and there’s good reason for that. Although the economic cycle has always existed, the period leading up to October 1929 was unusual, as those in the financial sector had become unusually creative.

Brokers encouraged people to buy into the stock market as heavily as they could afford to. When that business began to level off, they encouraged people to buy on margin. The idea was that the buyer would only put up a fraction of the money for the purchase and the broker would “guarantee” full payment to the seller. As a condition to the agreement, the buyer would have to relinquish to the broker the right to sell his stock at any point that he wished, should he feel the need to do so to get himself off the hook in the event of a significant economic change.

Both the buyer and the broker were buying stocks with money that neither one had. But the broker entered into the gamble so that he could charge commissions, which he would be paid immediately. The buyer entered into the gamble, as he had been promised by the broker that stocks were “going to the moon” and that he’d become rich.

Banks got into the game, as well. At one time, banks took money on deposit, then lent that money out at interest. They would always retain a percentage of the deposited money within the bank to assure that they could meet whatever the normal demand for withdrawals might be.

…click on the above link to read the rest of the article…

Saudi Arabia Considers Itself Untouchable Due to Oil and Money

Saudi Arabia Considers Itself Untouchable Due to Oil and Money

The roots of that lobby’s rise to prominence in Washington lie in the aftermath of the terrorist attacks of September 11, 2001. As you may remember, with 15 of those 19 suicidal hijackers being citizens of Saudi Arabia, it was hardly surprising that American public opinion had soured on the Kingdom. In response, the worried Saudi royals spent around $100 million over the next decade to improve such public perceptions and retain their influence in the U.S. capital. That lobbying facelift proved a success until, in 2015, relations soured with the Obama administration over the Iran nuclear deal. Once Donald Trump won the presidency, however, the Saudis saw an unparalleled opportunity and launched the equivalent of a full-court press, an aggressive campaign to woo the newly elected president and the Republican-led Congress, which, of course, cost real money.

As a result, the growth of Saudi lobbying operations would prove extraordinary. In 2016, according to FARA records, they reported spending just under $10 million on lobbying firms; in 2017, that number had nearly tripled to $27.3 million. And that’s just a baseline figure for a far larger operation to buy influence in Washington, since it doesn’t include considerable sums given to elite universities or think tanks like the Arab Gulf States Institute, the Middle East Institute, and the Center for Strategic and International Studies (to mention just a few of them).

– From the must read piece: The Saudi Lobby Juggernaut

It appears Saudi Arabia’s preparing to spin a tale about the murder of Jamal Khashoggi for the purpose of providing Donald Trump with cover to pretend nothing happened and get back to business as usual. Apparently, the Saudis plan to claim he was killed by rogue agents in a botched interrogation. No word about why it took them two weeks to admit this, why they blatantly lied about him leaving consulate and whether or not the body was hacked into pieces with a bone saw.

…click on the above link to read the rest of the article…

Australia Turning Really Authoritative? Is this How a Dark Age Begins?

The greed of governments in their pursuit of money is the single greatest threat to creating a Dark Age. With New Zealand imposing a $5,000 fine for just landing there and you refuse to hand over your pen and passwords to your phone for them to search, now we have Australia going really nuts to the point that they risk tech companies simply banning the sale of their products in the country. The Assistance and Access Bill 2018 in Australia will force Google, Apple, Facebook, and other technology groups to help Australian authorities decode certain forms of encrypted communications on their systems, or face fines of up to AU$10 million. The government says the legislation will help protect against terrorism, fraud and child abuse crimes, claiming it aims to ensure criminals “have no place to hide.”

The problem that arises that failure to pay taxes they also call criminal. Hence, the hunt for money is greatly aided by this type of legislation far more than any other pretend criminal activity. While the government has stopped short of demanding backdoor access to tech companies’ systems that would allow the government to tap into end-to-end encryption services such as WhatsApp, it doesdemand access to data at “points where it is not encrypted.”

Apple, FOR INSTANCE,  would not be made to create a backdoor for their iMessage where every user’s encryption key is different. But the government could request access to the single encryption key for its iCloud services. When you send a message to a friend, it’s encrypted as it travels between the two devices, and when it arrives, it’s decrypted for your friend to read, which is when the government should get to read it. The Australian government is cleverly demanding not a backdoor, but a “side door” to gain access to whatever people are sending.

