US Equity Futures Are Crashing

Per Zero Hedge:

Moments ago, without any specific catalyst, US equity futures just plunged when in thin, illiquid tape, a seller took out about 30 consecutive bid levels and as of last check, the ES was down as much as -48 to just 1923, or 2.5%, after being down a modest -13 minutes ago.

It is unclear just what is going on, or whether some prop desk or hedge fund just got tapped out, and/or how the Fed will react but the last time we had action like this, the Fed confused a liquidating SocGen trader for an economic collapse, and cut rates by 75 bps in January of 2008. This time it does not have that luxury.

So while we await the Fed’s response we watch in stunned amazement at a meltdown the likes of which we have not seen in years. Alternatively, if the Fed has nothing up its sleeve, the good news is that limit down for ES is just about 1870, so only 60 points more.

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Update: just when it seemed that a BTFDer had emerged, even more focused selling took ES to new lows, and as of moments ago ES was down as low as 1913, down a whopping 58 points, and officially in 10% correction territory. Also, we are now down to about 50 points from limit down.

 FYI from A Sheep No MoreA future is an option to buy something at a set price at a later time. Usually the strike price is higher than the current price. The buyer of the future bets the price will be higher than that price so that they can make a profit, while the seller bets it will be lower and gets to make money on the cost of the option contract.

The index in question, ESU5, is composed of S&P 500 futures. The drop means people are devaluing the S&P 500 in the future. That means the present value is also lower. If this move holds until morning, expect a big drop in stocks when the market opens.

This week will be entertaining.

Are Stock Markets Setting Up For A New ‘Black Monday’?

Depends on how long ‘the powers that shouldn’t be’ want to keep this Ponzi floating. If they’re not ready for a crash, they’ll do something to stop it. If they’re ready for a crash, this will be it. If they’ve lost control of it, hold on to your hats. It’s going to be a memorable ride.

“Black Monday” – Shanghai Composite Goes Red For The Year, Wiping Out 60% In Gains, 2000 Stocks Limit Down

Stock markets in Saudi Arabia, Dubai, Abu Dhabi, and Qatar crashed

Bloomberg’s Commodity Index Just Hit A 21st Century Low

“The bubbles are pretty much everywhere,” says investment guru and radio host Peter Schiff, CEO of Euro Pacific Capital. “They are in the stock market, they are in the bond market, they are in the real estate market, they are in the U.S. dollar.”

Schiff sat down with Reason’s Matt Welch while at FreedomFest 2015 to discuss the dollar, his support of Rand Paul, and his argument that we are already living in another stock bubble.

“The mainstream—the investors, the government, central banks—they never see a crisis until after the fact. And then they go back and they say, ‘Well nobody could have possibly predicted this. This was a complete random occurrence that had nothing to do with our policy,'” says Schiff. “They never understood the cause of the bubble that burst in ’08. They didn’t understand the Fed’s role in creating it, so they don’t understand that the Fed is simply exacerbating all the problems that everybody believes they solved.”

SCHIFF INTERVIEW PUBLISHED ON JULY 20, 2015 HERE:

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We provided you with a lot of information here. We hope this ride works out for your best interest.

  • infiniti spiral

    I’ll say first, the whole “wall street, futures, stocks” thing is completely alien to me. I’ve come to grips with the fact that I’ll problably never understand it. I really don’t think I’d care to. I will say though, apparently, it controls our modern way of life and in ways, the future of entire nations. So, it’s a big deal. My advice is to not lean so much on this cushy, everything’s at my fingertips way of life we’ve all grown (to our detriment) accustomed to, and instead learn some practical, depression-era skills. Gardening isn’t hard, it just requires work at first (oh no! not WORK!) and hunting/fishing is both relaxing and (sometimes) rewarding. You don’t have to dive head first into the “it’s all coming apart at the seams” end of the pool to get some basic life-sustaining skills hammered down. Although it just might, and I’d sure hate to be depending on someone else, big brother or otherwise, to take the reins over my well being