Home » Posts tagged 'loans' (Page 2)

Tag Archives: loans

The Dow Jones Industrial Average just posted its biggest single day point gain ever. On Wednesday, the Dow shot up 1,086 points, which shattered the old record by a staggering 150 points. It truly was a remarkable day, and this is the sort of “Santa Claus rally” that investors had been hoping for. Many are convinced that this rally is an indication that the crisis of the last three months is over, but as you will see below, this sort of extreme volatility is actually a really bad sign. But for the moment, the mainstream media is pushing the narrative that everything is once again peachy keen in the financial world. Just consider the following quote from CNN…

“Investors went bargain shopping the day after Christmas, where stocks just got too cheap relative to earnings, future earnings, any reasonable assessment of earnings,” said Chris Rupkey, managing director of MUFG. “The coast is clear, back up the truck, investors are saying enough already, the world is not ending.”

The coast is clear?

Really?

Do you think that they were saying the same thing on October 13th, 2008? On that day, the Dow Jones Industrial Average rose 936 points, and at the time it was the biggest daily point increase that Wall Street had ever seen by a very wide margin.

Of course that was right in the middle of the last financial crisis, and stocks just kept on tumbling after that massive rally.

But then on October 28th, 2008 the Dow Jones Industrial Average rose 889 points. Up until Wednesday, that was the second biggest daily point increase in U.S. history.

Was the crisis over then?

No way. Subsequently, the Dow kept on falling until it eventually bottomed out in early 2009.

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

This Was The Worst Week For The Stock Market Since The Financial Crisis Of 2008

December 22, 2018

This Was The Worst Week For The Stock Market Since The Financial Crisis Of 2008

Just when you thought that things couldn’t get any worse, they did. During normal times, a Friday before Christmas is an extremely boring trading session, but these are not normal times. On Friday, the Dow Jones Industrial Average was down another 414 points, and that brought the total drop for the week to 1,655 points. The marketplace has been completely gripped by panic, and CNN’s Fear & Greed index has just registered the highest “fear rating” that we have ever seen. I keep saying that we have not witnessed anything like this since the last financial crisis, and the numbers clearly back that assessment up. In fact, this was the largest weekly percentage drop for the Dow since October 2008…

The Dow just suffered its deepest weekly plunge since 2008and the Nasdaq is officially in a bear market.

The miserable performance reflects deepening fears on Wall Street of an economic slowdown and overly-aggressive Federal Reserve.

Apprehension about a looming government shutdown and anxiety over higher interest rates were two of the major factors that pushed stocks down on Friday.

Normally trading volume is very, very light in the days leading up to Christmas, so what we just witnessed was extremely unusual. Trading volume on Friday was “really heavy” with “more than 12 billion shares” changing hands…

In a bad sign on Friday, volume was really heavy. More than 12 billion shares changed hands on U.S. exchanges on Friday, the biggest volume in at least two years.

When I have warned about a “rush for the exits” in the past, this is the kind of thing that I am talking about.

Many investors were panic-selling on Friday because they wanted to be out of the market before things closed down for the holidays, and stock prices just kept getting hammered lower and lower.

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

Worst Market Crash In A Decade: The Dow Has Fallen More Than 4000 Points As Stocks Rapidly Approach “The Capitulation Phase”

December 21, 2018

Worst Market Crash In A Decade: The Dow Has Fallen More Than 4000 Points As Stocks Rapidly Approach “The Capitulation Phase”

We have not seen anything like this since the financial crisis of 2008. On Thursday the Dow Jones Industrial Average lost another 464 points, and over the last five trading sessions it has lost a total of more than 1,700 points. CNN’s Fear & Greed index has swung all the way over to “extreme fear”, and there has only been one December in all of U.S. history that was worse for the stock market than this one. But back at the very beginning of October, most of the experts never would have imagined that the year would end this way. According to CNBC, the Dow Jones Industrial Average hit an all-time record high of 26,951.81 in early October, and investors were feeling really good about things at that point. But on Thursday the index closed at just 22,859.60, and that means that the Dow has lost more than 4,000 points in less than three months.

