Dow

VIA| There is an unsettling feeling creeping over the land…

And very obviously the fear of something big approaching is not confined to those on the fringes, because mainstream investors are now losing confidence on an almost unprecedented level.

Right now it is big news that the stock market just took one of its biggest tumbles in recent history, while oil prices plummeted back down to historical lows, touching below $40 per barrel. CNBC reports:

The Dow Jones industrial average fell more than 400 points as nearly all blue chips declined. In the last five years, the index has only had four instances with closing losses of more than 400 points.

[…]

Oil reversed Thursday’s late gains to briefly fall below $40 a barrel to $39.86 for the first time since March 2009.

[…]

“Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it’s interpreted indiscriminately,” said Tom Digenan, head of U.S. equities as UBS Global Asset Management.

[…]

“I think uncertainty about China (and) general negativity is weighing on the market. There’s a lack of positive economic news to motivate buyers,” said David Kelly, chief global strategist at JPMorgan Funds.

For a while now, numerous economists have been warning that the system is headed for a collapse, but that message has been tuned out of the mainstream feed.

But not anymore.

China’s economic troubles, now dragging down its manufacturing sector, carry a major risk of spilling over into western markets, and the Federal Reserve has all but admitted that it is has run out of ammo to artificially prop up the U.S. market. QE3 has failed, and the negative effects of a zero interest rate are reaching a tipping point. Meanwhile, the currency wars are heating up across the globe.

Are things headed over a cliff?

USA Today expounded upon the significance of the lowest oil price in more than 6 years, as overproduction is forcing oil and drilling businesses go belly up, in turn threatening to liquidate millions of jobs and undermine the market:

Oil prices dipped below $40 a barrel Friday for the first time in 6 ½ years on the prospect of falling global demand, busting through a key threshold that could signal further declines and market turmoil… some analysts say the drop below $40 likely portends an additional slide into the $30s and continued weakness in the short term.

[…]

Further pushing down prices was a government report that U.S. oil inventories unexpectedly rose last week.

[…]

“It’s a very important psychological level,“ says Phil Flynn, senior energy analyst with the Price Futures Group.  “It really signals that the global economy is in trouble.”

There is surely more to come in this unfortunate drama… but already, today’s numbers are showing that a very real fear has set in about how bad things have become, and how quickly it could all come unglued.

Batten down the hatches, and get ready, for it could get ugly.

Is something really big about to happen? For months, people have been pointing to the second half of this year for various reasons. For some, the major concern is Jade Helm and the unprecedented movement of military vehicles and equipment that we have been witnessing all over the nation. For others, the upcoming fourth blood moon and the end of the Shemitah cycle are extremely significant events. Yet others are most concerned about political developments in Washington D.C. and at the United Nations. 

To me, it does seem rather remarkable that we are seeing such a confluence of economic, political and spiritual events coming together during the second half of 2015. So is all of this leading up to something? Is our world about to change in a fundamental way? Only time will tell. 

The following are 7 key events that are going to happen by the end of September…

Late June/Early July – It is expected that this is when the U.S. Supreme Court will reveal their gay marriage decision. Most believe that the court will rule that gay marriage is a constitutional right in all 50 states. There are some that believe that this will be a major turning point for our nation. (UPDATE: Supreme Court rules in favor of same-sex marriage nationwide)

July 15th to September 15th – A “realistic military training exercise” known as “Jade Helm” will be conducted by the U.S. Army.  More than 1,000 members of the U.S. military will take part in this exercise.  The list of states slated to be involved in these drills includes Texas, Colorado, New Mexico, Arizona, Nevada, Utah, California, Mississippi and Florida.

July 28th – On May 28th, Reuters reported that countries in the European Union were being given a two month deadline to enact “bail-in” legislation.  Any nation that does not have “bail-in” legislation in place by that time will face legal action from the European Commission.  So why is the European Union in such a rush to get this done?  Are the top dogs in the EU anticipating that another great financial crisis is about to erupt?

September 13th – This is Elul 29 on the Biblical calendar – the last day of the Shemitah year. Many are concerned about this date because we have seen giant stock market crashes on the last day of the previous two Shemitah cycles.