…click on the above link to read the rest of the article…

Global Markets Continue To Fall As Bloomberg Warns “The Next Financial Crisis Is Staring Us In The Face”…

Global Markets Continue To Fall As Bloomberg Warns “The Next Financial Crisis Is Staring Us In The Face”…

It looks like it could be another tough week for global financial markets.  As the week began, markets were down all over the world, and relations between the United States and Saudi Arabia have taken a sudden turn for the worse.  That could potentially mean much, much higher oil prices, and needless to say that would be a very bad thing for the U.S. economy.  It has really surprised many of us how dramatically events have begun to accelerate here in the month of October, and the mood on Wall Street has taken a decidedly negative turn.  Yes, U.S. stocks did bounce back a bit on Friday (as I correctly anticipated), but it was much less of a bounce than many investors were hoping for.  And this week got off to a rough start with all of the major markets in Asia down significantly

In the Greater China region, the Hang Seng index in Hong Kong fell by around 0.9 percent in early trade. The Shanghai composite also slipped by 0.33 percent while the Shenzhen composite bucked the overall trend to edge up by 0.4 percent.

In Japan, the Nikkei 225 fell by 1.48 percent in morning trade, while the Topix index slipped by 1.17 percent, with most sectors trending lower.

But what happened in Asia was nothing compared to what we witnessed in Saudi Arabia.

At one point the stock market in Saudi Arabia had plummeted 7 percent after news broke that President Trump warned that the Saudis could face “severe punishment” for the disappearance of journalist Jamal Khashoggi.

The Saudis are denying doing anything wrong, but everyone agrees that he is missing, and everyone agrees that he was last spotted entering the Saudi Consulate in Istanbul on October 2nd.

And it is being reported that U.S. intelligence had previously intercepted communications which indicated that the Saudis planned to abduct Khashoggi.

It is believed that Khashoggi was dismembered after being abducted by the Saudis, and all of the major western powers have expressed major concern about his fate.  But the Saudis insist that they didn’t have anything to do with his disappearance, and they are threatening “greater action” if any sanctions are imposed upon them.  The following comes from USA Today

4 Pillars of Debt in Danger of Collapse

Last month I was in a series of high-level meetings with members of Congress and the Senate in Washington.

While there’s been major news about the Supreme Court, my discussions were on something that both sides of the aisle are coming to consensus over.

You see, issues that impact your own bottom line are way more about economics than they are about politics. On Capitol Hill, leaders know that. They also know that voters react to what impacts their money. That’s why, behind the scenes, I’ve been discussing issues focused on protecting the economy.

Behind closed doors, we’ve been working on how to shield the economy from Too Big to Fail banks and how the U.S. can better fund infrastructure projects. These are initiatives that all politicians should care about.

Underneath the surface of the economy is a financial system that is heavily influenced by the Federal Reserve. That’s why political figures and the media alike have all tried to understand what direction the system is headed.

Also last week I joined Fox Business at their headquarters to discuss the economy, the Fed and what they all mean for the markets. On camera, we discussed this week’s Federal Reserve meeting and the likely outcomes.

Off camera, we jumped into a similar discussion that those in DC have pressed me on. Charles Payne, the Fox host, asked me what I thought of new Fed chairman, Jerome Powell, in general. Payne knew that I view the entire central bank system as a massive artificial bank and market stimulant.

What I told him is that Powell actually has a good sense of balance in terms of what he does with rates, and the size of the Fed’s book. He understands the repercussion that moving rates too much, too quickly, or selling off the assets, could have on the global economy and the markets.

…click on the above link to read the rest of the article…

Why Is The Media Warning A Recession Is Expected “By The End Of 2020” That Will Be “Worse Than The Great Depression”?

Why Is The Media Warning A Recession Is Expected “By The End Of 2020” That Will Be “Worse Than The Great Depression”?

The mood of the mainstream media is really starting to shift dramatically.  At one time they seemed determined to convince all of us that happy days were here again for the U.S. economy, but now some mainstream news outlets are openly warning that the next recession will be “worse than the Great Depression”.  Do they really believe that this is true, or is there some other purpose behind their bold headlines?  Of course it isn’t exactly difficult to predict that another recession is coming, because the U.S. economy has experienced recession after recession ever since the Federal Reserve was first established in 1913.  But the phrase “worse than the Great Depression” implies that what we will soon be facing will be the worst economic downturn in all of U.S. history.  That is a very bold statement to make, and it should not be done lightly.

