Home » Posts tagged 'Financial Crash'

Tag Archives: Financial Crash

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Is A Global Crash Just Around The Corner? Central Banks Are Cutting At The Fastest Rate Since The Financial Crisis

Is A Global Crash Just Around The Corner? Central Banks Are Cutting At The Fastest Rate Since The Financial Crisis

There is something very fishy about the world’s economic situation. On one hand, US president Trump keeps repeating that the US economy is the strongest it has ever been, with global strategists, economists and officials parroting as much they can, repeating that the world economy is also set to rebound sharply any minute now. And yet, two things stand out.

As we pointed out first last month, and as Convoy Investments echoed last week, with the US economy allegedly doing very well, the Fed’s balance sheet is now expanding at a rate matched only briefly by QE1, and faster than QE2 or QE3, in the aftermath of September’s repo fiasco which provided Powell with an extremely convenient scapegoat on which to hang the return of “NOT QE” (which, we now know, is in fact QE.)

The Fed’s unprecedented balance sheet expansion in a time of alleged economic stability and solid growth is a handy explanation why the S&P has been soaring in the past two months, and as we pointed out, a remarkable correlation has emerged whereby the S&P is up every week the Fed’s balance sheet is higher, and down whenever the balance sheet has declined.

And so, while helping us understand what has been the fuel for the market’s recent blow-off top meltup, the Fed’s emergency intervention does beg the question: is there something amiss more than just the repo market, and is Powell telegraphing that a far more serious crisis may be looming.

It’s not just Powell, however. It’s everyone.

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

“Big Short” Investor Michael Burry Explains How Index Funds Will Trigger The Next Crash

“Big Short” Investor Michael Burry Explains How Index Funds Will Trigger The Next Crash

After years of radio silence, Dr. Michael Burry – the small-time stockpicker who rose to fame for his bets against subprime mortgage bonds featured in the book (and later film) “the Big Short” – is once again doing the media rounds, talking about his latest equity plays and sharing his thoughts about the next big market blowups.

And in an interview with Bloomberg, Burry doesn’t disappoint. At one point, he shares his skepticism about passive investing, and the flood of money that has poured into index funds since the financial crisis. Burry sees similarities between these funds and the CDOs that nearly brought down the financial system in the run-up to the crisis.

Burry, who made a fortune betting against the CDOs, argued that these passive flows are distorting prices for stocks and bonds in much the same way that CDOs did for subprime mortgages. Eventually, the flows will reverse at some point, and when they do, “it will be ugly.”

“Like most bubbles, the longer it goes on, the worse the crash will be,” Burry, who oversees about $340 million AUM at Scion Asset Management in Cupertino, said.

That’s one reason he likes small-cap value stocks: they tend to be underrepresented in index funds, or left out entirely.

Here’s what Burry had to say on a number of topics:

Index funds and price discovery:

Central banks and Basel III have more or less removed price discovery from the credit markets, meaning risk does not have an accurate pricing mechanism in interest rates anymore. And now passive investing has removed price discovery from the equity markets.

The simple theses and the models that get people into sectors, factors, indexes, or ETFs and mutual funds mimicking those strategies – these do not require the security- level analysis that is required for true price discovery.

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

Precious Metals Are Setting Up For A Major Rally While The Broader Markets Are Primed For A Crash

Precious Metals Are Setting Up For A Major Rally While The Broader Markets Are Primed For A Crash

While many precious metals investors are concerned about the current low prices, I believe gold and silver are setting up for a major rally while the market is primed for a crash.  Why?  Because the broader market technical indicators versus the precious metal have been pushed to opposite extremes.  Thus, when one goes down, the other will rise.  And, we also must remember, gold and silver act as a FEAR TRADE when the conditions get ugly in the market.

And if you don’t think the markets are getting ugly, you should see the intra-day volatile price action of some of the more well-known stocks.  I continue to be amazed at the INSANE price movements taking place in the various stocks in the market.  While the fundamentals haven’t played much of a role in determining the “PRICE” of stocks for a while, it seems to me that there is no rhyme or reason for the way the stocks are trading today.