On September 17th, 2001 (which was Elul 29 on the Biblical calendar), we witnessed the greatest one day stock market crash in U.S. history up until that time. The Dow plummeted 684 points, and it was a record that held for exactly seven years until the end of the next Shemitah cycle.

On September 29th, 2008 (which was also Elul 29 on the Biblical calendar), the Dow fell by an astounding 777 points, which still today remains the greatest one day stock market crash of all time.

Now we are approaching the end of another Shemitah year.  So will the stock market crash on September 13th, 2015? Well, no, because that day is a Sunday.  So I guarantee that the stock market will not crash on that particular day. But as Jonathan Cahn has pointed out in his book on the Shemitah, sometimes stock market crashes happen just before the end of the Shemitah year and sometimes they happen within just a few weeks after the end of the Shemitah.  So we are not just looking at one particular date.

September 15th – The 70th session of the UN General Assembly begins on this date.  It is being reported that France plans to introduce a resolution which would give formal UN Security Council recognition to a Palestinian state. Up until now, the United States has always been the one blocking such a resolution, but Barack Obama is indicating that things may be much different this time around.

September 25th to September 27th – The United Nations is going to launch a brand new sustainable development agenda for the entire planet. Some have called this “Agenda 21 on steroids”. But this new agenda is not just about the environment.  It also includes provisions regarding economics, agriculture, education and gender equality. On September 25th, the Pope will travel to New York to give a major speech kicking off the UN conference where this new agenda will be unveiled.

September 28th – This is the date for the last of the four blood moons that fall on Biblical festival dates during 2014 and 2015. This blood moon falls on the very first day of the Feast of Tabernacles, it will be a “supermoon”, and it will actually be visible in the city of Jerusalem. There are many that dismiss the blood moon phenomenon, but we have seen similar patterns before.  For example, a similar pattern of eclipses happened just before and just after the destruction of the Jewish temple by the Romans in 70 AD.

Perhaps none of this alarms you.  But when you add everything above to the fact that the elite definitely appear to be feverishly preparing for something, a very alarming picture emerges.

For example, due to fears that a “natural disaster” could interrupt their operations in New York, the New York Fed has been working hard to build up a satellite office in Chicago.

What kind of “natural disaster” could possibly be so bad that it would cause the entire New York Fed to shut down?

And NORAD has decided to move back into the base deep inside Cheyenne Mountain after all these years. The threat of an electromagnetic pulse was the reason given for this decision.

By themselves, perhaps those moves would not be that big of a deal. But let’s add all of the weird movements of military vehicles and equipment that we have been witnessing lately to this discussion.  I included this list from Intellihub in a previous article, but I believe that it bears repeating…

On March 13th, Intellihub founder Shepard Ambellas detailed photos and documentation of nearly 40 U.S. Army soldiers, wielding training rifles and dressed in full combat gear, participating in an urban warfare style training drill just outside the Texarkana Regional Airport perimeter.

In the middle of April, a report out of Big Springs, Texas revealed that a train full of military equipment and over a dozen helicopters had arrived in the town ahead of Jade Helm 2015.

Photographs taken in Corona, California a few days later added to the Jade Helm speculation after they showed a MRAP full of what looked to be U.S. Marines driving down the 1-15 freeway. “In broad daylight with not a care in the world”

On April 24th a shocking report on Intellihub News detailed armed troops seen confronting angry protesters in a “professional news package”of riot control training released by the military

“A massive buildup, a lot of movement and its undeniable at this point,”read the headline” on April 25th after a convoy was seen in Oroville, California that stretched as far as the eye could see.

Moving into May, photographs taken in Indiana showed a massive military convoy heading down the freeway. The photos, taken by a concerned citizen, show the convoy heading west on I-70 for reasons unknown.

Two days later, video footage, this time out of Texarkana, Arkansas, highlighted a convoy of Humvees driving down the highway as well as a trainload of military vehicles that was seen shortly after.

In mid May, Intellihub reporter Alex Thomas published a detailed report that confirmed that the military was indeed training to take on the American people, this time in the form of domestic house to house raids.

The next day a new report, also by Alex Thomas, proved that Marines were actually practicing for the internment of American citizens.

On May 18th, a train full of hundreds of military Humvees was spotted, further revealing the increased military buildup across the country leading into Jade Helm 2015. The train was heading towards Cleveland for unknown reasons although a possible connection to planned upcoming protests had been mentioned.