That is why I have been absolutely astounded by some of the mainstream headlines that I have been seeing lately.  For example, the following comes from a New York Post article entitled “Next crash will be ‘worse than the Great Depression’: experts”

“We think the major economies are on the cusp of this turning into the worst recession we have seen in 10 years,”said Murray Gunn, head of global research at Elliott Wave International.

And in a note, he added: “Should the [US] economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”

And here is an excerpt from an article posted on MSN entitled “Experts warn the next recession will be ‘worse than the Great Depression’ and predict it will hit US within two years as $247 trillion global debt outdoes 2008”

…click on the above link to read the rest of the article…

Why Is The Media Warning A Recession Is Expected “By The End Of 2020” That Will Be “Worse Than The Great Depression”?

Why Is The Media Warning A Recession Is Expected “By The End Of 2020” That Will Be “Worse Than The Great Depression”?

The mood of the mainstream media is really starting to shift dramatically.  At one time they seemed determined to convince all of us that happy days were here again for the U.S. economy, but now some mainstream news outlets are openly warning that the next recession will be “worse than the Great Depression”.  Do they really believe that this is true, or is there some other purpose behind their bold headlines?  Of course it isn’t exactly difficult to predict that another recession is coming, because the U.S. economy has experienced recession after recession ever since the Federal Reserve was first established in 1913.  But the phrase “worse than the Great Depression” implies that what we will soon be facing will be the worst economic downturn in all of U.S. history.  That is a very bold statement to make, and it should not be done lightly.

That is why I have been absolutely astounded by some of the mainstream headlines that I have been seeing lately.  For example, the following comes from a New York Post article entitled “Next crash will be ‘worse than the Great Depression’: experts”

“We think the major economies are on the cusp of this turning into the worst recession we have seen in 10 years,”said Murray Gunn, head of global research at Elliott Wave International.

And in a note, he added: “Should the [US] economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”

And here is an excerpt from an article posted on MSN entitled “Experts warn the next recession will be ‘worse than the Great Depression’ and predict it will hit US within two years as $247 trillion global debt outdoes 2008”

…click on the above link to read the rest of the article…

We Just Witnessed The Biggest U.S. Bond Crash In Nearly 2 Years – What Does This Mean For The Stock Market?

We Just Witnessed The Biggest U.S. Bond Crash In Nearly 2 Years – What Does This Mean For The Stock Market?

U.S. bonds have not fallen like this since Donald Trump’s stunning election victory in November 2016.  Could this be a sign that big trouble is on the horizon for the stock market?  It seems like bonds have been in a bull market forever, but now suddenly bond yields are spiking to alarmingly high levels.  On Wednesday, the yield on 30 year U.S. bonds rose to the highest level since September 2014, the yield on 10 year U.S. bonds rose to the highest level since June 2011, and the yield on 5 year bonds rose to the highest level since October 2008.  And this wasn’t just a U.S. phenomenon.  We saw bond yields spike all over the developed world on Wednesday, and the mainstream media is attempting to put a happy face on things by blaming a “booming economy” for the bond crash.  But the truth is not so simple.  For U.S. bonds, Bill Gross says that it was a lack of foreign buyers that drove yields higher, and he says that this may only be just the beginning

And, according to Gross, the carnage may not end here: “Lack of foreign buying at these levels likely leading to lower Treasury prices,” echoing what we said last week. And as foreign investors pull back from US paper, look for even higher yields, and an even higher dollar, which in turn risks re-inflaming the EM crisis that had mercifully quieted down in recent weeks.

I believe that Gross is right on target.

And Jeffrey Gundlach has previously warned that when yields get to this level that it would be a “game changer”

…click on the above link to read the rest of the article…

New “Dark Money” Documentary Shines Light Into the Shadows Cast by the Super-Rich

Photo: Courtesy of PBS

NEW “DARK MONEY” DOCUMENTARY SHINES LIGHT INTO THE SHADOWS CAST BY THE SUPER-RICH

IF YOU, LIKE most Americans, believe you’re being screwed by the U.S. political system, and would like to know exactly how the screwing functions, tune into “Dark Money,” a new documentary premiering Monday, October 1 on PBS. The film, directed by Kimberly Reed, is one of the most expert dissections ever conducted of the subterranean tentacles quietly strangling U.S. democracy. (“Dark Money” was co-funded by Topic Studios, which is part of First Look Media, along with The Intercept.)