All of the major trend lines have been shattered and all of the key support levels have been breached. When analysts look at stock charts these days, all they are seeing is sell signal after sell signal. One investment strategist told CNN that stocks are “quickly approaching the capitulation phase”…

“Equity markets are quickly approaching the capitulation phase after having broken below critical support,” Sam Stovall, chief investment strategist at CFRA Research, told CNN Business.

According to Google, “capitulation” means “the action of surrendering or ceasing to resist an opponent or demand.” In this case, the bulls are on the verge of surrendering to the bears, and if that happens we could see a tremendous amount of chaos break loose on Wall Street.

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

“Something Is Wrong Here”: U.S. Stocks Plunge Again And Are Having Their Worst Quarter In 7 Years

December 16, 2018

“Something Is Wrong Here”: U.S. Stocks Plunge Again And Are Having Their Worst Quarter In 7 Years

The Dow Jones Industrial Average plummeted another 496 points on Friday as panicked investors continue to pull billions of dollars out of the stock market. With less than two weeks to go until Christmas, the markets are not supposed to be experiencing this kind of turmoil, but it is happening and there is no end in sight. During the fourth quarter of 2018, we have already seen the S&P 500 fall 11 percent. Even if it doesn’t go down any further, that will be the worst quarter in 7 years. And of course the S&P 500 is not alone – at this point all of the major indexes are officially in correction territory. Things are certainly getting quite frightening on Wall Street, and many believe that the worst is yet to come.

Despite widespread assurances from the mainstream media that the wise thing to do is to keep your money in the market, investors are pulling money out of equities at a near record pace…

Jittery investors yanked a record $39 billion from global equities in the latest week, according to a Bank of America Merrill Lynch report released Friday. That included $28 billion that exited US stocks, the second-highest on record. And a record $8.4 billion was pulled from investment grade bonds.

The “race for the exits” that we have been witnessing really is turning into a bit of a stampede, and once panic starts to spread it can be very difficult to stop it.

So why is all of this happening?

Well, one market strategist told CNN that “something is wrong here” and that his firm cannot deny that we are in a “global slowdown”…

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

Democratizing Money

December 12, 2018

Democratizing Money

The Green New Deal has been in the air lately. In a recent piece on this website, Rob Urie writes that the Green New Deal is “the last, best hope for environmental and social resolution outside of rapid dissolution toward dystopian hell.”

Quite a claim. Let’s take a closer look.

The Green New Deal, first articulated by the Green Party but now supported by many progressive Democrats, calls for “real financial reform” to address the twin problems of climate change and economic insecurity.

Included are some of the standard proposals we regularly hear, such as restoring the Glass-Steagell Act (separating commercial and investment banking), breaking up the big banks, ending bank bailouts, reducing debt burdens, regulating derivatives, and taxing bank bonuses.

These are serious proposals, and would likely provide some relief, but they are partial measures subject to rollback and evasion–just the kind of incremental strategy that has failed for decades.

But the “real financial reform” the Green New Deal calls for goes a lot further. It promises genuine radical change with two new proposals: One is to “democratize monetary policy to bring about public control of the money supply and credit creation,” and the other is to “support the formation of federal, state, and municipal public owned banks that function as non-profit utilities.”

First, some background. Most people don’t realize that the government does not issue money; the private banking system does, by issuing loans at interest. The last time the government issued money in any quantity was during the Civil War, when so-called greenbacks were printed by the Treasury department to pay for the war. Greenbacks were not debt, but direct currency printed to give government contractors money for the goods and services provided, which they then spent into the general economy, stimulating commerce.

