Tuesday, July 28, 2015

Housing Recovery? Case Shiller Home Prices Tumble Most In 10 Months

"The 0.18% month-over-month decline in Case Shiller home price index is the biggest since July 2014 which confirms the David Blitzer's view that "over the next two years or so, the rate of home price increases is more likely to slow than to accelerate." His biggest fear is that "first time homebuyers are the weak spot in the market," adding that prices are increasing about twice as fast as inflation or wages. Moreover, other housing measures are less robust - housing starts are only at about 1.2 million units annually, and only about half of total starts are single family homes. Sales of new homes are low compared to sales of existing homes..."

at http://www.zerohedge.com/news/2015-07-28/housing-recovery-case-shiller-home-prices-tumble-most-10-months

US Economic & Consumer Confidence Plunges To 10-Month Lows As "Hope" Crashes

"The Conference Board just reported that US Consumer Confidence, having bounced in June, has collapsed in July (and saw the bounce revised drastically lower). At 90.9, this is the lowest since September 2014 and is below the lowest economist estimate. More worrying is the crash in "hope" - as consumer expectations plunge from 92.8 to 79.9 (lowest since Feb 2014). This should not be a surprise since Gallup has been indicating fading confidence in its weekly survey for a while. 57% of Americans believe the US economy is "getting worse," which has left Gallup's Economic Confidence Index tumbling to its lowest in 10 months.
Confidence plunges...

Driven by a collapse in Hope...

Gallup's Economic Confidence Index continued its gradual, downward slide, reaching -14 for the week ending July 26. This represents a 10-month low for the index.

Meanwhile, 39% of Americans said the economy is "getting better,"while 57% said it is "getting worse."

As Gallup concludes, the findings are rather ominous...
Though Americans' confidence in the national economy has skewed negative for six months now, the recent drop of the current conditions component comes on the heels of a new path for solving the Greek debt crisis and amid a tumultuous period for Chinese stocks. The instability abroad could be fueling Americans' doubts about the health of the U.S. economy, not to mention that the Dow closed lower several days in a row last week.
*  *  *
This is not good news for stocks...

at http://www.zerohedge.com/news/2015-07-28/us-economic-consumer-confidence-plunges-10-month-lows-hope-crashes

Sometimes They Do Ring The Bell At The Top

"The worst market outcomes in history have always emerged after an overvalued, overbought, overbullish advance has been joined by deterioration in market internals..."

at http://www.zerohedge.com/news/2015-07-28/sometimes-they-do-ring-bell-top

Now Is The Time – Fear Rises As Financial Markets All Over The Planet Start To Crash

"Can you feel the panic in the air?  CNN Money’s Fear & Greed Index measures the amount of fear in the financial world on a scale from 0 to 100.  The closer it is to zero, the higher the level of fear.  Last Monday, the index was sitting at a reading of 36.  As I write this article, it has fallen to 7.  The financial turmoil which began last week is threatening to turn into an avalanche. On Sunday night, we witnessed the second largest one day stock market collapse in China ever, and this pushed stocks all over the planet into the red.  Meanwhile, the twin blades of an emerging market currency crisis and a commodity price crash are chewing up economies that are dependent on the export of natural resources all over the globe.  For a long time, I have been warning about what would happen in the second half of 2015, and now it is here.  The following is a summary of the financial carnage that we have seen over the past 24 hours…"

at http://theeconomiccollapseblog.com/archives/now-is-the-time-fear-rises-as-financial-markets-all-over-the-planet-start-to-crash

Marc Faber on Gold Market, Tail Risk, China, Dollar & Oil Prices

"Erin sits down with Marc Faber – editor and publisher of the Gloom, Boom & Doom Report and director of Marc Faber Ltd. Marc tell us what he why he believes this is the year that people will lose confidence in central banks and gives his usual nod to buying physical gold outside of the United States..."

at http://www.marcfabernews.com/2015/07/marc-faber-on-gold-market-tail-risk.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VbeD1fnQqm4

Chaos, Propaganda And Why This Global Panic Will Be So Brutal

"Today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events warned King World News about the coming chaos in Europe and why this global panic will be so brutal.  He also discussed the increased use of propaganda by the Western mainstream media.

Egon von Greyerz:  Eric, the world is bankrupt financially, economically, and morally, but through manipulation and deceit we are led to believe that all is well. It’s absolutely absurd that all the bubble assets are at highs, while wealth-preservation assets are totally bombed-out….