The movie is largely about the last decade of politics in Montana. This long-term, close-to-the-ground focus is cinematically unique, and makes it possible for “Dark Money” to illuminate three startling facts about how America now works. 

First, the corporate hard-right is systematically investing in politics at an incredibly granular level, down to state and local races. 

Second, they’re not just trying to crush Democrats. Leaked documents examined in the movie show conspirators discussing a plan to “purge” all Republicans who don’t share their worldview — an ideology so conservative that it hasn’t been seen in full flower in the U.S. for 100 years. In fact, the politicians who appear in the film are largely Republicans who’ve been successfully targeted for the right-wing purge, who speak wistfully about Montana’s evaporating history as a small-d democracy.

Third, dark money, while just one tributary of the Mississippi of cash flowing through the U.S. political system, is a key tool of the corporate right. It gets its name from the fact that certain kinds of nonprofit corporations — unlike political campaigns and even Super PACs — currently do not have to disclose their donors. 

…click on the above link to read the rest of the article…

The Stock Market Just Crashed In Italy, And Argentina Has Panic-Raised Interest Rates To 65 Percent

The Stock Market Just Crashed In Italy, And Argentina Has Panic-Raised Interest Rates To 65 Percent

In the 9th largest economy in the world, the financial markets are crashing, and in the 21st largest economy in the world the central bank just raised interest rates to 65 percent to support a currency that is completely imploding.  While the mainstream media in the United States continues to be obsessed with all things Kavanaugh, an international financial crisis threatens to spiral out of control.  Stock prices are falling and currencies are collapsing all over the planet, but because the U.S. has been largely unaffected so far the mainstream media is mostly choosing to ignore what is happening.  But the truth is that this is serious.  The financial crisis in Italy threatens to literally tear the EU apart, and South America has become an economic horror show.  The situation in Brazil continues to get worse, the central bank of Argentina has just raised interest rates to 65 percent, and in Venezuela starving people are literally eating cats and dogs in order to survive.  How bad do things have to get before people will start paying attention?

On Friday, Italian stocks had their worst day in more than two years, and it was the big financial stocks that were on the cutting edge of the carnage

Shares in Italian banks .FTIT8300, whose big sovereign bond portfolios makes them sensitive to political risk, bore the brunt of selling pressure, sinking 7.3 percent as government bonds sold off and the focus turned to rating agencies.

Along with the main Italian stock index .FTMIB, the banks had their worst day since the June 2016 Brexit vote triggered a selloff across markets.

Italian bonds got hit extremely hard too.  The following comes from Business Insider

…click on the above link to read the rest of the article…

Why Are So Many People Talking About The Potential For A Stock Market Crash In October?

Why Are So Many People Talking About The Potential For A Stock Market Crash In October?

It is that time of the year again.  Every year, people start talking about a possible stock market crash in October, because everyone remembers the historic crashes that took place in October 1987 and October 2008.  Could we witness a similar stock market crash in October 2018?  Without a doubt, the market is primed for another crash.  Stock valuations have been in crazytown territory for a very long time, and financial chaos has already begun to erupt in emerging markets all over the globe.  When the stock market does collapse, it won’t exactly be a surprise.  And a lot of people out there are pointing to October for historical reasons.  I did not know this, but it turns out that the month with the most market volatility since the Dow was first established has been the month of October

The difference is quite significant, as judged by a measure of volatility known as the standard deviation: For all Octobers since 1896, when the Dow Jones Industrial Average was created, the standard deviation of the Dow’s daily changes has been 1.44%. That compares to 1.05% for all months other than October.

Like me, you are probably tempted to think that the reason why October’s number is so high is because of what happened in 1987 and 2008.

But even if you pull out those two months, October is still the most volatile

You might think that this difference is caused by a few outliers, such as the 1987 crash (which, of course, occurred in October) or 2008 (the Dow suffered several thousand-point plunges that month as it reacted to the snowballing financial crisis). But you would be wrong: The standard deviation of daily Dow changes is much higher in October than other months even if we eliminate 1987 and 2008 from the sample.

…click on the above link to read the rest of the article…

Droit du Seigneur and the Neofeudal Privileges of Class in America

Droit du Seigneur and the Neofeudal Privileges of Class in America

Want to understand the full scope of neofeudalism in America? Follow the money and the power and privilege it buys.

The repugnant reality of class privilege in America is captured by the phrasedate rape: the violence of forced, non-consensual sex is abhorrent rape when committed by commoner criminals, but implicitly excusable date rape when committed by a member of America’s privileged elite.