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

U.S. Debt Poised To Hit The $22 Trillion Mark As “Storm Clouds” Indicate “We Could Have Another Financial Crisis”

December 12, 2018

U.S. Debt Poised To Hit The $22 Trillion Mark As “Storm Clouds” Indicate “We Could Have Another Financial Crisis”

The rapidly exploding U.S. national debt is about to cross another critical threshold. According to the U.S. Treasury, the debt of the federal government is currently sitting at $21,854,296,172,540.94, and at our current pace we will likely hit the $22 trillion mark next month. This is a horrifying national crisis, and yet nothing is being done about it. When Barack Obama entered the White House in January 2008, the U.S. was $10.6 trillion in debt, and so that means that we have added 11.2 trillion dollars of new debt to that total in less than 11 years. Needless to say, it doesn’t take a math genius to figure out that we have been adding an average of more than a trillion dollars a year to the national debt for more than a decade. But instead of getting our insatiable appetite for debt under control, Congress is actually accelerating our spending. At this point, there is no possible scenario in which this story ends well.

Meanwhile, the global financial elite are really starting to talk up the possibility of a new financial crisis.

For example, the deputy head of the IMF just said that he sees “storm clouds building”…

The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for another downturn, the deputy head of the International Monetary Fund has warned.

David Lipton, the first deputy managing director of the IMF, said that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system.

“As we have put it, ‘fix the roof while the sun shines’. But, like many of you, I see storm clouds building and fear the work on crisis prevention is incomplete.”

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

Stock-Market Margin Debt Plunges Most Since Lehman Moment

November 22, 2018

Stock-Market Margin Debt Plunges Most Since Lehman Moment

It gets serious. Margin calls?

No one knows what the total leverage in the stock market is. But we know it’s huge and has surged in past years, based on the limited data we have, and from reports by various brokers about their “securities-based loans” (SBLs), and from individual fiascos when, for example, a $1.6 billion SBL to just one guy blows up. There are many ways to use leverage to fund stock holdings, including credit card loans, HELOCs, loans at the institutional level, loans by companies to its executives to buy the company’s shares, or the super-hot category of SBLs, where brokers lend to their clients. None of them are reported on an overall basis.

The only form of stock market leverage that is reported monthly is “margin debt” – the amount individual and institutional investors borrow from their brokers against their portfolios. Margin debt is subject to well-rehearsed margin calls. And apparently, they have kicked off.

In the ugliest stock-market October anyone can remember, margin debt plunged by $40.5 billion, FINRA (Financial Industry Regulatory Authority) reported this morning – the biggest plunge since November 2008, weeks after Lehman Brothers had filed for bankruptcy:

During the stock market boom since the Financial Crisis, this measure of margin debt has surged from high to high, reaching a peak in May 2018 of $669 billion, up 60% from the pre-Financial Crisis peak in July 2007, and up 117% since January 2012. Since the peak in May, margin debt has dropped by $62 billion (-9.2%). Note the $40.5-billion plunge in October:

In the two-decade scheme of things, the relationship between stock market surges and crashes and margin debt becomes obvious.

Back during the dot-com bubble, dot-com stocks, traded mostly on the Nasdaq, included what today are booming survivors like Amazon [AMZN], barely hangers-on like RealNetworks [RNWK], or goners like eToys.

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

Stock Market Crash: The Dow Has Fallen Nearly 2,500 Points And FAANG Stocks Have Lost A TRILLION Dollars In Value

November 21, 2018

Stock Market Crash: The Dow Has Fallen Nearly 2,500 Points And FAANG Stocks Have Lost A TRILLION Dollars In Value

Thanksgiving week was not supposed to be like this. Normally things are slow in the days leading up to Thanksgiving as investors prepare to gorge themselves with turkey and stuffing as they gather with family and friends. But this year the stock market is crashing, and Wall Street is in panic mode. On Tuesday, the Dow Jones Industrial Average closed at 24,465.64, which is nearly 2,500 points lower than the all-time high of 26,951.81 that was set in early October. But as I noted yesterday, what has been happening to tech stocks is even more dramatic. Each one of the FAANG stocks is now down by more than 20 percent, and they have combined to lose more than a trillion dollars in value. We haven’t seen anything like this since the financial crisis of 2008, and at this point all of Wall Street’s gains for 2018 have been completely wiped out.