“But absurdities always end badly and so will this one. The elite and the media are continuing to fool the people about the state of the world. We have now been led to believe that the problem in Greece has been solved and therefore so has the looming disaster in Euroland.

Smoke, Mirrors And Propaganda
So once again the elite managed to kick the can down the road, but the can has now turned into a boulder. Once again the powers that be used their smoke and mirrors, together with propaganda, manipulation, and more debt that will never be repaid.
The situation in southern Europe is as bad as ever, regardless of what we are being told. And it’s not just Greece, Spain, and Portugal — it’s virtually every country in Europe. They all have debts and deficits that are unsustainable. They all have governments that are socialist and depend on debt and deficit spending.
Expect Chaos In France
And talking about countries that are in trouble, I have for some time said France will be the next major problem for Europe.  France’s economy is very weak and the French unions will ensure that the country will be paralyzed.
French unions strike all the time. I had an experience with that this week, driving from France to the UK. The unions had locked the entrance to the Eurotunnel, paralyzing all private and commercial traffic for many hours. As the French economy deteriorates, the country will eventually come to a standstill due to strikes.

What About Gold?
Turning to the gold market, the $50 smash that we saw on Monday of last week is yet another sign of the repression taking place around the world. If this kind of action were taking place in the stock market, there would be investigations and prosecutions.
But in the gold market, investment banks have carte blanche to do whatever they want because they are acting as agents for their respective governments.  A high gold price reflects the deceitful actions of governments as they totally mismanage their economies and destroy the value of their fiat currencies.

The West Has Already Depleted Most Of Its Gold
This is why the Western central banks have probably depleted most of their gold holdings in the last few years by selling or leasing gold to keep the price suppressed.  There is now probably very little physical gold left to be sold. But the fraud in the gold market is unlikely to continue for very long. The trigger for the change will be a downturn in global stock markets.
Both technically and fundamentally, stock and bond markets now look like they have reached a major top. People think that a correction may be coming, but what they are really facing is an end to the credit and asset bubbles of the last hundred years. I expect major falls in stocks and bonds this autumn, followed by a long-term secular bear market in the world economy as well as markets. When stock markets collapse, investors will believe that the governments will once again rescue the markets, but this time that will not be the case..."

at http://kingworldnews.com/chaos-propaganda-and-why-this-global-panic-will-be-brutal/

Monday, July 27, 2015

A fire is starting in the bond market

"Commodities had once again an ugly week. Copper hit the lowest level since June 2009. Gold dropped below $1,100 an ounce. Other metals dropped too. Agricultural commodities fell; corn plunged nearly 7% for the week. Crude oil swooned, with West Texas Intermediate dropping nearly 7% to $47.97 a barrel, a true debacle for energy junk-bond investors.
It was the kind of rout that bottom fishers a few months ago apparently didn’t think was possible...."

at http://wolfstreet.com/2015/07/26/riskiest-junk-bonds-blow-up-hit-high-grade-bonds-yields-spreads-rising-mad-frenzy-of-new-hg-issuance/#ixzz3h70DyLyR

Market Manipulation Goes Global

"Market manipulation has become standard operating procedure in policy circles around the world. All eyes are now on China’s attempts to cope with the collapse of a major equity bubble. But the efforts of Chinese authorities are hardly unique. The leading economies of the West are doing pretty much the same thing – just dressing up their manipulation in different clothes.
Take quantitative easing, first used in Japan in the early 2000s, then in the United States after 2008, then in Japan again beginning in 2013, and now in Europe. In all of these cases, QE essentially has been an aggressive effort to manipulate asset prices. It works primarily through direct central-bank purchases of long-dated sovereign securities, thereby reducing long-term interest rates, which, in turn, makes equities more attractive.
Whether the QE strain of market manipulation has accomplished its objective – to provide stimulus to crisis-torn, asset-dependent economies – is debatable: Current recoveries in the developed world, after all, have been unusually anemic. But that has not stopped the authorities from trying.
In their defense, central banks make the unsubstantiated claim that things would have been much worse had they not pursued QE. But, with now-frothy manipulated asset markets posing new risks of financial instability, the jury is out on that point as well..."

at http://www.project-syndicate.org/commentary/china-stock-market-bubble-intervention-by-stephen-s--roach-2015-07#W1FbiuMgqxpxkTZD.99