So, before I compare the analysis of the overall markets versus the precious metals, I wanted to provide two examples of company stock price movements over the past two days and why investors today are TOTALLY INSANE and IRRATIONAL.

ROKU Stock Jumps 28% In One Day On Lousy Financials

Those who aren’t familiar with the company called ROKU, they are one of the new streaming content providers to compete with Cable and Satellite.  It seems as if many cable and satellite customers are growing tired of the high costs of $150-$200 a month for their TV entertainment, so they are replacing them with ROKU via YouTube TV, Hulu, Netflix, etc.

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

The Global Economic Reset Begins With An Engineered Crash

The Global Economic Reset Begins With An Engineered Crash

For a few years now, since at least 2014, the phrase “global economic reset” has been circulating in the financial world. This phrase is used primarily by globalist institutions like the International Monetary Fund (IMF) to describe an event in which the current system as we know it will either die out or evolve into a new system where “multilateralism” will become the norm. The reset is often described in an ambiguous way. IMF banking elites will usually mention the end results of the shift, but they say little about the process to get there.

What we do know is that the intent of the globalists is to use this reset to create a more centralized monetary system and micro-managed global economy. At the core of this new structure would be the IMF along with perhaps the BIS and World Bank.  It is a plan that has been supported openly by both western and eastern governments, including Russia and China.

As noted, the details are few and far between, but the IMF describes the use of open borders and human migrations during the reset as a means to transfer capital from various parts of the world. It is a novel if not utterly insane way to transfer wealth that only makes sense if you understand that the globalist goal is to deliberately conjure a geopolitical catastrophe.

The IMF also asserts that blockchain technology will make capital transfer easier and more efficient in this future environment, which explains the enthusiastic globalist support for developments in blockchain technology and cryptocurrencies despite the notion in cryptocurrency circles that blockchain would somehow make the bankers “obsolete”.

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

A Global People’s Bailout for the Coming Crash

A Global People’s Bailout for the Coming Crash

When the global financial crisis resurfaces, we the people will have to fill the vacuum in political leadership. It will call for a monumental mobilisation of citizens from below, focused on a single and unifying demand for a people’s bailout across the world.

***

A full decade since the great crash of 2008, many progressive thinkers have recently reflected on the consequences of that fateful day when the investment bank Lehman Brothers collapsed, foreshadowing the worst international financial crisis of the post-war period. What seems obvious to everyone is that lessons have not been learnt, the financial sector is now larger and more dominant than ever, and an even greater crisis is set to happen anytime soon. But the real question is when it strikes, what are the chances of achieving a bailout for ordinary people and the planet this time?

In the aftermath of the last global financial meltdown, there was a constant stream of analysis about its proximate causes. This centred on the bursting of the US housing bubble, fuelled in large part by reckless sub-prime lending and an under-regulated shadow banking system. Media commentaries fixated on the implosion of collateralised debt obligations, credit default swaps and other financial innovations—all evidence of the speculative greed and lax government oversight which led to the housing and credit booms.

The term ‘financialisation’ has become a buzzword to explain the factors which precipitated these events, referring to the vastly expanded role of financial markets in the operation of domestic and global economies. It is not only about the growth of big banks and hedge funds, but the radical transformation of our entire society that has taken place as a result of the increasing dominance of the financial sector with its short-termist, profitmaking logic.

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

World economy at risk of another financial crash, says IMF

Debt is above 2008 level and failure to reform banking system could trigger crisis

The floor of the New York stock exchange in September 2008.
The floor of the New York stock exchange in September 2008. Photograph: Richard Drew/AP

The world economy is at risk of another financial meltdown, following the failure of governments and regulators to push through all the reformsneeded to protect the system from reckless behaviour, the International Monetary Fund has warned.