Fear is a very powerful motivator, and right now a lot of investors are feverishly getting out of the market because they are afraid of losing their paper profits.

One analyst is describing what is going on as a rush for the exits…

“The highways will be crowded this evening as the Thanksgiving rush will begin in earnest, but this morning investors are rushing for the exits,” Paul Hickey, co-founder of Bespoke Investment Group, wrote to clients on Tuesday.

But for many tech investors, the truth is that the cattle have already left the barn.

Just check out how much market capitalization the “big five” have already lost. The following numbers come from CNBC…

Facebook: $253 billion
Amazon: $280 billion
Apple: $253 billion
Netflix: $67 billion
Alphabet: $164 billion

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

“A Daisy Chain Of Defaults”: How Debt Cross-Guarantees Could Spark China’s Next Crisis

November 20, 2018

“A Daisy Chain Of Defaults”: How Debt Cross-Guarantees Could Spark China’s Next Crisis

On November 8, China shocked markets with its latest targeted stimulus in the form of an “unprecedented” lending directive ordering large banks to issue loans to private companies to at least one-third of new corporate lending. The announcement sparked a new round of investor concerns about what is being unsaid about China’s opaque, private enterprises, raising prospects of a fresh spike in bad assets.

A few days later, Beijing unveiled another unpleasant surprise, when the PBOC announced that Total Social Financing – China’s broadest credit aggregate – has collapsed from 2.2 trillion yuan in September to a tiny 729 billion in October, missing expectations of a the smallest monthly increase since October 2014.

Some speculated that the reason for the precipitous drop in new credit issuance has been growing concern among Chinese lenders over what is set to be a year of record corporate defaults within China’s private firms. As we reported at the end of September, a record number of non-state firms had defaulted on 67.4 billion yuan ($9.7 billion) of local bonds this year, 4.2 times that of 2017, while the overall Chinese market was headed for a year of record defaults in 2018. Since then, the amount of debt default has risen to 83 billion yuan, a new all time high (more below).

Now, in a new development that links these seemingly unrelated developments, Bloomberg reports that debt cross-guarantees by Chinese firms have left the world’s third-largest bond market prone to contagion risks, which has made it “all the tougher for officials to follow through on initiatives to sustain credit flows”, i.e., the growing threat of unexpected cross- defaults is what is keeping China’s credit pipeline clogged up and has resulted in the collapse in new credit creation.

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

This Wasn’t Supposed To Happen…

November 13, 2018

This Wasn’t Supposed To Happen…

We have definitely deviated from the script. According to virtually all of the “experts”, the stock market was not supposed to keep plummeting in November. This was supposed to be the month when the market calmed down and things returned to normal. But instead, November is starting to look a whole lot like October, and many investors are really starting to freak out. U.S. stocks declined for a third day in a row on Monday, and all post-election gains have now been completely wiped out. The Dow Jones Industrial Average lost another 602 points, and all of these large daily losses are really starting to add up. It may still be a bit too early to call this a “major financial crisis”, but if stock prices keep plunging like this it won’t be too long before all hell starts breaking loose on Wall Street.

Goldman Sachs, GE and California utility stocks were some of the biggest losers on Monday, but it was Apple that made the biggest news…

Investors grew concerned after Wells Fargo analysts identified Apple as the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. The news sent Apple’s stock down 5 percent for the day. Lumentum shares plunged almost 33 percent.

Shares in other major tech stocks fell. Advanced Micro Devices gave up 9.51 percent, while Nvidia fell 7.84 percent. Micron Technology lost 4.27 percent. Banks and consumer-focused companies, and media and communications stocks also took heavy losses.