Shanghai On Track For Record Year With 69 Tonnes Gold Withdrawn In Latest Week

at http://jessescrossroadscafe.blogspot.com.tr/2015/07/shanghai-on-track-for-record-year-with.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+JessesCafeAmericain+(Jesse%27s+Caf%C3%A9+Am%C3%A9ricain)

Record Eurozone Borrowing: Public Debt Rises With Recovery; Greece a Small Sideshow Compared to Italy Read more at http://globaleconomicanalysis.blogspot.com/2015/07/record-eurozone-borrowing-public-debt.html#VlOxCgwftXHK4vVb.99

"The eurozone is supposedly in a state of recovery. However, in spite of that recovery, public debt and debt-to-GDP levels are still rising. Austerity is difficult to find in any realistic sense.
 The European Central Bank’s programme of quantitative easing has pushed down interest rates to ultra low levels, encouraging governments to borrow more in the early part of this year, despite turmoil in Greece.

Across countries that use the euro, average debt to gross domestic product reached 92.9 per cent in the first quarter of 2015, up from 92 per cent in the previous quarter and 91.9 per cent in the same period last year, according to figures from Eurostat, the EU’s statistical agency.

Greece remains the EU’s most indebted nation, with debt equal to 169 per cent of annual GDP, but Italy, Belgium, Cyprus and Portugal also carry government debt that exceeds 100 per cent of economic output.

The rise in debt comes despite a pickup in the pace of recovery in the eurozone, with the region’s economy expanding 0.4 per cent in the first quarter of this year — while the US saw a contraction.
Targets vs. Reality

The "Growth and Stability" pact on which the Eurozone was founded limits debt to 60% of GDP and deficits at no more than 3%.

Average Debt-to-GDP is 92.9% and rising. 

Eurostat Data shows Ireland, Greece, Spain, France, Cyprus, Portugal, Belgium, Slovenia, and Finland all exceeded 3% budget deficit requirement in 2014.

France and Spain have been given warnings and extensions on numerous occasions..."
at http://globaleconomicanalysis.blogspot.com/2015/07/record-eurozone-borrowing-public-debt.html#VlOxCgwftXHK4vVb.99

When Authorities "Own" The Market, The System Breaks Down: Here's Why

"Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Central planning asset purchases aimed at propping up prices destroy the essential price discovery needed by private investors.
Panicked by the possibility of declines that undermine the official narrative that all is well, authorities the world over are purchasing assets like stocks, bonds and mortgages directly. Central banks are explicitly taking on the role of buyers of last resort on the theory that if they place a bid under the market to arrest any decline, private buyers will re-enter the market once they detect that the risk of a drop has dissipated.
The idea is that once private buyers flood back into the market, central banks can unload the assets they bought to stem the panic. In this view, the market is not based on fundamentals such as revenues, profits and price-earnings ratios--it's all about confidence. If central banks restore confidence by reversing any drop with massive buying, this central-planning manipulation will restore the confidence of private investors.
When this restoration of confidence has been accomplished, private buyers will happily buy the central banks' stocks, bonds and mortgages. The central banks' portfolios of assets will shrink and the central banks will once again have "dry powder" to buy assets the next time markets falter.
This sounds reasonable in the abstract, but it doesn't work in the New Normal economy central banks have created. Let's consider a simple example to see why.
Let's start by recalling that prices are set on the margin, i.e. the last view shares, bonds or homes bought/sold. In a neighborhood of 100 houses, the price of each home is based on the last few sales which become the comparables appraisers use to establish the fair market value of all the nearby properties.
As the risk-on investment mindset switches to risk-off, house prices start declining. If the last home sold for $400,000, the next seller will expect at least $400,000. But since the mood has changed and risk has re-emerged, buyers are suddenly scarce. Homes listed for $400,000 don't sell. Eventually a house sells for $350,000 because the seller just needed to get out.
Suddenly, the value of the other 99 homes is in question.Home prices are sticky, meaning sellers refuse to believe the value of their home has declined. So listings of homes asking $399,000 pile up while potential buyers are wondering if $350,000 is a bit rich and perhaps $340,000 is the "real value."

at http://www.zerohedge.com/news/2015-07-27/when-authorities-own-market-system-breaks-down-heres-why

The Stock Market Will Start To Fall In July? The Dow Plummeted More Than 500 Points Last Week