With global debt levels well above those at the time of the last crash in 2008, the risk remains that unregulated parts of the financial system could trigger a global panic, the Washington-based lender of last resort said.

Much has been done to shore up the reserves of banks in the last 10 years and to put in place more rigorous oversight of the financial sector, but “risks tend to rise during good times, such as the current period of low interest rates and subdued volatility, and those risks can always migrate to new areas”, the IMF said, adding, “supervisors must remain vigilant to these unfolding events”.

A dramatic rise in lending by the so-called shadow banks in China and the failure to impose tough restrictions on insurance companies and asset managers, which handle trillions of dollars of funds, are highlighted by the IMF as causes for concern.

The growth of global banks such as JP Morgan and the Industrial and Commercial Bank of China to a scale beyond that seen in 2008, leading to fears that they remain “too big fail”, also registers on the IMF’s radar.

The warning from the IMF Global Financial Stability report echoes similar concerns that complacency among regulators and a backlash against international agreements, especially from Donald Trump’s US administration, has undermined efforts to prepare for another downturn.

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

Virtually Everyone Agrees That Current Stock Market Valuations Are Not Sustainable And That A Great Crash Is Coming

Virtually Everyone Agrees That Current Stock Market Valuations Are Not Sustainable And That A Great Crash Is Coming

Stock Market Collapse Toilet Paper - Public DomainCurrent stock market valuations are not sustainable.  If there is one thing that I want you to remember from this article, it is that cold, hard fact.  In 1929, 2000 and 2008, stock prices soared to absolutely absurd levels just before horrible stock market crashes.  What goes up must eventually come down, and the stock market bubble of today will be no exception.  In fact, virtually everyone in the financial community acknowledges that stock prices are irrationally high right now.  Some are suggesting that there is still time to jump in and make money before the crash comes, while others are recommending a much more cautious approach.  But what almost everyone agrees on is the fact that stocks cannot go up like this forever.

On Tuesday, the Dow, the S&P 500 and the Nasdaq all set brand new record highs once again.  Overall, U.S. stocks are now up more than 10 percent since the election, and this is probably the greatest post-election stock market rally in our entire history.

But stocks were already tremendously overvalued before the election, and at this point stock prices have reached a level of ridiculousness only matched a couple of times before in the past 100 years.

Only the most extreme optimists will try to tell you that stock prices can stay this disconnected from economic reality indefinitely.  We are in the midst of one of the most outrageous stock market bubbles of all time, and as MarketWatch has noted, all stock market bubbles eventually burst…

The U.S. stock market at this level reflects a combination of great demand, great complacency, and great greed. Stocks are clearly in a bubble, and like all bubbles, this one is about to burst.

If corporations were making tremendous amounts of money, rapidly rising stock prices would make logical sense.

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

Global Elites Are Getting Ready To Blame You For The Coming Financial Crash

Global Elites Are Getting Ready To Blame You For The Coming Financial Crash

Those people that have any doubts about where the narrative is headed for global economic stability simply have not been paying attention lately.

As I pointed out in my pre-Brexit referendum article, Brexit: Global Trigger Event, Fake Out Or Something Else?, the story being scripted by the globalists is one of the “failures and crimes” of conservative movements. I predicted that the Brexit would pass based on this language used by international financiers and elites leading up to the vote.

The vast majority of analysts in the mainstream and in the alternative media refused to acknowledge the possibility that a successful Brexit actually works in FAVOR of the globalists, because it provides them a perfect scapegoat for a financial crisis that has been broiling for years and is now ready to burst into flames. I find still that many people will not dare to consider the idea that a successful conservative resurgence is actually part of the plan for globalist institutions. Many argue that the elites just don’t have that kind of pervasive control over the system, or that I am attributing “too much power and ability” to them.

I find this argument rather naive but also interesting, because many of the people that claim the elites do not have such influence were also the same people that argued before the Brexit that the elites would “never allow” the U.K. referendum to pass. So, do they have extensive influence, or don’t they?  This kind of selective blindness to the game being played prevents a whole host of otherwise intelligent people from grasping reality.