This past week a massive military war game simulation called Raider Focus was announced. The war game will include the largest military convoy seen on the roads of Colorado since World War II.

Finally, a report published detailed a stunning propaganda move by the military involving a New Jersey school and the worship of the military on the streets of America. “As parents, teachers, and students looked on with joy, Marines from the Special-Purpose Marine Air Ground Task Force landed helicopters on the baseball diamond of a New Jersey school.”

What does all of this mean?

It is hard to say. We have imperfect information, so it is difficult to come up with perfect conclusions.

But what I will say is that I believe that the second half of 2015 is going to be extremely significant. I believe that events are about to start accelerating greatly, and I believe that life in America is about to change dramatically.

Submitted by Michael Snyder via The End of The American Dream

This article was contributed by Michael Snyder with The Economic Collapse.

If you do not believe that we are heading directly toward another major financial crisis, you need to read this article. 

So many of the exact same patterns that preceded the great financial collapse of 2008 are happening again right before our very eyes.  History literally appears to be repeating, but most Americans seem absolutely oblivious to what is going on. 

The mainstream media and our politicians are promising them that everything is going to be okay somehow, and that seems to be good enough for most people.  But the signs that another massive financial crisis is on the horizon are everywhere.  All you have to do is open up your eyes and look at them.

Bill Gross, considered by many to be the number one authority on government bonds on the entire planet, made headlines all over the world on Tuesday when he released his January Investment Outlook.  I don’t know if we have ever seen Gross be more negative about a new year than he is about 2015.  For example, just consider this statement…

“When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over.”

And this is how he ended the letter…

And so that is why – at some future date – at some future Ides of March or May or November 2015, asset returns in many categories may turn negative. What to consider in such a strange new world? High-quality assets with stable cash flows. Those would include Treasury and high-quality corporate bonds, as well as equities of lightly levered corporations with attractive dividends and diversified revenues both operationally and geographically. With moments of liquidity having already been experienced in recent months, 2015 may see a continuing round of musical chairs as riskier asset categories become less and less desirable.

Debt supercycles in the process of reversal are not favorable events for future investment returns. Father Time in 2015 is not the babe with a top hat in our opening cartoon. He is the grumpy old codger looking forward to his almost inevitable “Ides” sometime during the next 12 months. Be cautious and content with low positive returns in 2015.The time for risk taking has passed.

So why are Gross and so many other financial experts being so “negative” right now?

It is because they can see what is happening.

They can see the same patterns that we saw in early 2008 unfolding again right in front of us.  I wanted to put these patterns in a single article so that they will be easy to share with people.  The following are 10 key events that preceded the last financial crisis that are happening again right now…

#1 A really bad start to the year for the stock market.  During the first three trading days of 2015, the S&P 500 was down a total of 2.73 percent.  There are only two times in history when it has declined by more than three percent during the first three trading days of a year.  Those years were 2000 and 2008, and in both years we witnessed enormous stock market declines.

#2 Very choppy financial market behavior.  This is something that I discussed yesterday.  In general, calm markets tend to go up.  When markets get choppy, they tend to go down.  For example, the chart that I have posted below shows how the Dow Jones Industrial Average behaved from the beginning of 2006 to the end of 2008.  As you can see, the Dow was very calm as it rose throughout 2006 and most of 2007, but it got very choppy as 2008 played out…

As I also mentioned yesterday, it is important not to get fooled if stocks soar on a particular day.  The three largest single day stock market gains in history were right in the middle of the financial crisis of 2008.  When you start to see big ups and big downs in the market, that is a sign of big trouble ahead.  That is why it is so alarming that global financial markets have begun to become quite choppy in recent weeks.

#3 A substantial decline for 10 year bond yields.  When investors get scared, there tends to be a “flight to safety” as investors move their money to safer investments.  We saw this happen in 2008, and that is happening again right now.

In fact, according to Bloomberg, global 10 year bond yields have already dropped to low levels that are absolutely unprecedented…

Taken together, the average 10-year bond yield of the U.S., Japan and Germany has dropped below 1 percent for the first time ever, according to Steven Englander, global head of G-10 foreign-exchange strategy at Citigroup Inc.