"Was last week a preview of things to come? There are quite a few people out there that believe that the stock market would begin to decline in July, and that appears to be precisely what is happening. Last week, the Dow Jones Industrial Average fell by more than 530 points. It was the biggest one week decline that we have seen so far in 2015, and some are suggesting that this could only be just the beginning. By just about any measurement that you might want to use, the stock market is overvalued. But we have been in this bubble for so long that many people have come to believe that this is “the new normal”. In fact, earlier today someone that I know dropped me a line and suggested that our financial overlords may be able to use the tools at their disposal to get this current bubble to persist indefinitely. Unfortunately, the truth is that no financial bubble ever lasts forever, and right now some very alarming things are starting to happen behind the scenes. Over the past couple of weeks, the smart money has been dumping stocks like crazy, and the lack of liquidity in the bond markets is beginning to become acute.  Could it be possible that another great financial crisis is just around the corner?
Last week took a lot of investors by surprise. The following is how Zero Hedgesummarized the carnage…
-Russell 2000 -3.1% – worst week since Oct 2014 (Bullard)
-Dow -2.8% – worst week since Dec 2014
-S&P -2.1% – worst week since Jan 2015
-Trannies -2.8% – worst week since Mar 2015
-Nasdaq -2.2% – worst week since Mar 2015
The talking heads on television were not quite sure what to make of this sudden downturn. On CNBC, analysts mainly blamed the usual suspects…"

at http://theeconomiccollapseblog.com/archives/the-stock-market-will-start-to-fall-in-july-the-dow-plummeted-more-than-500-points-last-week

JIM ROGERS - Russia and China About To Announce The End Of The US Dollar Era

"The dollar will lose its dominant role - that message from President Putin as Russia and China agree to boost trade operations in their national currencies. This comes on the heels of a major gas deal, called the Western route....which coupled with a previous pipeline agreement will make Beijing Russia's largest consumer. RT is joined by Jim Rogers, author and financial commentator..."

at http://jimrogers1.blogspot.com.tr/2015/07/jim-rogers-russia-and-china-about-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+blogspot/WOHK+(Jim+Rogers+Blog)

The Most Dangerous Bubble In History And Why The Central Banks Are Now In A Panic

"On the heels of another chaotic trading week in major markets, today one of the top economists in the world sent King World News an incredibly powerful piece warning about the most dangerous bubble in history and why the central banks are now in a panic.  Below is the fantastic piece from Michael Pento.

July 24 – (King World News) – One of the most ironic and fascinating characteristics about an asset bubble is that central banks claim they can’t recognize one until after it bursts. And Wall Street apologists tend to ignore the manifestation of bubbles because the profit stream is just too difficult to surrender. 
The excuses for piling money into a particular asset class and sending prices several standard deviations above normal are made to seem rational at the time: Housing prices have never gone down on a national basis and people have to live somewhere, the internet will replace all brick and mortar stores, and perhaps the classic example is that variegated tulips are so rare they should be treated like gold…."

at http://kingworldnews.com/the-most-dangerous-bubble-in-history-and-why-the-central-banks-are-in-a-panic/

Andrew Maguire – A Gold And Silver Tsunami Is Forming As The Shorts Are Now Going To Get Destroyed

"Today whistleblower and London metals trader Andrew Maguire warned King World News that a gold and silver tsunami is forming as the shorts are now going to get destroyed.
On the heels of the historic trading action in gold and silver, Andrew Maguire is giving KWN readers around the world access to his Weekly Commentary that has just been released to his subscribers.
July 25 – (King World News) – I will start this week’s commentary with a summary of the week’s extraordinary action and defer catching up on some exceptionally good member questions to early next week. During the week, in our live sessions, we have looked in granular detail at the footprints that lead into and out of the gold raid that commenced in the early hours of Monday morning and how China was going to be falsely blamed for the selloff (which it subsequently was), yet an analysis of the footprints leads directly to the BIS (Bank for International Settlements) desk….