These folks need to finally admit to themselves that they were half right; the globalists would not allow the passage of the Brexit, UNLESS, a successful Brexit actually works in their favor.

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

Stock Market Crash 2015: The Dow Has Already Plummeted 2200 Points From The Peak

Stock Market Crash 2015: The Dow Has Already Plummeted 2200 Points From The Peak

Crack The Sky - Public DomainThose that watched their stocks steadily increase in value for years are now seeing all of that “wealth” disappear at a staggering pace.  The only way you actually make money in the stock market is if you get out in time, and many Americans are discovering that all or most of their gains have already been wiped out.  At this point, the Dow Jones Industrial Average has dipped below where it was at the end of the 2013 calendar year.  That means that nearly two years of gains have already been obliterated.  On Friday, the Dow was down another 272 points, and it is now down more than 2200 points from the peak of the market back in May.  For months, I have been detailing how things were setting up for this kind of financial crash in textbook fashion, and now events are playing out just as I warned.  But this is just the beginning – what is coming next is going to shock the world.

We have already seen the 8th largest and 10th largest single day stock market crashes in all of U.S. history happen within the past few weeks.  In fact, it was actually the very first time that we have ever seen the Dow fall by more than 500 points on consecutive trading days.

On August 25th, I warned that there would be some huge rebound days where we would see lots of “panic buying”, and on August 26th we witnessed the 3rd largest single day stock market increase in all of U.S. history.

Headlines all over America trumpeted the “fact” that the stock market had “recovered”, but the mainstream media failed to mention that the only two better days for the stock market were right in the middle of the stock market crash of 2008.

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

 

 

What Happens After A Crash?

What Happens After A Crash?

image

Our posts this week have dealt with analyzing the aftermath of the recent historic events that have unfolded in the stock market. However, of all the worthy topics that we have addressed, we have not directly addressed the most important one: the “post-crash” environment. Seeing as though the dramatic market decline in the latter half of August was the tremor from which all other price action has resulted, it stands to reason that we take a good look at it directly. In other words, how has the market historically behaved following similar “crashes”.

We put quotation marks around the word crash as the term is obviously open for interpretation. Certainly anyone who experienced the October 1987 events would be hard pressed to call anything since then a “crash”. However, for the sake of this study we are going to call the recent decline, and any similar such historical selloff, a “crash”. Specifically, we looked at all times in the S&P 500 since 1950 in which the index dropped at least 10% within 10 days (credit to fellow advisor and friend, Paul Schatz [@Paul_Schatz on Twitter] for the concept).

As it turns out, we identified 11 prior unique crash occurrences. By unique, I mean we eliminated any successive crashes and any crashes that were within the confines of a retest of a prior crash. Among the 11, 2 of them – July 1974 and September 2008 – continued to cascade lower, nearly unabated, for several more months. The other 9 resulted in an initial low in relatively short order. By initial low, we mean the first step within a market bottoming process. Those 9 are the subject of today’s Chart Of The Day, and this post. These are the months containing the 9 dates:

  • May 1962
  • May 1970
  • October 1987
  • August 1998
  • April 2000
  • March 2001
  • September 2001
  • July 2002
  • August 2011

 

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

European Stocks, Chinese Stocks And Commodities Are All Crashing – Are U.S. Stocks Next?

European Stocks, Chinese Stocks And Commodities Are All Crashing – Are U.S. Stocks Next?

European Stock Market Crash - Public DomainA global stock market crash has begun.  European stocks are crashing, Chinese stocksare crashing, and commodities are crashing.  And guess what?  All of those things happened before U.S. stocks crashed in the fall of 2008 too.  In so many ways, it seems like we are watching a replay of the financial crisis of 2008, but this time around the world is in far worse shape financially.  Global debt levels are at an all-time high, the 75 trillion dollar global shadow banking system could implode at any time, and there are hundreds of trillions of dollars in derivatives that threaten to wipe out major banks all over the planet.  The last major worldwide financial crash was almost seven years ago, and very little has been done since that time to prepare for the next one.  If global markets do not calm down, we could see carnage in the months ahead that is absolutely unprecedented.

