There Are Conniptions Around The Financial World ATM
Dec 16, 2014 11:59:02 GMT 10
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Post by Matilda on Dec 16, 2014 11:59:02 GMT 10
I wasn't going to write anything because I'm feeling rather low after yesterday and listening to the hostage siege unfold live around 2 this morning really drained me. I was really angry earlier but that has passed and I just feel gutted for those people. But after a pep talk by Hubby I feel its important that what I read earlier should be shared with you all. You might say that it doesn't affect us here in Australia, but it does. There might be one tiny little bit that will help you, or there may be nothing at all.
One Foot On A Banana Peel.........The Other In A Grave, by Bill Holter www.globalresearch.ca/gold-financial-markets-and-the-international-monetary-system-one-foot-on-a-banana-peel-the-other-in-a-grave/5419975
Never before have I seen so many pieces of information to be put together in the span of just one week. This past week we were bombarded with connectable dot after connectable dot, nearly each and every one of them on their own would have caused a panic 30 years ago. I say "30 years ago" because this was before the 1987 crash, this was before anything and everything, nailed down or not ...was levered many times over in what eventually became an inflation orgy. 30 years ago, black was not white, wrong was not right and "debt" was still in its infancy of being money. Fast forward to present day and we now have a monetary system with one foot on a banana peel and the other in a grave!
Let me list what I saw this past week as some very ugly dots to be connected, by no means is this list complete but I think you'll get the point by the time you are done reading. Early in the week, China announced changes to their collateral rules for the credit quality necessary for corporate bonds to be accepted as collateral (now only AAA and AA bonds can now be used). This caused a 5.6% drop the following day in their stock market which did ripple around the world to other stock markets. This is significant because without a doubt it was an act of tightening credit and will directly decrease the liquidity available for the Chinese exchange. This is not a one day event as CNBC would lead you to believe.
Next, oil has outright crashed in price and finished the week under the recently unthinkable number of $60... and the repercussions have just started to be felt. The 130 year old firm Phibro announced they will be closing up shop while oil exporting currencies (including the ruble) were destroyed. There had been discussion over the last several weeks regarding the future of the shale industry, this discussion is now ended in that no one can say "this will blow over" any longer. $100's of billions of extended credit is now impaired and this credit market has crashed to yields now over 10%. The crash in oil all by itself is enough to ruin the financial system but by no means was alone this past week.
The next dot to connect was the spending package passed by Congress. As Zerohedge reported Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For , the U.S. public was sold down the river. Just a month after the Republicans won both houses of Congress, they have now allowed the banks to stuff their derivatives portfolios under the FDIC umbrella. Over $300 trillion worth! Prior to this, the FDIC insured over $6 trillion worth of bank deposits with a whopping $54 billion reserve... How could any "true American" have voted for this? Even a calculator with no batteries can understand this will unequivocally bankrupt the country, yet this law is passed little over one month after an election by the American public put trust in the Republicans as their "last hope"? Was this passed by mistake or do you think they knew what they were doing? Was Obamacare passed by mistake? Comically, the architect of Obamacare testified to Congress after calling the American public stupid ...a traitor testifying to traitors, they should all be strung up for TREASON! Whether you know it or not, Congress just called the American public stupid also by passing this traitorous law.
I asked in the above paragraph if you thought they "knew what they were doing"? The Treasury Dept. this past week put out to a bid request to supply "survival packs" for their 3,800 bank examiners. For what possible reason could bank examiners need a survival "fanny pack"? Does the Treasury know something they are not telling us? freebeacon.com/issues/treasury-department-seeking-survival-kits-for-bank-employees/ I would also like to ask why the Chicago Fed is "bricking up" their ground floor windows? Are they expecting something? Rioting maybe?
If all of the above wasn't enough for you, don't worry, there is more ...and even bigger news! Early in the week, Russia announced they are moving up the testing for their newly proposed currency clearing system. It had been planned for a May, 2015 testing phase followed by going live, this is now moved up to Dec. 15th, yes, this Monday! Why? Why are they moving up the start date? Presumably they also know something or see the immediate need to be able to clear funds for trade outside of SWIFT. If you think this one through, Russia will have the ability to facilitate ANY trade between ANY two or more parties while excluding the use of dollars ...and the prying eyes of America! This will mean whatever sanctions on Russia will be lessened, it also means SWIFT is no longer the only game in town. Maybe the BRICS et al will no longer care, or need to use SWIFT? No, not "maybe", definitely.
So far I haven't even mentioned gold but don't worry, we got two huge pieces of news. In case you had not noticed, gold/silver were the best performing asset class for a truly dismal financial week. First, Austria is now considering repatriating all of her gold. I mentioned last Monday in "The Mother of all Bank Runs" that Austria could be next in line, and if so, the stage would then be set for a "northern euro" leaving the southern basket cases to fend for themselves. I plan to write about this tomorrow so I will leave this for a separate piece. While the ramifications are very wide, the "intent" seems to be very narrow, I will explain this tomorrow.
The other big gold news and one that can be categorized in the "do you think they know something" category came from CME/COMEX. They will begin with "collars" for nine different metals, including silver and gold. The collars will begin to kick in and trading will cease if gold moves $100 or silver $3 with ultimate daily collars of $400 and $12. I won't bore you with the specifics, more importantly you must wonder "why?" and "why now?". How often have we seen $100 moves in gold, much less $400? I believe it has been only one time that gold moved over $100 in a day. We have seen $3 moves (almost all down) in silver but these were almost exclusively during evening trade sessions and almost always on Sunday nights. Does CME really see $12 moves in silver coming? Again, "are they expecting something?" we don't know about ...or maybe they are afraid silver could go to zero in less than two days trading and don't want to see that happen (I believe if it was possible, this would have already been facilitated)? Or, more likely, are they expecting huge volatility and upside moves they would like to retard and slow down? Add this one to the category "they know something and are readying for it"!
So there you have it, we had a disastrous week for financial assets and huge news, most of which points to sides being chosen and "official readying" for upcoming events. I might add that a 6th Hindenburg omen was spotted on Thursday which most probably bodes very poorly for the stock market(s). With all of these events lining up, one might think the U.S. public is in a somber mood. But no, consumer sentiment numbers reported Friday saw a huge upswing ...either the public is not very bright or the reported numbers are bogus ...or both?
Let me finish by saying this, the market action is clearly showing we have entered a credit contraction. Any credit contraction is a death sentence to a system which is overleveraged and already standing on a banana peel. The markets are trying to say this at the same time "official" moves are portraying something very big is afoot. Central banks are now collectively "running the bank". If one had no prior knowledge of anything financial prior to this week, what was learned this week alone is enough to know something is very wrong, something very bad is going to happen and it is going to happen very soon. I would suggest if your plans are not already finalized, do not wait until the new year to do so!
AND NOW THIS FROM www.shtfplan.com www.shtfplan.com/headline-news/bloodbath-is-this-the-start-of-the-next-major-financial-crisis_12152014
We Just Witnessed The Worst Week For Global Financial Markets In 3 Years
By Michael Snyder
Is this the start of the next major financial crisis? The nightmarish collapse of the price of oil is creating panic in financial markets all over the planet. On June 16th, U.S. oil was trading at a price of $107.52. Since then, it has fallen by almost 50 dollars in less than 6 months. This has only happened one other time in our history. In the summer of 2008, the price of oil utterly collapsed and we all remember what happened after that. Well, the same patterns that we witnessed back in 2008 are happening again. As the price of oil crashed in 2008, so did prices for a whole host of other commodities. That is happening again. Once commodities started crashing, the market for junk bonds started to implode. That is also happening again. Finally, toward the end of 2008, we witnessed a horrifying stock market crash. Could we be on the verge of another major one? Last week was the worst week for the Dow in more than three years, and stock markets all over the world are crashing right now. Bad financial news continues to roll in from the four corners of the globe on an almost hourly basis. Have we finally reached the “tipping point” that so many have been warning about?
What we witnessed last week is being described as “a bloodbath” that was truly global in scope. The following is how Zero Hedge summarized the carnage…
WTI’s 2nd worst week in over 3 years (down 10 of last 11 weeks)
Dow’s worst worst week in 3 years
Financials worst week in 2 months
Materials worst week since Sept 2011
VIX’s Biggest week since Sept 2011
Gold’s best week in 6 months
Silver’s last 2 weeks are best in 6 months
HY Credit’s worst 2 weeks since May 2012
IG Credit’s worst week in 2 months
10Y Yield’s best week since June 2012
US Oil Rig Count worst week in 2 years
The USDollar’s worst week since July 2013
USDJPY’s worst week since June 2013
Portugal Bonds worst week since July 2011
Greek stocks worst week since 1987
The stock market meltdown in Greece is particularly noteworthy. After peaking in March, the Greek stock market is down 40 percent since then. That includes a 20 percent implosion in just the past three trading days.
And it isn’t just Greece. Financial markets all over Europe are in turmoil right now. In addition to crashing oil prices, there is also renewed concern about the fundamental stability of the eurozone. Many believe that it is inevitable that it is headed for a break up. As a result of all of this fear, European stocks also had their worst week in over three years…
European stock markets closed sharply lower on Friday, posting their biggest weekly loss since August 2011, as commodity prices continued to fall and and shares in oil-related firms came under renewed pressure from the weak price for crude.
The pan-European FTSEurofirst 300 unofficially ended 2.6 percent lower, down 5.9 percent on the week as the energy sector once again weighed heavily on wider benchmarks, falling over 3 percent.
But despite all of the carnage that we witnessed in the U.S. and in Europe last week, things are actually far worse for financial markets in the Middle East.
Just check out what happened on the other side of the planet on Sunday…
Stock markets in the Persian Gulf got drilled Sunday as worries about further price declines grew. The Dubai stock index fell 7.6% Sunday, the equivalent of a 1,313-point plunge in the Dow Jones industrial average. The Saudi Arabian market fell 3.3%.
Overall, Dubai stocks are down a whopping 23 percent over the last two weeks, and full-blown stock market crashes are happening in Qatar and Kuwait too.
Like I said, this is turning out to be a truly global financial panic.
Another region to keep an eye on is South America. Argentina is a financial basket case, the Brazilian stock market is tanking big time, and the implied probability of default on Venezuelan debt is now up to 93 percent…
Swaps traders are almost certain that Venezuela will default as the rout in oil prices pressures government finances and sends bond prices to a 16-year low.
Benchmark notes due 2027 dropped to 43.75 cents on the dollar as of 11:35 a.m. in New York, the lowest since September 1998, as crude extended a bear market decline. The upfront cost of contracts to insure Venezuelan debt against non-payment for five years is at 59 percent, bringing the implied probability of default to 93 percent, the highest in the world.
So what does all of this mean for the future?
Are we experiencing a repeat of 2008?
Could what is ahead be even worse than that?
Or could this just be a temporary setback?
Recently, Howard Hill shared a few things that he looks for to determine whether a major financial crisis is upon us or not…
The first condition is a serious market sector correction.
According to some participants in the market for energy company bonds and loans, such a correction is already underway and heading toward a meltdown (the second condition). Others are more sanguine, and expect a recovery soon.
That smaller energy companies have issued more junk-rated debt than their relative size in the economy isn’t under debate. Of a total junk bond market estimated around $1.2 trillion, about 18% ($216 billion, according to a Bloomberg estimate) has been issued by energy-related companies. Yet those companies represent a far smaller share of the economy or stock market capitalization among the universe of junk-rated companies.
If the beaten-down prices for junk energy bonds don’t stabilize or recover a bit, we might see the second condition: a spiral of distressed sales of bonds and loans. This could happen if junk bond mutual funds or other large holders sell into an unfriendly market at low prices, and then other holders of those bonds succumb to the pressure of fund redemptions or margin calls and sell at even lower prices.
The third condition, which we can’t determine directly, would be pressure on Credit Default Swap dealers or hedge funds to make deposits as the prices of the CDS move against them. AIG was taken down when collateral demands were made to support existing CDS agreements, and nobody knew it until they were going under. There simply isn’t a way to know whether banks or dealers are struggling until the effect is already metastasizing.
I think that he makes some really good points.
In particular, I think that watching how junk bonds perform over the next few weeks will be extremely telling.
Last week was truly a bloodbath for high yield debt.
But perhaps things will stabilize this week.
Let’s hope so, because this is the closest that we have been to another major financial crisis since 2008.
One Foot On A Banana Peel.........The Other In A Grave, by Bill Holter www.globalresearch.ca/gold-financial-markets-and-the-international-monetary-system-one-foot-on-a-banana-peel-the-other-in-a-grave/5419975
Never before have I seen so many pieces of information to be put together in the span of just one week. This past week we were bombarded with connectable dot after connectable dot, nearly each and every one of them on their own would have caused a panic 30 years ago. I say "30 years ago" because this was before the 1987 crash, this was before anything and everything, nailed down or not ...was levered many times over in what eventually became an inflation orgy. 30 years ago, black was not white, wrong was not right and "debt" was still in its infancy of being money. Fast forward to present day and we now have a monetary system with one foot on a banana peel and the other in a grave!
Let me list what I saw this past week as some very ugly dots to be connected, by no means is this list complete but I think you'll get the point by the time you are done reading. Early in the week, China announced changes to their collateral rules for the credit quality necessary for corporate bonds to be accepted as collateral (now only AAA and AA bonds can now be used). This caused a 5.6% drop the following day in their stock market which did ripple around the world to other stock markets. This is significant because without a doubt it was an act of tightening credit and will directly decrease the liquidity available for the Chinese exchange. This is not a one day event as CNBC would lead you to believe.
Next, oil has outright crashed in price and finished the week under the recently unthinkable number of $60... and the repercussions have just started to be felt. The 130 year old firm Phibro announced they will be closing up shop while oil exporting currencies (including the ruble) were destroyed. There had been discussion over the last several weeks regarding the future of the shale industry, this discussion is now ended in that no one can say "this will blow over" any longer. $100's of billions of extended credit is now impaired and this credit market has crashed to yields now over 10%. The crash in oil all by itself is enough to ruin the financial system but by no means was alone this past week.
The next dot to connect was the spending package passed by Congress. As Zerohedge reported Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For , the U.S. public was sold down the river. Just a month after the Republicans won both houses of Congress, they have now allowed the banks to stuff their derivatives portfolios under the FDIC umbrella. Over $300 trillion worth! Prior to this, the FDIC insured over $6 trillion worth of bank deposits with a whopping $54 billion reserve... How could any "true American" have voted for this? Even a calculator with no batteries can understand this will unequivocally bankrupt the country, yet this law is passed little over one month after an election by the American public put trust in the Republicans as their "last hope"? Was this passed by mistake or do you think they knew what they were doing? Was Obamacare passed by mistake? Comically, the architect of Obamacare testified to Congress after calling the American public stupid ...a traitor testifying to traitors, they should all be strung up for TREASON! Whether you know it or not, Congress just called the American public stupid also by passing this traitorous law.
I asked in the above paragraph if you thought they "knew what they were doing"? The Treasury Dept. this past week put out to a bid request to supply "survival packs" for their 3,800 bank examiners. For what possible reason could bank examiners need a survival "fanny pack"? Does the Treasury know something they are not telling us? freebeacon.com/issues/treasury-department-seeking-survival-kits-for-bank-employees/ I would also like to ask why the Chicago Fed is "bricking up" their ground floor windows? Are they expecting something? Rioting maybe?
If all of the above wasn't enough for you, don't worry, there is more ...and even bigger news! Early in the week, Russia announced they are moving up the testing for their newly proposed currency clearing system. It had been planned for a May, 2015 testing phase followed by going live, this is now moved up to Dec. 15th, yes, this Monday! Why? Why are they moving up the start date? Presumably they also know something or see the immediate need to be able to clear funds for trade outside of SWIFT. If you think this one through, Russia will have the ability to facilitate ANY trade between ANY two or more parties while excluding the use of dollars ...and the prying eyes of America! This will mean whatever sanctions on Russia will be lessened, it also means SWIFT is no longer the only game in town. Maybe the BRICS et al will no longer care, or need to use SWIFT? No, not "maybe", definitely.