I draw this conclusion because, unusually, the selloff commenced in the OTC (over-the-counter) FX gold market, which concurrently picked up in the Comex tripping off market halts just before China sold. What is missed by all the commentary out there is that while the Comex was halted, the OTC markets continued to operate unencumbered.
BIS / Insider Activity Ramps Up In Gold And Silver Markets
I have provided analysis of this insider favored setup in prior commentaries, illustrating how this puts US-centric traders at a distinct disadvantage to the BB's (Bullion Banks) /BIS and all other global players who can continue to trade/hedge in the spot markets in any size while the futures and options markets are frozen. The concurrent OTC (over-the-counter) FX Gold action around these market halts were not picked up by any commentator/analyst and strongly point to BIS/Insider LBMA Bullion Bank activity.
We are quite used to thin market raids, sometimes suggesting official and other times the usual suspect Eastern European outfit operating in the COMEX market, (which I have reported to the CFTC as likely having an association with at least one market-making LBMA Bullion Bank), but this raid was extraordinary in several respects. Never before have we evidenced a permanently & deeply backwardated futures market print a flash $7.37 PREMIUM to the much larger physically related unallocated spot OTC markets. Also, one only has to look at the tiny GCQ5 (August Gold Futures Contract) volume it required to take gold down a full $50. Only some 7,500 lots traded in the Open Interest exchange BUT 1⁄2 of these flash orders were buys.
Quite clearly, the OTC markets were utilized to bridge through the CME market halts and ensure that the highly visible targeted longstanding multi-year Comex long stops were cleaned out. Immediately after the flash order, the spot markets reverted to trading back at a premium to not just front month August futures but between 50-90c premiums to December. These premiums are now embedded and deepened and UN-ARBITRAGED into Friday. This is a bullish condition not seen since the lows of 2008, in fact, far more so than at any time in memory. Vend in the historic naked short spec position with COT’s (Commercial Traders) 1/1 on the long side of this deeply oversold structural imbalance and all there is left to propel gold lower is the residual chart-painted historic bearish sentiment.
This is not enough in the face of unseasonable physical market bargain hunting ignited in the Middle East, China, and India. This is evident in the UNLEVERAGED physical markets, which have a lagging effect but, as in every synthetically driven market bottom, will backwash against the LEVERAGED paper market. This is imminent and could have occurred on Friday.
Historic Short Squeeze Now At Hand
SI (Silver Futures Contract) had not cooperated with GC (Gold Contract) driven selling and was holding up well throughout the week. In fact, it had closed its small gap within hours on Monday, exceeded it and then refused to stay down. This made it difficult for GC (Gold Contract) shorts to maintain traction and, with such deeply oversold conditions, risked a loss of momentum and the danger of a reversal. Given that momo’s /speculators have used profits to fund fresh short lots, this places heavily margined short stops at very low vulnerable levels, exposing a series of gaps.
On Friday, SI (Silver Futures Contract) was targeted by algorithms forcing a final capitulative flush to clean out residual multiyear long stops below Mondays $1,080 GC (Gold Contract) low and very strong $14.50 SI (Silver Futures Contract) support. It looked to me like the final flush and most certainly a massive bargain picked up in large tonnage size in both silver and gold on our physical wholesale platforms. ABX, (Allocated Bullion Exchange) is not officially launched yet but we are already picking up good size wholesale demand ahead of the official launch, especially in silver 100oz bars.
To sum up, by early Friday afternoon, with GC (Gold Contract) being continually capped at the 1080 level, the following unedited post before the Friday ramp pretty much sums up the week's capitulative action. Note the unprecedented backwardations that clearly evidence the LBMA is on its heels.
My Friday 2.29pm BST Note To Subscribers: 
“Cobasis and backwardations are at extremes. December futures are now oscillating between at an unprecedented UN-ARBITRAGED 55c to 90c. Premium to cash unallocated gold, much higher to allocated, furthermore the December low was $3.17 below the cash market low. There is zero doubt COT’s are covering into all capitulations and taking 100% of the long side of all short sales. Also OI has shrunk by 22,600 lots Friday through Wednesday lots despite large size fresh spec short additions. We have seen nothing like this since 2008 capitulation point.
BB’s will commence the rinse once bubble territory spec shorting wanes. Already seeing large wholesale restocking related to Middle Eastern through India and China demand plus sovereigns soaking up all GLD and ETF redemptions. Unleveraged physical has a lagging effect on leveraged futures selling but in these unprecedented conditions the PM’s are so close to a bottom the risk is to the shorts. VERY close to bubble-like capitulation, if not already achieved. Note COMEX silver and gold additions while ETF’s capitulate into sovereign hands. China is surreptitiously accumulating reserves.”
Options sweet spots are also evidencing COT bullish footprints. As noted this week, the put selling appears to be largely in the hands of spec and Managed Money sellers. This places market making COT’s (Commercial Traders) on the long side of these bets. This is an inverse situation to longs selling calls and protecting these strikes, (from a close above). As of Friday, the GC (Gold Contract) sweet spot was still around $1,150 and SI (Silver Contract at $15.50, so interesting opex structures into Tuesday.
Increased Bullion Bank And MSM Gold Bashing As PM Markets Ready To Turn
The evidence is all there and goes directly against the Bullion Bank and Mainstream Media calls for lower and lower prices, (yes you, Jeff Currie, and the usual crew), just as they did at every capitulative bottom. Painting bearish sentiment is the last phase of a centrally planned rigged selloff. The COT’s are BUYERS. However, by driving sentiment down to the lowest at any point in history, they have managed to trick many dip buyers to stand aside waiting for the all-hallowed $700-$1000 levels. Trying to bottom-fish with risk reward, clearly favoring the upside is, IMO, just how $9 silver and $700 gold was missed in 2008 while the usual sirens called for $250 gold and $5 silver back then, while they were rinsing out clients'/muppets' pockets.
Once price rebounds, these side-line buyers will get on-board fearing missing the rally but it will be some $100-$150 higher and given the Open Interest structure and well-placed commercials, only then will Commercial Traders seek to hedge against them. This wash-and-rinse structure only differs by the scale of the extended short Open Interest in weak hands. The polar opposite of when naked spec longs were pushing $49 silver and $1,900 Gold and discussed two weeks ago, SI (Silver Futures Contract) had reached a point some 50,000 lots of spec Open Interest further extended, (7,700 tonnes!) than it was at the naked long $49 highs..."
at http://kingworldnews.com/andrew-maguire-a-gold-and-silver-tsunami-is-forming-as-the-shorts-are-now-going-to-get-destroyed/

Legend Who Oversees $175 Billion Warns Global Ponzi Scheme Now Showing Signs Of Coming Unraveled

"On the heels of more weak economic data releases from the United States, a legendary chairman & CEO overseeing more than $175 billion, who is one of the most respected men in the financial world, issued a major warning.

Rob Arnott: “Commodities have crashed. Emerging-market bonds have cratered. Emerging-market stocks have had a grinding 4 1/2-year bear market. TIPS are down. High-yield bonds are down. So pretty much everything outside of mainstream stocks is flat to down over the last 30 months.

Mainstream Media Propaganda Ramps Up As The World Begins To Unravel
So when the talking heads on TV are talking about ‘New high, new high, new high. Isn’t this wonderful?,’ what they are talking about is the one and only market that is going up, which is mainstream stocks.
It’s plausible that the Fed decides, ‘No, we can’t afford to take the risk of raising rates. Let’s continue to extend and pretend.  Let’s continue to keep rates artificially low and let’s add more fuel to the problems that we’ve already got with this mono-polar bull market — stocks-only bull market. Let’s try to keep that going.’ At some point the markets stop paying attention to the Fed, stop giving it credibility because of this silly game.”
The Global Ponzi Scheme Is Headed For Melt Down
Eric King: “Rob, we’ll bring Greece into the conversation. There’s been a lot of turmoil over there. But with the interconnectivity of global markets and what many of the billionaires and top people in the world are talking about is instability, almost a terrifying instability in the global financial system because of the interconnectivity of more $1 quadrillion of derivatives. It has people on edge. You and I both know that you cannot have banks levered to where they are many multiples of their country’s entire GDP. The madness going on out there and the instability that is ever-present in the system — you talk about pillars — it feels as if at any time a pillar could come out from underneath what some have called ‘The global Ponzi scheme,’ and it could just melt down.”
Rob Arnott: “I like the expression ‘Global Ponzi scheme’ because that’s what it is. Greece is caught between a rock and a hard place because they are the poster child for ‘Don’t go here if you belong in the euro. Don’t let your country go down this path.’ And so they are being turned into an object lesson.
The simple fact is that their debt burden is too large and they can’t afford to pay it. Reciprocally, the eurozone can’t afford to acknowledge default because if they say, ‘These bonds are bust,’ then they have to write them off and a lot of banks go under. The too-big-to-fail problem comes into play..."

at http://kingworldnews.com/legend-who-oversees-175-billion-warns-global-ponzi-scheme-now-showing-signs-of-coming-unraveled/