For months, European authorities have been promising us that a “Grexit” is already “priced in” to the markets and that any “contagion” from the Greek crisis will be “contained”.  Of course everyone knew that was just a smokescreen.  Just in the past couple of days since the Greek “no” vote, European stocks have already been crashing.  The following comes from Zero Hedge

Does this look contained to you?

Portugal, Spain, and Italy all collapsing…

European Stocks Crashing - Zero Hedge

As I mentioned at the top of this article, European stocks started crashing well before U.S. stocks started crashing during the last financial crisis.  If you doubt this, just look at this chart, and this chart and this chart.

Will the same thing happen again this time?

And just like I have warned repeatedly, European bond yields have started to soar.  When bond yields go up, bond prices go down, so many bond investors are losing a tremendous amount of money right now.  Here is more from Zero Hedge

 

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

Guess What Happened The Last Time The Chinese Stock Market Crashed Like This?

Guess What Happened The Last Time The Chinese Stock Market Crashed Like This?

Question Button - Public DomainThe second largest stock market in the entire world is collapsing right in front of our eyes.  Since hitting a peak in June, the most important Chinese stock market index has plummeted by well over 20 percent, and more than 3 trillion dollars of “paper wealth” has been wiped out.  Of course the Shanghai Composite Index is still way above the level it was sitting at exactly one year ago, but what is so disturbing about this current crash is that it is so similar to what we witnessed just prior to the great financial crisis of 2008 in the United States.  From October 2006 to October 2007, the Shanghai Composite Index more than tripled in value.  It was the greatest stock market surge in Chinese history.  But after hitting a peak, it began to fall dramatically.  From October 2007 to October 2008, the Shanghai Composite Index absolutely crashed.  In the end, more than two-thirds of all wealth in the market was completely wiped out.  You can see all of this on a chart that you can find right here.  What makes this so important to U.S. investors is the fact that Chinese stocks started crashing well before U.S. stocks started crashing during the last financial crisis, and now it is happening again.  Is this yet another sign that a U.S. stock market crash is imminent?

Over the past several months, I have been trying to hammer home the comparisons between what we are experiencing right now and the lead up to the U.S. financial crisis in the second half of 2008.  Today, I want to share with you an excerpt from a New York Times article that was published in April 2008.  At that time, the Chinese stock market crash was already well underway, but U.S. stocks were still in great shape…

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

 

 

Lindsey Williams, Martin Armstrong And Alex Jones All Warn About What Is Coming In The Fall Of 2015

Lindsey Williams, Martin Armstrong And Alex Jones All Warn About What Is Coming In The Fall Of 2015

Warnings - Public DomainNot since the financial crash of 2008 have so many prominent people issued such urgent warnings about a specific time period.  Almost daily now, really big names are coming out with chilling predictions about what they believe is going to happen during the second half of 2015.  But it isn’t just that these people have a “bad feeling” about things.  The truth is that we are witnessing a confluence of circumstances and events in the second half of this year that is unprecedented.  This is something that I covered in a previous article that went mega-viral all over the Internet entitled “7 Key Events That Are Going To Happen By The End Of September“.  Personally, I have never been more concerned about any period of time than I am about the second half of 2015.  And as you will see below, I am definitely not alone.

Just a few days ago, I received an email that contained a chilling message from Lindsey Williams.  You can view the same message that came to my email right here.  According to Lindsey Williams, the elite insider that he is in contact with told him that there will be a global financial collapse between September and December of this year…

WARNING!

From Lindsey Williams: I just received an email from my Elite friend.

My Elite friend indicated that they have a World Wide Financial Collapse scheduled between September and the end of December 2015

You may have just THREE (3) months to prepare!

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

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase