Friday, March 8, 2013
WARNING: WORLD ECONOMY IN DANGER AND MARKET WILL END BADLY THIS YEAR
CHART OF THE DAY: Investors Are Getting Really Pessimistic
Despite the rally.
Meanwhile, the Dow Jones Industrial Average continued its bullish march to an all-time high.
This week, AAII bullish sentiment ticked up to just 31.1. This is well below the historical average of 39 percent.
“The Dow’s new record high gave some AAII members reason to believe the current rally will continue,” wrote Charles Rotblutt in a post on Pragmatic Capitalism. “It also heightened concerns other AAII members have about the markets being overbought and due for a pullback in prices.”
Dow Record ‘Eerily Similar’ to 2007: SocGen
The Dow’s record high feels “eerily similar” to the market’s peak in mid-2007 before the global financial crisis, Albert Edwards, the London-based global strategist at Societe Generale, known for his famously bearish stance on equities, said on Thursday.“Exactly the same jitters abound of a bond bear market and true to form (Federal Reserve Chairman) Ben Bernanke is making the same complacent comments,”, Edwards wrote in a note to clients on Thursday.
Banking Blues: Job Cuts Rise in February
Worst three-year span for wage earners since ’93-95
U.S. productivity slips less than originally believed, but news on wage-growth front is bleak.
Fourth-Quarter Productivity Weakest in Four Years
Banking Job Cuts Rise for Second Month in Row
Marc Faber: Market Will End Badly This Year
The stock market’s run will result in either a 20 percent correction or a more nasty sell off at some point this year, Marc Faber, publisher of the Gloom Boom and Doom report, told CNBC’s ”Closing Bell” on Thursday.Faber pointed out that it’s been almost exactly four years since the stock market bottomed out. “We’re up very substantially, I think investors who today rush into stocks should be reminded of that,” he said.
Buy-Or-Sell – The Only Chart You Need
…Each time more than 45% of stocks have reached these valuation levels in the past 13 years, the market has decided enough is enough and shaken loose. But as we keep being told, it is different this time.
Chart: Morgan Stanley
RICH BERNSTEIN: This Looks Like The Raging Bull Market Of The 1980s!
Dow Hits An All-Time High! Translation: A Bubble Is Always Biggest Right Before It Bursts
Reckless money printing by Federal Reserve Chairman Ben Bernanke has pumped up the Dow to a brand new all-time high. So what comes next? Will the Dow go even higher? Hopefully it will. In fact, it would be great if the Dow was able to hit 15,000 before it finally came crashing down. That would give all of us some more time to prepare for the nightmarish economic crisis that is rapidly approaching. As you will see below, the U.S. economy is in far, far worse shape than it was the last time the Dow reached a record high back in 2007. In addition, all of the long-term trends that are ripping our economy to shreds just continue to get even worse and our debt just continues to explode. Unfortunately, the Dow has become completely divorced from economic reality in recent years because of Fed manipulation. All of this funny money that the Federal Reserve has been cranking out has made the wealthy even wealthier, but this bubble will not last for too much longer. What goes up must come down. And remember, a bubble is always biggest right before it bursts.Top Bankers: Too Much Central Bank Easing Is Becoming Dangerous
And the Stock Rally Is Due to Money-PrintingEveryone knows that “too big to fail” banks are bad for the economy. Indeed, even top bankers themselves say the big banks need to be broken up.
Now, the heads of many of the world’s biggest banks are saying that the amount of liquidity which the central banks are flooding into the economy is becoming dangerous.
Agence France-Presse reports:
An influential group of leading world banks warned Thursday that central banks are pumping out too much easy money and markets risk becoming dangerously addicted to ultra-low interest rates.….
The Institute of International Finance, which groups 450 banks, said that if central banks continue to flood money into the global economy, then any future bid to get it under control could itself destabilize the financial system.
***
“These conditions — quantitative easing, very low interest rates — cannot last forever, but the risk is that financial markets have become addicted to them,” it warned.