That’s not good news. The rock-bottom rates, which fall below zero when inflation is taken into account, show “that investors think we are going nowhere for a long time,” Englander wrote in a report yesterday.

#4 The price of oil crashes.  As I write this, the price of U.S. oil has dipped below $48 a barrel.  But back in June, it was sitting at $106 at one point.  As the chart below demonstrates, there is only one other time in history when the price of oil has declined by more than $50 in less than a year…

The only other time there has been an oil price collapse of this magnitude we experienced the greatest financial crisis since the Great Depression shortly thereafter.  Are we about to see history repeat?  For much more on this, please see my previous article entitled “Guess What Happened The Last Time The Price Of Oil Crashed Like This?”

#5 A dramatic drop in the number of oil and gas rigs in operation.  Right now, oil and gas rigs are going out of operation at a frightening pace.  During the fourth quarter of 2014, 93 oil and gas rigs were idled, and it is being projected that another 200 will shut down this quarter.  As this Business Insider article demonstrates, this is also something that happened during the financial crisis of 2008 and it continued well into 2009.

#6 The price of gasoline takes a huge tumble.  Millions of Americans are celebrating that the price of gasoline has plummeted in recent weeks.  But they were also celebrating when it happened back in 2008 as well.  But of course it turned out that there was really nothing to celebrate in 2008.  In short order, millions of Americans lost their jobs and their homes.  So the chart that I have posted below is definitely not “good news”…

#7 A broad range of industrial commodities begin to decline in price.  When industrial commodities go down in price, that is a sign that economic activity is slowing down.  And just like in 2008, that is what we are watching unfold on the global stage right now.  The following is an excerpt from a recent CNBC article…

From nickel to soybean oil, plywood to sugar, global commodity prices have been on a steady decline as the world’s economy has lost momentum.

For an extended discussion on this, please see my recent article entitled “Not Just Oil: Guess What Happened The Last Time Commodity Prices Crashed Like This?”

#8 A junk bond crash.  Just like in 2008, we are witnessing the beginnings of a junk bond collapse.  High yield debt related to the energy industry is on the bleeding edge of this crash, but in recent weeks we have seen investors start to bail out of a broad range of junk bonds.  Check out this chart and this chart in addition to the chart that I have posted below…

#9 Global inflation slows down significantly.  When economic activity slows down, so does inflation.  This is something that we witnessed in 2008, this is also something that is happening once again.  In fact, it is being projected that global inflation is about to fall to the lowest level that we have seen since World War II…

Increases in the prices of goods and services in the world’s largest economies are slowing dramatically. Analysts are predicting that inflation will fall below 2pc in all of the countries that make up the G7 group of advanced nations this year – the first time that has happened since before the Second World War.

Indeed, Japan was the only G7 country whose inflation rate was above 2pc last year. And economists believe that was because its government increased sales tax which had the effect of artificially boosting prices.

#10 A crisis in investor confidence.  Just prior to the last financial crisis, the confidence that investors had that we would be able to avoid a stock market collapse in the next six months began to decline significantly.  And guess what?  That is something else that is happening once again…

Investor confidence that the US will avoid a stock-market crash in the next six months has dropped dramatically since last spring.

The Yale School of Management publishes a monthly Crash Confidence Index. The index shows the proportion of investors who believe we will avoid a stock-market crash in the next six months.

Yale points out that “crash confidence reached its all-time low, both for individual and institutional investors, in early 2009, just months after the Lehman crisis, reflecting the turmoil in the credit markets and the strong depression fears generated by that event, and is plausibly related to the very low stock market valuations then.”

Are you starting to get the picture?

And of course I am not the only one warning about these things.  As I wrote about earlier in the week, there are a whole host of prominent voices that are now warning of imminent financial danger.

Today, I would like to add one more name to the list.  He is respected author James Howard Kunstler, and what he predicts is coming in 2015 is absolutely chilling…

*****

Here are my financial forecast particulars for 2015:

• Early in 2015 the ECB proposes a lame QE program and is laughed out of the room. European markets tank.

• Greek elections in January produce a government that stands up to the EU and ECB and causes a fatal slippage of faith in the ability of that project to continue.

