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An Unexpected Warning From Goldman Sachs: “Something Is Not Quite Right”

It was just over 9 years ago today when we wrote  “The Incredibly Shrinking Market Liquidity, Or The Upcoming Black Swan Of Black Swans” in which we explained how as a result of the growing influence of HFT, quants and central banks, the market itself was breaking. We also highlighted what the culmination of the market’s “breakage” could look like:

liquidity disruptions could and will lead to unexpected market aberrations, such as exorbitant bid/ask margins, inability to unwind large block positions, and last but not least, explosive volatility: in essence a recreation of the market conditions approximating the days of August 2007, and the days post the Lehman collapse…

We even laid out some possible catalysts for a possible market crash: “continued deleveraging in quant funds, significant pre-market volatility swings as quants rebalance their end of day positions, increasing program trading on decreasing relative overall trading volumes.”

We saw all of the above elements briefly come together when on February 5 the market finally did break in one spam of exploding volatility, as its topology was torn apart by various, disparate elements, resulting in virtually all of the above materializing, if only for a short time, and blowing up the VIX, which soared by the most on record, rising from the lower teens to above 50 in the span of hours, while bankrupting countless vol sellers.

Since then, the same elements that coalesced in 2017 to pressure and keep the VIX at its lowest level in history  reemerged, and the “selling of volatility” once again reappeared as a dominant trading strategy, but not before Goldman Sachs wrote a report in March in which it echoed everything that we warned about over 9 years ago, and which increasingly many have said in the past decade, namely that the advent of algo trading and HFTs have collapsed market liquidity to the point where the market itself has become precariously brittle, prompting increasingly frequent flash crashes, and leading Goldman to conclude that, when it comes to market risk factors, “liquidity is the new  leverage” in a world in which HFTs are the marginal price setters:

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

What Will It Really Take to Avoid Collapse?

What Will It Really Take to Avoid Collapse?

Fifteen thousand scientists have issued a dire warning to humanity about impending collapse but virtually no-one takes notice. Ultimately, our global systems, which are designed for perpetual growth, need to be fundamentally restructured to avoid the worst-case outcome.

For a moment, the most important news in the entire world flashed across the media like a shooting star in the night sky. Then it was gone. Last month, over fifteen thousand scientists from 184 countries issued a dire warning to humanity. Because of our overconsumption of the world’s resources, they declared, we are facing “widespread misery and catastrophic biodiversity loss.” They warned that time is running out: “Soon it will be too late to shift course away from our failing trajectory.”

This is not the first such notice. Twenty-five years ago, in 1992, 1,700 scientists (including the majority of living Nobel laureates) sent a similarly worded warning to governmental leaders around the world. In ringing tones, they called for a recognition of the earth’s fragility and a new ethic arising from the realization that “we all have but one lifeboat.”

This second warning contains a series of charts showing how utterly the world’s leaders ignored what they were told twenty-five years earlier. Whether it’s CO2 emissions, temperature change, ocean dead zones, freshwater resources, vertebrate species, or total forest cover, the grim charts virtually all point in the same dismal direction, indicating continued momentum toward doomsday. The chart for marine catch shows something even scarier: in 1996, the catch peaked at 130 million tonnes and in spite of massively increased industrial fishing, it’s been declining ever since—a harbinger of the kind of overshoot that unsustainable exploitation threatens across the board.

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

America’s Greatest Threat Is Its Crazed “Leadership” And Its Brainwashed Population

America’s Greatest Threat Is Its Crazed “Leadership” And Its Brainwashed Population

A Russian Warning

By Dmitry Orlov, The Saker, Victor Katsap and Evgenia Gurevich

June 02, 2016 “Information Clearing House” – “ClubOrlov” – We, the undersigned, are Russians living and working in the USA. We have been watching with increasing anxiety as the current US and NATO policies have set us on an extremely dangerous collision course with the Russian Federation, as well as with China. Many respected, patriotic Americans, such as Paul Craig Roberts, Stephen Cohen, Philip Giraldi, Ray McGovern and many others have been issuing warnings of a looming Third World War. But their voices have been all but lost among the din of a mass media that is full of deceptive and inaccurate stories that characterize the Russian economy as being in shambles and the Russian military as weak—all based on no evidence. But we-—knowing both Russian history and the current state of Russian society and the Russian military–cannot swallow these lies. We now feel that it is our duty, as Russians living in the US, to warn the American people that they are being lied to, and to tell them the truth. And the truth is simply this:

If there is going to be a war with Russia, then the United States
will most certainly be destroyed, and most of us will end up dead.