“The longer central bank liquidity is relied on to hold things together, the more excesses and distortions are being accumulated in the financial system. An eventual unwinding of these excesses will become a destabilizing risk event.”
MARKET CRASH & DEBT BUBBLE BURST IMMINENT – Greg Mannarino & Jason Burack – PT 2
Eric Holder And Senator Grassley On Too Big To Jail
Longer clip from yesterday's hearing.
[Note: Transcript, details and discussion of this clip are here.]
Senator Chuck Grassley asks Eric Holder the names of outside consultants DOJ uses to decide whether to prosecute Wall Street banks. Matt Taibbi wrote about the issue on Monday at Rolling Stone.
Background:
- Senators Bash DOJ for Evasive Response on Too Big To Jail - Frontline Update
- Taibbi: DOJ Pays For Advice Not To Prosecute Wall Street - Rolling Stone
Banks Pass Fed’s Tests; Critics Say It Was Easy
Carolyn Kaster/Associated PressBen Bernanke, chairman of the Federal Reserve, at a House panel last month.
Four years after the financial crisis, federal regulators said that many of the nation’s largest banks were better prepared to sustain future market shocks, paving the way for the healthiest institutions to increase their dividends and buy back shares.
The results of so-called stress tests, released on Thursday by the Federal Reserve, indicate that most large banks would survive a severe recession and a crash in the markets. The tests, which measured a bank’s capital levels during adverse conditions, help validate the government’s efforts to shore up the financial systems.
But some analysts contend that the Fed was still too lenient with the banks. The stress tests, they argue, underestimate potential losses and the effects of several major financial firms collapsing, which can paralyze the entire system.
“The stress tests were just not very stressful,” said Rebel A. Cole, a professor of finance at DePaul University.
With the industry’s health improving, analysts predict that most big banks will now secure the Fed’s blessing to return money to shareholders, including some unexpected candidates. Citigroup, for example, outperformed its rivals in the test just one year after a poor performance embarrassed the bank and thwarted its plans to distribute capital to shareholders.
This year, Citigroup did not wait long to celebrate. Minutes after the results were released, the bank announced that it asked the Fed’s permission to carry out $1.2 billion in stock buybacks through the first quarter of 2014.
Other banks did not fare as well. Ally Financial, which is majority-owned by the taxpayers since the crisis, burned through nearly all its buffer under the test, which assessed how much capital would remain at the end of 2014 once banks were subjected to hefty losses.
Morgan Stanley and JPMorgan Chase also produced some of the lowest capital results among large Wall Street firms. Goldman Sachs would suffer $25 billion in trading losses under the test. The results were not unexpected; all three firms have significant trading operations that can rack up big losses in turbulent times.
The test results provided an important snapshot of the financial system more than four years after the banking industry was on the brink of collapse. Regulators hailed the industrywide improvements, underscoring what they portend for consumers and the economy.
Investors will pore over the results, scanning for hints about how much money banks can return to shareholders. After the crisis, regulators prevented lenders like Citigroup and Bank of America from increasing their dividends or repurchasing shares, forcing them instead to hoard capital to absorb losses.
Behind the scenes, the Fed will now signal to each bank whether it can proceed with new payout plans, potentially creating a tense face-off with regulators. If the Fed objects, a bank will have an opportunity to temper its proposals for dividend payments and share buybacks before the plans are released publicly next Thursday.
The stress tests have already caused tension between regulators and banks. The results, which reveal in some detail the losses that banks will suffer under times of stress, prompted wrangling with the Fed over how to conduct the tests and how much data to release.
In another sign of friction, the banks had to run the same test as the Fed — and in some cases produced rosier results. Wells Fargo reported a projected 9.2 percent Tier 1 common ratio, the primary measure of financial strength tracked by regulators, by the end of 2014. That was far higher than the 7 percent calculated by the Fed.
Bank of America’s outlook also trumped regulators’ findings, while Citigroup’s forecast hewed closely to the Fed. Those sorts of discrepancies may feed suspicions that financial firms are overly optimistic about their businesses.