Friday, July 24, 2015

12 Ways The Economy Is Already In Worse Shape Than It Was During The Depths Of The Last Recession

"Did you know that the percentage of children in the United States that are living in poverty is actually significantly higher than it was back in 2008?  When I write about an “economic collapse”, most people think of a collapse of the financial markets.  And without a doubt, one is coming very shortly, but let us not neglect the long-term economic collapse that is already happening all around us.  In this article, I am going to share with you a bunch of charts and statistics that show that economic conditions are already substantially worse than they were during the last financial crisis in a whole bunch of different ways.  Unfortunately, in our 48 hour news cycle world, a slow and steady decline does not produce many “sexy headlines”.  Those of us that are news junkies (myself included) are always looking for things that will shock us.  But if you stand back and take a broader view of things, what has been happening to the U.S. economy truly is quite shocking.  The following are 12 ways that the U.S. economy is already in worse shape than it was during the depths of the last recession…
#1 Back in 2008, 18 percent of all Americans kids were living in poverty.  This week, we learned that number has now risen to 22 percent
There are nearly three million more children living in poverty today than during the recession, shocking new figures have revealed.
Nearly a quarter of youngsters in the US (22 percent) or around 16.1 million individuals, were classed as living below the poverty line in 2013.
This has soared from just 18 percent in 2008 – during the height of the economic crisis, the Casey Foundation’s 2015 Kids Count Data Book reported.
#2 In early 2008, the homeownership rate in the U.S. was hovering around 68 percent.  Today, it has plunged below 64 percent.  Incredibly, it has not been this low in more than 20 years.  Just look at this chart – the homeownership rate has continued to plummet throughout Obama’s “economic recovery”…"

at http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

"If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time.  This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now.  On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months.  When global economic activity slows down, demand for raw materials sinks and prices drop.  So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next.  And what they are telling us right now is that we are rapidly approaching a global economic meltdown.
If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up.  But instead, prices continue to go down.
The Bloomberg Commodity Index just hit a brand new 13-year low.  That means that global commodity prices are already lower than they were during the worst moments of the last financial crisis…"
at http://theeconomiccollapseblog.com/archives/commodities-collapsed-just-before-the-last-stock-market-crash-so-guess-what-is-happening-right-now

Marc Faber : The U.S. Stock Market could "easily" drop up to 40 percent

"Why US stocks could drop up to 40%
The U.S. stock market could "easily" drop 20 percent to 40 percent, closely followed contrarian Marc Faber said Wednesday—citing a host of factors including the growing list of companies trading below their 200-day moving average. In recent days, "there were [also] more declining than advancing stocks, and the list of 12-month new lows was very high on Friday," the publisher of The Gloom, Boom & Doom Report told CNBC's "Squawk Box."

at http://www.marcfabernews.com/2015/07/marc-faber-us-stock-market-could-easily.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VbKVmfnQqm4

Strong Deflationary Forces despite all the Money Printing by Central Banks

"Via CNBC :
"In the U.S., the market could easily drop 20 percent to 40 percent," he said. The downside risk is lower in already depressed markets outside the U.S., he added..."

at http://www.marcfabernews.com/2015/07/strong-deflationary-forces-despite-all.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VbKVlPnQqm4

Marc Faber recommends Gold & Real Estate for an Investments outside The Banking System

"“Gold is insurance if the banking system fails,” he said. “As an investor I’d like to own something outside the banking system, and that includes real estate, art and gold.”
Mr. Faber, publisher of the “Gloom, Doom and Boom” newsletter, made his comments Thursday at the CFA Analyst Seminar in Chicago in a presentation titled, “Inflating Asset Markets and Deflating Real Economic Activity? Strategies for Global Investors.”

at http://www.marcfabernews.com/2015/07/marc-faber-recommends-gold-real-estate.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VbKVjvnQqm4

Central Banks Ready To Panic — Again

"Less than a decade after a housing/derivatives bubble nearly wiped out the global financial system, a new and much bigger commodities/derivatives bubble is threatening to finish the job. Raw materials are tanking as capital pours out of the most heavily-impacted countries and into anything that looks like a reasonable hiding place. So the dollar is up, Swiss and German bond yields are negative, and fine art is through the roof.
Now emerging-market turmoil is spreading to the developed world and the conventional wisdom is shifting from a future of gradual interest rate normalization amid a return to steady growth, to zero or negative rates as far as the eye can see. Here’s a representative take from Bloomberg:..."
at http://dollarcollapse.com/money-bubble/central-banks-preparing-to-panic-again/