Let us take a step back and put what is happening in a historical context. Russia has suffered a great deal at the hands of foreign invaders, losing 22 million people in World War II. Most of the dead were civilians, because the country was invaded, and the Russians have vowed to never let such a disaster happen again.

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

If You Don’t Warn The People, Their Blood Could Be On Your Hands

If You Don’t Warn The People, Their Blood Could Be On Your Hands

Apocalyptic - Public DomainWhy are so few voices warning the people about what is coming?  We stand at the door of a period of distress that will be unlike anything that any of us have ever known before.  And even though the signs are all around us, very few individuals appear to be willing to stand up and sound the alarm.  Instead, there seems to be a large number of people that are quite eager to criticize the watchmen.  Earlier today, I was having a conversation with a very prominent voice in the alternative media, and we were reflecting on this.  There are so many individuals out there that love to shoot arrows at those that are sounding the alarm, and yet they are doing so little to make a difference themselves.

It is easy to sit back on your sofa munching on potato chips as the world around you goes to hell, and it is easy to criticize those that have chosen to have the courage to stand up and warn the people.

But it is not easy to stand up and say the hard things that need to be said in a society that does not want to listen.

Yes, there are some watchmen out there that are doing a great job of proclaiming the warning message.  I have personally met a number of them, and I am proud to be their friends.

Unfortunately, they are few and far between.  Most people either don’t believe that we are on the precipice of disaster, they don’t care enough to warn others, or they are too busy criticizing those that are trying very hard to warn others.

 

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

Former Reagan Administration Official Warns That Financial Disaster Is Dead Ahead

Former Reagan Administration Official Warns That Financial Disaster Is Dead Ahead

Disaster - Public DomainWhy won’t the American people listen to the warnings?  David Stockman was a member of the U.S. House of Representatives from 1977 to 1981, and he served as the Director of the Office of Management and Budget under President Ronald Reagan from 1981 to 1985.  These days, he is running a website called “Contra Corner” which I highly recommend that you check out.  Stockman believes that a global “debt super-cycle” that has been building for decades is now bursting, and he is convinced that the consequences for the U.S. and for the rest of the planet will be absolutely catastrophic.  His findings are very consistent with what I have been writing about on The Economic Collapse Blog, and if Stockman is correct the times ahead of us are going to be exceedingly painful.

But right now, most people don’t seem to be in the mood to listen to these types of warnings.  Even though there is a mountain of evidence that the global economy has already plunged into recession, U.S. stocks had a great month in October, and so most Americans seem to think that the crisis has passed.

Of course the truth is that the stock market is not an accurate barometer of the economy and it never has been.  Back in 2008, almost everything else started to go downhill before stocks did, and the same thing is happening once again.  In a recent article, Stockman explained that stocks are surging to absolutely ridiculous levels even though corporate earnings are actually way down

At this point, 75% of S&P 500 companies have reported Q3 results, and earnings are coming in at $93.80 per share on an LTM basis. That happens to be 7.4% below the peak $106 per share reported last September, and means that the market today is valuing these shrinking profits at a spritely 22.49X PE ratio.

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

The Latest (and Dumbest) Central Bank Fraud

The Latest (and Dumbest) Central Bank Fraud

A Financial Reckoning

You go for a nice picnic on the slopes of Vesuvius… You spread out your tablecloth. You open your picnic hamper. You prepare for a relaxing afternoon in the warm October sun.

And then someone comes running down the mountain, warning that the volcano is going to blow up. You pack up your sausages and put a cork in the wine bottle… and rush to the car and drive away. Better to be safe than sorry. And then? Nothing happens.