In its overhaul of the regulatory system after the crisis, Congress mandated stress tests to provide an annual health check for the same banks that brought the economy to its knees. The Fed’s tests take banks through a series of adverse conditions, not unlike the last crisis. The tests estimated that 18 banks sustain combined losses of $462 billion, in a period of considerable financial and economic stress in which unemployment soars, stock prices halve and house prices plummet more than 20 percent.
But, to some banking analysts, the tests did not fully capture some forces and events that occur during economic and market shocks. For instance, Wall Street firms may lose access to short-term loans critical to their survival. It is almost impossible to project the impact of the rapid collapse of one or two large financial firms, as in 2008, when Lehman Brothers and American International Group imploded.
Mr. Cole of DePaul said the projected losses on loans appeared too low for the severity of the imagined cases. “If we really had an economic crisis of this magnitude, the loss rates would be at least double on the real estate loans,” he said.
The numbers also show that, over the last year, the Fed has cut its loss projections for certain types of loans. Last year, it projected a 9.5 percent loss rate on Wells Fargo’s mortgages, but this year that dropped to 7.1 percent. The Fed declined to comment on specific banks, but a senior official said lower loss rates were the result of an improvement in the overall quality of the banks’ loan portfolios.
Still, some analysts cheered the results, saying they confirmed the increasing optimism among investors. Bank stocks have risen sharply in recent months, gains that could continue on the heels of the stress tests.
“It’s a very good exercise to do, showing everyone that the U.S. banking system is well capitalized,” said Gerard Cassidy, a banking analyst at RBC Capital Markets.
In a surprise, Citigroup had a projected capital equivalent to 8.9 percent of its assets at the end of 2014, well above last year’s showing. Bank of America’s so-called Tier 1 common capital ratio registered at 6.9 percent, also an improvement.
But Morgan Stanley’s ratio came in at 6.4 percent, temporarily restrained by its purchase of the remaining stake in the Smith Barney retail brokerage joint venture. JPMorgan’s capital levels stood at 6.8 percent. While those banks’ stress test results are lower than rivals, they are still strong capital numbers amid a crisis.
On one important alternative measure of capital, Goldman Sachs had a poor showing compared with its peers. Under the stressed case, the bank’s Tier 1 leverage ratio — another measure of capital strength that treats assets more conservatively — would fall to a low of 3.9 percent.
This could become an issue in any discussions between Goldman and the Fed about the bank’s capital plan. When regulators assess whether a bank can proceed with its capital plan, the Tier 1 leverage ratio cannot fall below 3 percent. Goldman’s own test showed the ratio falling to only 5.1 percent.
Rick Santelli On Gold ETFs: 'If World Collapses, You're Stuck With Paper'
CNBC's Rick Santelli talks with Frank Lesh, FuturePath Trading, about
how ETFs have changed the way investors trade gold. Feb. 27, 2013.
Santelli on owning 'paper gold.'
Solid clip. Santelli discusses trading gold back in the late 1970s.
---
This isn't good news:
World's Biggest Gold Storage Company Bans All Accounts From U.S. Citizens...
Explanation:
'How Central Banks Lease Out Their Gold'...
'Charles Ponzi audits the Fed's gold' by William Banzai7.
Ponzi can surely attest
The gold in the vault is the best
But then he checked leases
For 10 times the pieces
And said: "Now I'm really impressed!!!"
The Limerick King
Santelli on owning 'paper gold.'
Solid clip. Santelli discusses trading gold back in the late 1970s.
---
This isn't good news:
World's Biggest Gold Storage Company Bans All Accounts From U.S. Citizens...
Explanation:
'How Central Banks Lease Out Their Gold'...
'Charles Ponzi audits the Fed's gold' by William Banzai7.
Ponzi can surely attest
The gold in the vault is the best
But then he checked leases
For 10 times the pieces
And said: "Now I'm really impressed!!!"