So far I haven't even mentioned gold but don't worry, we got two huge pieces of news. In case you had not noticed, gold/silver were the best performing asset class for a truly dismal financial week. First, Austria is now considering repatriating all of her gold. I mentioned last Monday in "The Mother of all Bank Runs" that Austria could be next in line, and if so, the stage would then be set for a "northern euro" leaving the southern basket cases to fend for themselves. I plan to write about this tomorrow so I will leave this for a separate piece. While the ramifications are very wide, the "intent" seems to be very narrow, I will explain this tomorrow.
The other big gold news and one that can be categorized in the "do you think they know something" category came from CME/COMEX. They will begin with "collars" for nine different metals, including silver and gold. The collars will begin to kick in and trading will cease if gold moves $100 or silver $3 with ultimate daily collars of $400 and $12. I won't bore you with the specifics, more importantly you must wonder "why?" and "why now?". How often have we seen $100 moves in gold, much less $400? I believe it has been only one time that gold moved over $100 in a day. We have seen $3 moves (almost all down) in silver but these were almost exclusively during evening trade sessions and almost always on Sunday nights. Does CME really see $12 moves in silver coming? Again, "are they expecting something?" we don't know about ...or maybe they are afraid silver could go to zero in less than two days trading and don't want to see that happen (I believe if it was possible, this would have already been facilitated)? Or, more likely, are they expecting huge volatility and upside moves they would like to retard and slow down? Add this one to the category "they know something and are readying for it"!
So there you have it, we had a disastrous week for financial assets and huge news, most of which points to sides being chosen and "official readying" for upcoming events. I might add that a 6th Hindenburg omen was spotted on Thursday which most probably bodes very poorly for the stock market(s). With all of these events lining up, one might think the U.S. public is in a somber mood. But no, consumer sentiment numbers reported Friday saw a huge upswing ...either the public is not very bright or the reported numbers are bogus ...or both?
Let me finish by saying this, the market action is clearly showing we have entered a credit contraction. Any credit contraction is a death sentence to a system which is overleveraged and already standing on a banana peel. The markets are trying to say this at the same time "official" moves are portraying something very big is afoot. Central banks are now collectively "running the bank". If one had no prior knowledge of anything financial prior to this week, what was learned this week alone is enough to know something is very wrong, something very bad is going to happen and it is going to happen very soon. I would suggest if your plans are not already finalized, do not wait until the new year to do so!
AND NOW THIS FROM www.shtfplan.com www.shtfplan.com/headline-news/bloodbath-is-this-the-start-of-the-next-major-financial-crisis_12152014
We Just Witnessed The Worst Week For Global Financial Markets In 3 Years
By Michael Snyder
Is this the start of the next major financial crisis? The nightmarish collapse of the price of oil is creating panic in financial markets all over the planet. On June 16th, U.S. oil was trading at a price of $107.52. Since then, it has fallen by almost 50 dollars in less than 6 months. This has only happened one other time in our history. In the summer of 2008, the price of oil utterly collapsed and we all remember what happened after that. Well, the same patterns that we witnessed back in 2008 are happening again. As the price of oil crashed in 2008, so did prices for a whole host of other commodities. That is happening again. Once commodities started crashing, the market for junk bonds started to implode. That is also happening again. Finally, toward the end of 2008, we witnessed a horrifying stock market crash. Could we be on the verge of another major one? Last week was the worst week for the Dow in more than three years, and stock markets all over the world are crashing right now. Bad financial news continues to roll in from the four corners of the globe on an almost hourly basis. Have we finally reached the “tipping point” that so many have been warning about?
What we witnessed last week is being described as “a bloodbath” that was truly global in scope. The following is how Zero Hedge summarized the carnage…
WTI’s 2nd worst week in over 3 years (down 10 of last 11 weeks)
Dow’s worst worst week in 3 years
Financials worst week in 2 months
Materials worst week since Sept 2011
VIX’s Biggest week since Sept 2011
Gold’s best week in 6 months
Silver’s last 2 weeks are best in 6 months
HY Credit’s worst 2 weeks since May 2012
IG Credit’s worst week in 2 months
10Y Yield’s best week since June 2012
US Oil Rig Count worst week in 2 years
The USDollar’s worst week since July 2013
USDJPY’s worst week since June 2013
Portugal Bonds worst week since July 2011
Greek stocks worst week since 1987
The stock market meltdown in Greece is particularly noteworthy. After peaking in March, the Greek stock market is down 40 percent since then. That includes a 20 percent implosion in just the past three trading days.