Mt.OntakeWhen these ominous columns of smoke become visible, it may be time to make tracks. Or not. This image shows Mt. Ontake in Japan, which tends to erupt occasionally …
Photo credit: Kyodo / Reuters

Most of the time, you can safely ignore the nervous nellies and prophetic Cassandras. (According to legend, Apollo gave Cassandra the gift of prophecy. When she refused him, he spat into her mouth so she would never be believed.) But sometimes the worrywarts are right…

For the last 16 years, we’ve been writing a daily e-letter – first the Daily Reckoning and now the Diary. We saw the collapse of the dot-com bubble coming and warned readers. Most didn’t want to hear it; they were making good money in the stock market. It was a “new era.” And they didn’t want it to end.

But the Nasdaq collapsed in 2000… and didn’t recover until 15 years later. We believed at the time that the U.S. economy would follow Japan into a long, slow slump. With Addison Wiggin, we wrote a book about it, Financial Reckoning Day: Surviving the Soft Depression of the 21st Century.

Nasdaq BubbleThe Nasdaq’s bubble round-trip between the late 1990s and early 2000ds. No-one wanted to hear any warnings at the top (we still remember people buying profit-less wonder stocks for 100ds of dollars that don’t even exist anymore today) – click to enlarge.

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

8 Financial Experts That Are Warning That A Great Financial Crisis Is Imminent

8 Financial Experts That Are Warning That A Great Financial Crisis Is Imminent

Earth Clock Pocketwatch - Public DomainWill there be a financial collapse in the United States before the end of 2015?  An increasing number of respected financial experts are now warning that we are right on the verge of another great economic crisis.  Of course that doesn’t mean that it will happen.  Experts have been wrong before.  But without a doubt, red flags are popping up all over the place and things are lining up in textbook fashion for a new financial crisis.  As I write this article, U.S. stocks have declined four days in a row, the Dow is down more than 750 points from the peak of the market in May, and one out of every five U.S. stocks is already in a bear market.  I fully expect the next several months to be extremely chaotic, and I am far from alone.  The following are 8 financial experts that are warning that a great financial crisis is imminent…

#1 During one recent interview, Doug Casey stated that we are heading for “a catastrophe of historic proportions”

“With these stupid governments printing trillions and trillions of new currency units,” says investor Doug Casey, “it’s building up to a catastrophe of historic proportions.”

Doug Casey, a wildly successful investor who’s the head of the outfit Casey Research, is predicting doom and gloom for the global economy.

“I wouldn’t keep significant capital in banks,” he toldReason magazine Editor-in-Chief Matt Welch. “Most of the banks in the world are bankrupt.”

#2 Bill Fleckenstein is warning that U.S. markets could be headed for calamity in the coming months

Noted short seller Bill Fleckenstein, who correctly predicted the financial crisis in 2007, says he is one step closer to opening up a short-focused fund for the first time since 2009. In the meantime, Fleckenstein says the entire market could be heading for calamity in the coming months.

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

Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’

Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’

Nuclear War - Public DomainAfter all these years, the most famous investor in the world still believes that derivatives are financial weapons of mass destruction.  And you know what?  He is exactly right.  The next great global financial collapse that so many are warning about is nearly upon us, and when it arrives derivatives are going to play a starring role.  When many people hear the word “derivatives”, they tend to tune out because it is a word that sounds very complicated.  And without a doubt, derivatives can be enormously complex.  But what I try to do is to take complex subjects and break them down into simple terms.  At their core, derivatives represent nothing more than a legalized form of gambling.  A derivative is essentially a bet that something either will or will not happen in the future.  Ultimately, someone will win money and someone will lose money.  There are hundreds of trillions of dollars worth of these bets floating around out there, and one of these days this gigantic time bomb is going to go off and absolutely cripple the entire global financial system.

Back in 2002, legendary investor Warren Buffett shared the following thoughts about derivatives with shareholders of Berkshire Hathaway

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so
far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.

 

…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…

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