The Limerick King
Should You Move To Another Country To Escape The Collapse Of America? 10 Questions To Ask Yourself First
By Michael
Why are so many people leaving the United States right now? Over the past couple of years, an increasing number of Americans have decided that moving to another country is the best way to prepare for the collapse of America. According to the U.S. State Department, an all-time record of more than 6 million Americans are now working or studying overseas. Of course many of those that have left the country do not believe that the U.S. economy is going to collapse, but without a doubt there are an increasing number of preppers that believe that now is the time to “escape from America” while they still can. And certainly there are a lot of reasons why the U.S. is becoming less appealing with each passing day. In addition to our economic problems, crime is on the rise in our cities, our liberties and freedoms are being eroded at a frightening pace, political correctness is wildly out of control, and our corrupt politicians continue to make things even worse. But is life really that much better in the rest of the world? The sad truth is that life in most other nations is more difficult than it is in the United States. Yes, there are some nations that are relatively stable and that look promising at first glance, but the truth is that moving to another country is never easy. If you plan to do it, there are some hard questions that you need to ask yourself first.
If you plan to move permanently to another nation, it would be wise to visit first. The way that things work in a foreign country is often very, very different from how things work in the United States. If you are not accustomed to being in a foreign culture, it can feel like your whole world is being turned upside down.
But of course it is definitely possible to make a successful transition to another culture. Millions of Americans have done it. The following is from a recent RT article…
The following are 10 questions to ask yourself before you decide to move to another country…
Do You Speak The Language? If Not, How Will You Function?
If you do not speak the language of the country that you are moving to, that can create a huge problem. Just going to the store and buying some food will become a challenge. Every interaction that you have with anyone in that society will be strained, and your ability to integrate into the culture around you will be greatly limited.
How Will You Make A Living?
Unless you are independently wealthy, you will need to make money. In a foreign nation, it may be very difficult for you to find a job – especially one that pays as much as you are accustomed to making in the United States.
Will You Be Okay Without Your Family And Friends?
Being thousands of miles away from all of your family and friends can be extremely difficult. Will you be okay without them? And it can be difficult to survive in a foreign culture without any kind of a support system. Sometimes the people that most successfully move out of the country are those that do it as part of a larger group.
Have You Factored In Weather Patterns And Geological Instability?
As the globe becomes increasingly unstable, weather patterns and natural disasters are going to become a bigger factor in deciding where to live. For example, right now India is suffering through the worst drought that it has experienced in nearly 50 years. It would be very difficult to thrive in the middle of such an environment.
Many of those that are encouraging people to “escape from America” are pointing to Chile as an ideal place to relocate to. But there are thousands of significant earthquakes in Chile each year, and the entire nation lies directly along the “Ring of Fire” which is becoming increasingly unstable. That is something to keep in mind.
What Will You Do For Medical Care?
If you or someone in your family had a serious medical problem in the United States, you would know what to do. Yes, our health care system is incredibly messed up, but at least you would know that you could get the care that you needed if an emergency arose. Would the same be true in a foreign nation?
Are You Moving Into A High Crime Area?
Yes, crime is definitely on the rise in the United States. But in other areas where many preppers are moving to, crime is even worse. Mexico and certain areas of Central America are two examples of this. And in many foreign nations, the police are far more corrupt than they generally are in the United States.
In addition, many other nations have far stricter gun laws than the United States does, so your ability to defend your family may be greatly restricted.
So will your family truly be safe in the nation that you plan to take them to?
Are You Prepared For “Culture Shock”?
Moving to another country can be like moving to a different planet. After all, they don’t call it “culture shock” for nothing.
If you do move to another country, you may quickly find that thousands of little things that you once took for granted in the U.S. are now very different.
And there is a very good chance that many of the “amenities” that you are accustomed to in the U.S. will not be available in a foreign nation and that your standard of living will go down.
So if you are thinking of moving somewhere else, you may want to visit first just to get an idea of what life would be like if you made the move.
What Freedoms and Liberties Will You Lose By Moving?