• Second half of 2015, the rest of the world gangs up and counter-attacks the US dollar.

• Bond markets in Europe implode in first half and the contagion spreads to the US as fear and distrust rises about viability of US safe haven status.

• Derivatives associated with currencies, interest rates, and junk bonds trigger a bloodbath in credit default swaps (CDS) and the appearance of countless black holes through which debt and “wealth” disappear forever.

• US stock markets continue to bid upward in the first half of 2015, crater in Q3 as faith in paper and pixels erodes. DJA and S & P fall 30 to 40 percent in the initial crash, then further into 2016.

• Gold and silver slide in the first half, then take off as debt and equity markets craters, faith in abstract instruments evaporates, faith in central bank omnipotence dissolves, and citizens all over the world desperately seek safety from currency war.

• Goldman Sachs, Citicorp, Morgan Stanley, Bank of America, DeutscheBank, SocGen, all succumb to insolvency. American government and Federal Reserve officials don’t dare attempt to rescue them again.

• By the end of 2015, central banks everywhere stand in general discredit. In the US, the Federal Reserve’s mandate is publically debated and revised back to its original mission as lender of last resort. It is forbidden to engage in further interventions and a new less-secretive mechanism is drawn up for regulating basic interest rates.

• Oil prices creep back into the $65 – $70 range by May 2015. It is not enough to halt the destruction in the shale, tar sand, and deepwater sectors. As contraction in the failing global economy accelerates, oil sinks back to the $40 range in October…

• …unless mischief in the Middle East (in particular, the Islamic State messing with Saudi Arabia) leads to gross and perhaps fatally permanent disruption in world oil markets — and then all bets are off for both the continuity of advanced economies and for peace between nations.

*****

Personally, I don’t agree with Kunstler on all of the particulars and the timing of certain events, but overall I think that we are going to look back when the year is done and say that he was a lot more right than he was wrong.

We are moving into a time of extreme danger for the global economy.  There has never been a time when I have been more concerned about a new year since I began The Economic Collapse Blog back in 2009.

Over the past couple of years, we have been very blessed to be able to enjoy a bubble of relative stability.  But this period of stability also fooled many people into thinking that our economic problems had been fixed, when in reality they have only gotten worse.

We consume far more wealth than we produce, our debt levels are at record highs, and we are at the tail end of the largest Wall Street financial bubble in all of history.

It is inevitable that we are heading for a tragic conclusion to all of this.  It is just a matter of time.

Michael Snyder| The idea that the United States is on the brink of a horrifying economic crash is absolutely inconceivable to most Americans.  After all, the economy has been relatively stable for quite a few years and the stock market continues to surge to new heights.

Last Friday, the Dow and the S&P 500 both closed at brand new all-time record highs.  For the year, the S&P 500 is now up 9 percent and the Nasdaq is now up close to 11 percent. And American consumers are getting ready to spend more than 600 billion dollars this Christmas season. That is an amount of money that is larger than the entire economy of Sweden.

So how in the world can anyone be talking about economic collapse?

Yes, many will concede, we had a few bumps in the road back in 2008, but things have pretty much gotten back to normal since then, right?

Why be concerned about economic collapse when there is so much stability all around us?

Unfortunately, this brief period of stability that we have been enjoying is just an illusion.

The fundamental problems that caused the financial crisis of 2008 have not been fixed.  In fact, most of our long-term economic problems have gotten even worse.

But most Americans have such short attention spans these days.  In a world where we are accustomed to getting everything instantly, news cycles only last for 48 hours and 2008 might as well be an eternity ago.

In the United States today, our entire economic system is based on debt.

Without debt, very little economic activity happens. We need mortgages to buy our homes, we need auto loans to buy our vehicles and we need our credit cards to do our shopping during the holiday season.

So where does all of that debt come from?

It comes from the banks.

In particular, the “too big to fail banks” are the heart of this debt-based system.

Do you have a mortgage, an auto loan or a credit card from one of these “too big to fail” institutions? A very large percentage of the people that will read this article do.

And a lot of people might not like to hear this, but without those banks we essentially do not have an economy.

When Lehman Brothers collapsed in 2008, it almost resulted in the meltdown of our entire system. The stock market collapsed and we experienced an absolutely wicked credit crunch.