All along, tech stocks had been leading the bull market on the way up, but now things have completely shifted.

In recent weeks tech stocks have been absolutely cratering, and several of the biggest names are now officially in bear market territory. The following summary comes from Wolf Richter…

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

Global Stocks Plunge Again And A Former Reagan Administration Official Is Warning Of A “40% Crash”

November 5, 2018

Global Stocks Plunge Again And A Former Reagan Administration Official Is Warning Of A “40% Crash”

Stocks are falling again, and many believe that this new crisis is only just beginning. After a disappointing end to last week, a lot of investors were hoping for a bounce to start this week, but so far that has not materialized. As I write this article, all the big markets in Asia are down, and it looks like it is going be be a rough morning for Wall Street. Of course we probably won’t see too much movement as global markets wait to see what happens on Tuesday, and those results could potentially move things up or down substantially. Ultimately, I have a feeling that Wall Street will not be too happy if control of Congress is divided, because that would almost certainly mean that very little will get accomplished in Washington for the next two years. Instead, we will likely see even more bickering and fighting than we are seeing now.

But no matter what happens in the short-term, a lot of experts are convinced that the big market crash that everyone has been waiting for is finally here.

One of those experts is David Stockman.

Stockman is a former member of Congress, and he was the Director of the Office of Management and Budget under President Ronald Reagan. These days he is a frequent contributor on CNBC, and he recently told the network that there will be “a 40 percent stock market plunge”…

David Stockman warns a 40 percent stock market plunge is closing in on Wall Street.

Stockman, who served as President Reagan’s Office of Management and Budget director, has long warned of a deep downturn that would shake Wall Street’s most bullish investors. He believes the early rumblings of that epic downturn is finally here.

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

“Red October”: We Just Witnessed The Worst Month For The S&P 500 In 7 Years

November 1, 2018

“Red October”: We Just Witnessed The Worst Month For The S&P 500 In 7 Years

This was an October that many of us will never forget. The month of October is typically the most volatile month of the year for stocks, and that was definitely the case in 2018. It was the worst month for the S&P 500 in 7 years, and it was the worst month for the Nasdaq in almost 10 years. But the damage could have been much worse if we had not seen a bounce the last two trading days of the month. On Wednesday, the Dow Jones Industrial Average was up 241 points, and investors are hoping that this is a sign that things are starting to settle down a bit. And hopefully things will be calmer in November, because things were so chaotic in October that the month has already been branded “Red October” by the mainstream media…

Wall Street finally bid good riddance to what one professional stock investor dubbed “Red October.”

In a tumultuous month marked by big price swings, rising fear levels and emerging risks, the U.S. stock market suffered its biggest October decline since the 2008 financial crisis, prompting shaken investors to reassess the staying power of a bull run that began more than nine years ago.

When we go back and look at the month as a whole, the damage is breathtaking.

Here is a summary of the carnage that we witnessed…

-October was the worst month for the S&P 500 since September 2011.

-October was the worst month for the Nasdaq since November 2008.

–Nearly 2 trillion dollars in U.S. stock market wealth was wiped out.

-Overall, approximately 8 trillion dollars in global stock market wealth was wiped out.

-October was the worst month ever for the “FANG” stocks.

-Facebook was down 7.7 percent.

-Alphabet (the parent company of Google) was down 9.7 percent.

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

A Perfect Storm Is Brewing

October 29, 2018

A Perfect Storm Is Brewing

Will we someday look back on October 2018 as the turning point? As the month began, people were generally feeling pretty good about things, and the U.S. stock market quickly set a new all-time high. But from that point on, the wheels fell off for Wall Street. We just witnessed the worst October for U.S. stocks since the financial crisis of 2008, and at this point more than 8 trillion dollars of global wealth has been completely wiped out. But it isn’t just the stock market that is being shaken. The horrific violence in Pittsburgh is just the latest in a string of events that have rattled the entire nation. Sometimes I feel like I am literally watching the fabric of our society come apart right in front of my eyes. It is almost as if there is a tangible presence of evil in the air, and it seems to be getting stronger over time. For quite a while I have been warning that levels of anger and frustration are rising to unprecedented levels, and all of that anger and frustration is leading people to do things that are absolutely unthinkable. And if people are this crazed now, how bad are things going to get once the economy really starts unraveling?