Yes, our liberties and our freedoms are being rapidly eroded in the United States. But in many other nations around the world things are much worse. You may find that there is no such thing as “freedom of speech” or “freedom of religion” in the country that you have decided to move to.
Is There A Possibility That The Country You Plan To Escape To Could Be Involved In A War At Some Point?
We are moving into a time of great geopolitical instability. If you move right into the middle of a future war zone, you might really regret it. If you do plan to move, try to find a country that is likely to avoid war for the foreseeable future.
When The Global Economy Collapses, Will You And Your Family Be Okay For Food?
What good will it be to leave the United States if you and your family run out of food?
Today, we are on the verge of a major global food crisis. Global food reserves are at their lowest level in nearly 40 years, and shifting global weather patterns are certainly not helping things.
And the global elite are rapidly getting more control over the global food supply. Today, between 75 and 90 percent of all international trade in grain is controlled by just four gigantic multinational food corporations.
But grain is not the only thing that the food giants control. Just check out the following statistics from a recent Natural News article…
The people that run the world are rapidly getting a stranglehold over the global food supply.
So wherever you end up – whether it is in the United States or in another country – you will need to make sure that you can provide enough food for you and your family to live on independently of the system.
These are all things to think about when considering whether or not to move out of the United States.
But there are many, including some of those that regularly read my website, that have made the transition successfully.
If you have some advice that you would like to share with those that are considering moving away from America, please feel free to share it below…
Why are so many people leaving the United States right now? Over the past couple of years, an increasing number of Americans have decided that moving to another country is the best way to prepare for the collapse of America. According to the U.S. State Department, an all-time record of more than 6 million Americans are now working or studying overseas. Of course many of those that have left the country do not believe that the U.S. economy is going to collapse, but without a doubt there are an increasing number of preppers that believe that now is the time to “escape from America” while they still can. And certainly there are a lot of reasons why the U.S. is becoming less appealing with each passing day. In addition to our economic problems, crime is on the rise in our cities, our liberties and freedoms are being eroded at a frightening pace, political correctness is wildly out of control, and our corrupt politicians continue to make things even worse. But is life really that much better in the rest of the world? The sad truth is that life in most other nations is more difficult than it is in the United States. Yes, there are some nations that are relatively stable and that look promising at first glance, but the truth is that moving to another country is never easy. If you plan to do it, there are some hard questions that you need to ask yourself first.
If you plan to move permanently to another nation, it would be wise to visit first. The way that things work in a foreign country is often very, very different from how things work in the United States. If you are not accustomed to being in a foreign culture, it can feel like your whole world is being turned upside down.
But of course it is definitely possible to make a successful transition to another culture. Millions of Americans have done it. The following is from a recent RT article…
Ever dream of leaving it all behind and heading out of America? You’re not the only one. A new study shows that more US citizens than ever before are living outside of the country.But picking up and moving to a foreign nation is not something to be done lightly.
According to statistics from the US State Department, around 6.4 million Americans are either working or studying overseas, which Gallup says is the largest number ever for such statistic.
The polling organization came across the number after conducting surveys in 135 outside nations and the information behind the numbers reveal that this isn’t exactly a longtime coming either — numbers have skyrocketed only in recent years. In the 24 months before polling began, the number of Americans between the ages of 25 and 34 living abroad managed to surge from barely 1 percent to over 5.1 percent. For those under the age span wishing to move overseas, the percentage has jumped in the same amount of time from 15 percent to 40.
The following are 10 questions to ask yourself before you decide to move to another country…
Do You Speak The Language? If Not, How Will You Function?
If you do not speak the language of the country that you are moving to, that can create a huge problem. Just going to the store and buying some food will become a challenge. Every interaction that you have with anyone in that society will be strained, and your ability to integrate into the culture around you will be greatly limited.
How Will You Make A Living?
Unless you are independently wealthy, you will need to make money. In a foreign nation, it may be very difficult for you to find a job – especially one that pays as much as you are accustomed to making in the United States.