Unfortunately, that was just a small preview of what is coming.

Even though a few prominent “experts” such as New York Times columnist Paul Krugman have declared that the “too big to fail” problem is “over”, the truth is that it is now a bigger crisis than ever before.

Compared to five years ago, the four largest banks in the country are now almost 40 percent larger. The following numbers come from a recent article in the Los Angeles Times…

Just before the financial crisis hit, Wells Fargo & Co. had $609 billion in assets. Now it has $1.4 trillion. Bank of America Corp. had $1.7 trillion in assets. That’s up to $2.1 trillion.

And the assets of JPMorgan Chase & Co., the nation’s biggest bank, have ballooned to $2.4 trillion from $1.8 trillion.

At the same time that those banks have been getting bigger, 1,400 smaller banks have completely disappeared from the banking industry.

That means that we are now more dependent on these gigantic banks than ever.

At this point, the five largest banks account for 42 percent of all loans in the United States, and the six largest banks account for 67 percent of all assets in our financial system.

If someone came along and zapped those banks out of existence, our economy would totally collapse overnight.

So the health of this handful of immensely powerful banking institutions is absolutely critical to our economy.

Unfortunately, these banks have become deeply addicted to gambling.

Have you ever known people that allowed their lives to be destroyed by addictions that they could never shake?

Well, that is what is happening to these banks. They have transformed Wall Street into the largest casino in the history of the world. Most of the time, their bets pay off and they make lots of money.

But as we saw back in 2008, when they miscalculate things can fall apart very rapidly.

The bets that I am most concerned about are known as “derivatives“.  In essence, they are bets about what will or will not happen in the future. The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect. The reason these algorithms are not perfect is because they are based on assumptions, and those assumptions come from people. They might be really smart people, but they are still just people.

If things stay fairly stable like they have the past few years, the algorithms tend to work very well.

But if there is a “black swan event” such as a major stock market crash, a collapse of European or Asian banks, a historic shift in interest rates, an Ebola pandemic, a horrific natural disaster or a massive EMP blast is unleashed by the sun, everything can be suddenly thrown out of balance.

Acrobat Nik Wallenda has been making headlines all over the world for crossing vast distances on a high-wire without a safety net.  Well, that is essentially what our “too big to fail” banks are doing every single day.

With each passing year, these banks have become even more reckless, and so far there have not been any serious consequences.

But without a doubt, someday there will be.

What would you say about a bookie that took $200,000 in bets but that only had $10,000 to cover those bets?

You would certainly call that bookie a fool.

But that is what our big banks are doing.

Right now, JPMorgan Chase has more than 67 trillion dollars in exposure to derivatives but it only has 2.5 trillion dollars in assets.

Right now, Citibank has nearly 60 trillion dollars in exposure to derivatives but it only has 1.9 trillion dollars in assets.

Right now, Goldman Sachs has more than 54 trillion dollars in exposure to derivatives but it has less than a trillion dollars in assets.

Right now, Bank of America has more than 54 trillion dollars in exposure to derivatives but it only has 2.2 trillion dollars in assets.

Right now, Morgan Stanley has more than 44 trillion dollars in exposure to derivatives but it has less than a trillion dollars in assets.

Most people have absolutely no idea how incredibly vulnerable our financial system really is.

The truth is that these “too big to fail” banks could collapse at any time.

And when they fail, our economy will fail too.

So let us hope and pray that this brief period of false stability lasts for as long as possible.

Because when it ends, all hell is going to break loose.

As the major stock indices hit new record highs, many are left wondering how such a bull market can develop while the average worker faces layoffs, lower wages and rising costs.

The answer presents itself in the documented, admitted and openly acknowledged manipulations of the markets by governments, central bankers, and institutional banks.

In the age of quantitative easing and overt government intervention in the economy, it’s impossible to trust any of the economic statistics that we are being shown as indicators of the supposed health of our economy.

Whether it is GDP numbers, manufacturing data, inflation statistics or housing figures, all of the macroeconomic data that drives the financial news agenda are manipulated to suit the propagandistic purposes of the government and the central bankers.

Take 10 minutes and watch this excellent video featuring James Corbett below.

Via GlobalResearchTV:

Transcript AND Sources: http://www.corbettreport.com/?p=7029