And it isn’t just Greece. Financial markets all over Europe are in turmoil right now. In addition to crashing oil prices, there is also renewed concern about the fundamental stability of the eurozone. Many believe that it is inevitable that it is headed for a break up. As a result of all of this fear, European stocks also had their worst week in over three years…
European stock markets closed sharply lower on Friday, posting their biggest weekly loss since August 2011, as commodity prices continued to fall and and shares in oil-related firms came under renewed pressure from the weak price for crude.
The pan-European FTSEurofirst 300 unofficially ended 2.6 percent lower, down 5.9 percent on the week as the energy sector once again weighed heavily on wider benchmarks, falling over 3 percent.
But despite all of the carnage that we witnessed in the U.S. and in Europe last week, things are actually far worse for financial markets in the Middle East.
Just check out what happened on the other side of the planet on Sunday…
Stock markets in the Persian Gulf got drilled Sunday as worries about further price declines grew. The Dubai stock index fell 7.6% Sunday, the equivalent of a 1,313-point plunge in the Dow Jones industrial average. The Saudi Arabian market fell 3.3%.
Overall, Dubai stocks are down a whopping 23 percent over the last two weeks, and full-blown stock market crashes are happening in Qatar and Kuwait too.
Like I said, this is turning out to be a truly global financial panic.
Another region to keep an eye on is South America. Argentina is a financial basket case, the Brazilian stock market is tanking big time, and the implied probability of default on Venezuelan debt is now up to 93 percent…
Swaps traders are almost certain that Venezuela will default as the rout in oil prices pressures government finances and sends bond prices to a 16-year low.
Benchmark notes due 2027 dropped to 43.75 cents on the dollar as of 11:35 a.m. in New York, the lowest since September 1998, as crude extended a bear market decline. The upfront cost of contracts to insure Venezuelan debt against non-payment for five years is at 59 percent, bringing the implied probability of default to 93 percent, the highest in the world.
So what does all of this mean for the future?
Are we experiencing a repeat of 2008?
Could what is ahead be even worse than that?
Or could this just be a temporary setback?
Recently, Howard Hill shared a few things that he looks for to determine whether a major financial crisis is upon us or not…
The first condition is a serious market sector correction.
According to some participants in the market for energy company bonds and loans, such a correction is already underway and heading toward a meltdown (the second condition). Others are more sanguine, and expect a recovery soon.
That smaller energy companies have issued more junk-rated debt than their relative size in the economy isn’t under debate. Of a total junk bond market estimated around $1.2 trillion, about 18% ($216 billion, according to a Bloomberg estimate) has been issued by energy-related companies. Yet those companies represent a far smaller share of the economy or stock market capitalization among the universe of junk-rated companies.
If the beaten-down prices for junk energy bonds don’t stabilize or recover a bit, we might see the second condition: a spiral of distressed sales of bonds and loans. This could happen if junk bond mutual funds or other large holders sell into an unfriendly market at low prices, and then other holders of those bonds succumb to the pressure of fund redemptions or margin calls and sell at even lower prices.
The third condition, which we can’t determine directly, would be pressure on Credit Default Swap dealers or hedge funds to make deposits as the prices of the CDS move against them. AIG was taken down when collateral demands were made to support existing CDS agreements, and nobody knew it until they were going under. There simply isn’t a way to know whether banks or dealers are struggling until the effect is already metastasizing.
I think that he makes some really good points.
In particular, I think that watching how junk bonds perform over the next few weeks will be extremely telling.
Last week was truly a bloodbath for high yield debt.
But perhaps things will stabilize this week.
Let’s hope so, because this is the closest that we have been to another major financial crisis since 2008.