Will You Be Okay Without Your Family And Friends?
Being thousands of miles away from all of your family and friends can be extremely difficult. Will you be okay without them? And it can be difficult to survive in a foreign culture without any kind of a support system. Sometimes the people that most successfully move out of the country are those that do it as part of a larger group.
Have You Factored In Weather Patterns And Geological Instability?
As the globe becomes increasingly unstable, weather patterns and natural disasters are going to become a bigger factor in deciding where to live. For example, right now India is suffering through the worst drought that it has experienced in nearly 50 years. It would be very difficult to thrive in the middle of such an environment.
Many of those that are encouraging people to “escape from America” are pointing to Chile as an ideal place to relocate to. But there are thousands of significant earthquakes in Chile each year, and the entire nation lies directly along the “Ring of Fire” which is becoming increasingly unstable. That is something to keep in mind.
What Will You Do For Medical Care?
If you or someone in your family had a serious medical problem in the United States, you would know what to do. Yes, our health care system is incredibly messed up, but at least you would know that you could get the care that you needed if an emergency arose. Would the same be true in a foreign nation?
Are You Moving Into A High Crime Area?
Yes, crime is definitely on the rise in the United States. But in other areas where many preppers are moving to, crime is even worse. Mexico and certain areas of Central America are two examples of this. And in many foreign nations, the police are far more corrupt than they generally are in the United States.
In addition, many other nations have far stricter gun laws than the United States does, so your ability to defend your family may be greatly restricted.
So will your family truly be safe in the nation that you plan to take them to?
Are You Prepared For “Culture Shock”?
Moving to another country can be like moving to a different planet. After all, they don’t call it “culture shock” for nothing.
If you do move to another country, you may quickly find that thousands of little things that you once took for granted in the U.S. are now very different.
And there is a very good chance that many of the “amenities” that you are accustomed to in the U.S. will not be available in a foreign nation and that your standard of living will go down.
So if you are thinking of moving somewhere else, you may want to visit first just to get an idea of what life would be like if you made the move.
What Freedoms and Liberties Will You Lose By Moving?
Yes, our liberties and our freedoms are being rapidly eroded in the United States. But in many other nations around the world things are much worse. You may find that there is no such thing as “freedom of speech” or “freedom of religion” in the country that you have decided to move to.
Is There A Possibility That The Country You Plan To Escape To Could Be Involved In A War At Some Point?
We are moving into a time of great geopolitical instability. If you move right into the middle of a future war zone, you might really regret it. If you do plan to move, try to find a country that is likely to avoid war for the foreseeable future.
When The Global Economy Collapses, Will You And Your Family Be Okay For Food?
What good will it be to leave the United States if you and your family run out of food?
Today, we are on the verge of a major global food crisis. Global food reserves are at their lowest level in nearly 40 years, and shifting global weather patterns are certainly not helping things.
And the global elite are rapidly getting more control over the global food supply. Today, between 75 and 90 percent of all international trade in grain is controlled by just four gigantic multinational food corporations.
But grain is not the only thing that the food giants control. Just check out the following statistics from a recent Natural News article…
The paper said three mega-multinationals now control better than 40 percent of global coffee sales, for example. Eight companies control the supply of cocoa and chocolate. Seven control the lion’s share – 85 percent – of tea production. Five multinationals control three-quarters of the world banana trade. And the largest half-dozen sugar traders account for about 66 percent of world trade, the new report by theFairtrade Foundation said.The elite are also buying up food producing real estate all over the globe. That is why farmland prices in the United States have been absolutely skyrocketing lately.
The people that run the world are rapidly getting a stranglehold over the global food supply.
So wherever you end up – whether it is in the United States or in another country – you will need to make sure that you can provide enough food for you and your family to live on independently of the system.
These are all things to think about when considering whether or not to move out of the United States.
But there are many, including some of those that regularly read my website, that have made the transition successfully.
If you have some advice that you would like to share with those that are considering moving away from America, please feel free to share it below…
Subscribe to:
Posts (Atom)