Compare the effectiveness of excuses offered by privileged elites (we were both drinking, I didn’t hear her say no, etc.) when offered in court by less privileged males on trial for rape. The privileged elite is acquitted or given a wrist-slap while the commoner gets 20 years in prison.

This implicit privilege to non-consensual sex was known as Droit du Seigneur(right of the lord) in feudal Europe. While scholars debate whether the right of lords to have their way with female subjects was institutionalized, it doesn’t take much imagination to see the lack of recourse unmarried female serfs had if summoned to the lord’s lair.

The “right” to non-consensual sex is simply one facet of class privilege in America. One need only examine the histories of Harvey Weinstein and Bill Clinton to see how Droit du Seigneur works in America: from the perverse perspective of the privileged, the female “owes” the “lord” sex as “payment” for his interest in her, or (even more offensively, if that’s possible) the female is “fortunate” to have attracted the violent sexual gratification of the “lord.”

While the standard presumption of sexual assault / date-rape is that it’s all about sex, the much more disturbing reality is that it’s a crime of violence.Force and violence are also privileges of the New Aristocracy, both the direct violence of sexual assault and indirect violence threatened or manifested by the innumerable thugs that surround the New Aristocracy.

…click on the above link to read the rest of the article…

Stock Prices Are Surging Because Corporations Are Spending More Money On Stock Buybacks Than Anything Else

Stock Prices Are Surging Because Corporations Are Spending More Money On Stock Buybacks Than Anything Else

The primary reason why stock prices have been soaring in recent months is because corporations have been buying back their own stock at an unprecedented pace.  In fact, the pace of stock buybacks is nearly double what it was at this time last year.  According to Goldman Sachs, S&P 500 companies spent 384 billion dollars buying back stock during the first half of 2018.  That is an absolutely astounding number.  And in many cases, corporations are going deep into debt in order to do this.  Of course this is going to push up stock prices, but corporate America will not be able to inflate this bubble indefinitely.  At some point a credit crunch will come, and the pace of stock buybacks will fall precipitously.

Prior to 1982, corporations were not permitted to go into the market and buy back stock.

The reason for this is obvious – stock buybacks are a really easy way for corporations to manipulate stock prices.

But these days it is expected that most large corporations will engage in this practice.  Large stockholders love to see the price of the stock go up, and they are never going to complain when smaller shareholders are bought out and their share of the company is increased.  And corporate executives love buybacks because so much of their compensation often involves stock options or bonuses related to key metrics such as earnings per share.

So in the end, stock buybacks are often all about greed.  It is a way to funnel money to those at the very top of the pyramid, and those stock market gains are taxed at capital gains rates which are much lower than the rates on normal income.

…click on the above link to read the rest of the article…

Bad Money

Dreamstime

Bad Money

Our debt-based fiat money system poses an existential threat

We’re all going to have to be a lot more resilient in the future.

The “long emergency“, as James Howard Kunstler puts it, is now upon us.

If ever there was a wake-up call from Mother Nature, it’s been the weather events over the past 12 months.

Last year, the triplet Hurricanes Harvey, Maria, and Irma resulted in thousands of deaths (mainly in Puerto Rico) and tens of $billions in destruction.

This year has seen a rash of 120° F (50° C) summer days, droughts, current monster storms like Typhoon Mangkhut and Hurricane Florence — as well as numerous 100/500/1,000-year floods spread across the globe.

And that’s just so far.

It remains nearly impossible to connect climate change directly to any particular weather event. But taken together, it’s becoming increasingly difficult to dismiss the scientific claim that the quantity of heat trapped in the earth’s weather systems impacts the amount of water that now falls (or refuses to fall) from the sky and the high-temperature heat waves that now shatter records with such regularity that once-rare extreme conditions are now becoming routine.

Our “new normal” is quickly diverging from the natural conditions most of us have grown up with. Permafrost isn’t “permanent ” anymore — it melts. The Arctic now can be ice-free. In a growing number of regions in the US, you can leave a screenless window open on an August evening (with the lights on!), and remain unmolested by the swarms of insects that used to prowl the night.

All of these symptoms are connected by a root cause: our society’s relentless addiction to growth. And while we do our best here at PeakProsperity.com to continually raise awareness of this existential threat, the rest of the media completely ignores it.

meltdown? That’s splashed everwhere…

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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