Let there be no doubt – if U.S. stocks crash really hard, it will cause a massive credit crunch, and that would absolutely strangle economic activity.

Yes, October was bad, but we can recover from what happened in October.

But if November and December are equally as bad or worse, we could have a nightmarish crisis on our hands very rapidly. And many experts believe that this market is ultimately going to decline much, much further.

For example, just consider what Wolf Richter is saying…

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

Stock Market Plunges Again – Global Stocks Down 5 Weeks In A Row – 8 Trillion Dollars In Wealth Wiped Out

October 27, 2018

Stock Market Plunges Again – Global Stocks Down 5 Weeks In A Row – 8 Trillion Dollars In Wealth Wiped Out

It’s not over. The worst October stock market crash since 2008 got even worse on Friday. The Dow was down another 296 points, the S&P 500 briefly dipped into correction territory, and it was another bloodbath for tech stocks. On Wednesday, I warned that there would be a bounce, and we saw that happen on Thursday. But the bounce didn’t extend into Friday. Instead, we witnessed another wave of panic selling, and that has many investors extremely concerned about what will happen next week. Overall, global stocks have now fallen for five weeks in a row, and during that time more than 8 trillion dollars in global wealth has been wiped out. That is the fastest plunge in global stock market wealth since the collapse of Lehman Brothers, and it is yet another confirmation that a major turning point has arrived.

The wild swings up and down that we witnessed this week are very reminiscent of what we saw in 2008.

Markets just don’t go down in a straight line. In fact, some of the best days in all of Wall Street history happened right in the middle of the last financial crisis.

When markets are very volatile, the overall trend tends to be down. So what investors should be hoping for are extremely boring days on Wall Street when not much happens. That has been the usual state of affairs for much of the past decade, but now volatility has returned with a vengeance. The following is how CNBC summarized the carnage that we witnessed on Friday…

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

Stock Market Crash! The Dow Has Now Plunged 2,368 Points From The Peak Of The Market

October 25, 2018

Stock Market Crash! The Dow Has Now Plunged 2,368 Points From The Peak Of The Market

The level of panic that we witnessed on Wall Street on Wednesday was breathtaking. After a promising start to the day, the Dow Jones Industrial Average started plunging, and at the close it was down another 608 points. Since peaking at 26,951.81 on October 3rd, the Dow has now fallen 2,368 points, and all of the gains for 2018 have been completely wiped out. But things are even worse when we look at the Nasdaq. The percentage decline for the Nasdaq almost doubled the Dow’s stunning plunge on Wednesday, and it has now officially entered correction territory. To say that it was a “bloodbath” for tech stocks on Wednesday would be a major understatement. Several big name tech stocks were in free fall mode as panic swept through the marketplace like wildfire. As I noted the other day, October 2018 looks a whole lot like October 2008, and many believe that the worst is yet to come.

But in the short-term we should see some sort of bounce once the current wave of panic selling is exhausted. During every major stock market crash in our history there have been days when the stock market has absolutely soared, and this crash will not be any exception.

If we do see a bounce on either Thursday or Friday, please don’t assume that the crash is over. Most key technical levels have already been breached, and even a small piece of bad news can send stocks plunging once again.

On Wednesday there really wasn’t anything too unusual that happened, but stocks cratered anyway. Here is a summary of the carnage…

-The Dow Jones Industrial Average plummeted 608 points on Wednesday.

-The Dow is now down 7.1 percent for the month of October.

-The S&P 500 has now fallen for 13 of the last 15 trading days.

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

Tag Archives: loans

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Post navigation

Latest Posts