The Terrifying Ticking Time Bomb, Gold And A World On The Edge Of Collapse

"Today a legend in the business sent King World News a powerful piece that warns about a terrifying $250 trillion time bomb.  John Ing, who has been in the business for 43 years, also discussed parallels to the Great Depression, gold, and a world on the edge of collapse.
KWN will be releasing interviews all day today with Eric Sprott and many others, but first…
July 24 (King World News) – Identity problems? Rachel Dolezal wants to be black, Bruce Jenner a woman, or how about Donald Trump for President. Identity problems? No, it is identity theft comparable to the “happy times are here again” mania, fueled by cheap debt and a borrowing binge which has led to overvaluation and risk. In much of the globe, we have negative interest rates pushing investors into US dollar denominated assets like stocks, real estate and for a very long time, US bonds.
The US dollar, once viewed as a sick currency less than a decade ago, is now viewed as a safe haven following the Euro debacle. But the default risk was not just a Greek story. Overlooked is that Ukraine recently declared a “credit event”, raising the risk of default. To date there are more than ten countries that are vulnerable. Argentina is already in technical default and Puerto Rico filed this month owing $72 billion. The debt tide has turned…."

at http://kingworldnews.com/the-terrifying-ticking-time-bomb-gold-and-a-world-on-the-edge-of-collapse/

Richard Russell – Despite Massive Propaganda, U.S. Economy Sinking, John Williams Is Right, The Big Lie & The War In Gold

"On the heels of continued volatile trading in key global markets, the Godfather of newsletter writers, 90-year-old Richard Russell, warned that despite massive propaganda, the U.S. economy is sinking and John Williams is right as we are all being told the big lie and the war in the gold market continues to rage.
Richard Russell:  "I strongly suspect that John Williams is right, that the US, despite all the frantic government and Fed propaganda, has slid back into recession. This is something I am not happy about since I feel the future of the human race depends very much on the brilliance and the democratic desires of the United States. Studying the market figures, I can’t say that the market is going my way. 
An hour before the close, the Dow is still under 18,000 and down 126. The Transports are down 168 and hovering just above the critical 8,000 level. The Nasdaq is down 25 and holding just above the big number resistance of 5,000. Gold is down 4.8 to 1086.7 and silver is down 0.18 to 14.55.

Fed And Its Bullion Bank Agents Hard At Work Suppressing The Gold Price
Somebody (probably the Fed) does not want to see gold close higher. Any time gold is higher near the close, somebody comes forth and battles gold lower.
Gold is the anti-dollar, and as such, it’s also the anti-Federal Reserve. In its desire to control the US economy, the Fed has literally outlawed silver and gold and produced its own variety of fiat currency.

The Big Lie
Thus we have the outlandish situation where fiat dollars are legal tender and Americans are told that silver and gold are ancient relics of the past. If people are told a lie often enough, they will begin to believe it. Ultimately, the truth will prevail. As Jesus said, "Know the truth and the truth will set you free."

at http://kingworldnews.com/richard-russell-despite-massive-propaganda-u-s-economy-sinking-john-williams-is-right-as-we-are-all-being-told-the-big-lie-the-war-in-gold-continues-to-rage/

Sunday, July 12, 2015

Nomi Prins – Keynote Speaker At World Bank-Fed-IMF Conference, On The Frightening Reason Why We’re All Doomed

"Nomi Prins:  “It isn’t just about China.  This is something that is prevalent throughout the world.  No market, not in the United States and not in Europe, is immune from the fact that the money that’s in these markets is artificially created.  It’s not growth money.  It’s not earned money.  It’s artificially created money by the central banks of the world through the private banking system into these markets and it can evaporate as quickly as it came in.
When you have all this cheap, artificial liquidity perpetuating all the global market increases, when there’s any factor that comes in to disturb the idea of that liquidity being around forever or markets going up forever, things turn around very quickly…."

at http://kingworldnews.com/nomi-prins-keynote-speaker-at-imf-fed-world-bank-conference-on-the-frightening-reason-why-were-doomed/

As Global Asset Bubbles Implode, Synthetic Economies To Enter Monstrous Worldwide Depression

"On the heels of a wild trading week, today one of the top economists in the world sent King World News an incredibly powerful piece warning that as asset bubbles implode, synthetic economies will enter a monstrous worldwide depression.  Below is the fantastic piece from Michael Pento.
July 12 – (King World News) – Amid an intense global economic slowdown that began in 2008, China’s economy amazingly appeared to be unaffected. Defying the worldwide real estate collapse, China’s GDP grew by an impressive 8.7 percent in 2009. Fueled initially by a $586 billion stimulus package, China would end up plowing an additional $20 trillion into a fixed-asset bubble that was designed to produce the government’s desired GDP print…."

at http://kingworldnews.com/as-global-asset-bubbles-implode-synthetic-economies-to-enter-monstrous-worldwide-depression/