18 Signs That Massive Economic Problems Are Erupting All Over The Planet

With the “Hindenburg Omen” (reports to indicate a major stock market correction) triggered in the last week a lot of investors are getting a little worried. In the meantime global economic indicators continue to worsen.

The following are 18 signs that massive economic problems are erupting all over the planet…

#1 The eurozone is now in the midst of its longest recession ever.  Economic activity in the eurozone has declined for six quarters in a row.

#2 Italy’s economy has now been contracting for seven quarters in a row.

#3 Industrial production in Italy has fallen for 15 months in a row.  It has now fallen to its lowest level in about 25 years.

#4 The number of people that are considered to be “seriously deprived” in Italy has doubled over the past two years.

#5 Consumer confidence in France has just hit a new all-time low.

#6 The number of unemployed workers seeking a job in France has hit a brand new all-time record high.  Many unemployed workers in France are utterly frustrated at this point…

“I’ve sent CVs everywhere, I come to the unemployment agency every day, for 3 or 4 hours to look for work as a truck driver and there’s never anything,” said 42-year old Djamel Sami, who has been unemployed for a year, leaving a job agency in Paris.

#7 Unemployment in the eurozone as a whole has just hit a brand new all-time record high of 12.2 percent.

#8 Youth unemployment continues to soar to unprecedented heights in Europe.  The following is from an article that was recently posted on the website of the Guardian that detailed how bad things are getting in some of the worst countries…

In Greece, 62.5% of young people are out of work, in Spain it’s 56.4%, then Portugal with 42.5%, and then Italy with 40.5%.

#9 Youth unemployment is being partially blamed for the worst rioting that Sweden has seen in many years.  The following is how the Daily Mail described the riots…

Sweden is reeling after a third night of rioting in largely run-down immigrant areas of the capital Stockholm.In the last 48 hours violence has spread to at least ten suburbs with mobs of youths torching hundreds of cars and clashing with police. It is Sweden’s worst disorder in years and has shocked the country and provoked a debate on how Sweden is coping with youth unemployment and an influx of immigrants.

#10 An astounding 10 percent of all banking deposits were pulled out of banks in Cyprus during the month of April alone.

#11 Economic growth in India is the slowest that it has been in an entire decade.

#12 Suddenly Australia is experiencing some tremendous economic challenges.  The following quotes are from a recent Zero Hedge article…

-“We’re seeing a much sharper contraction in the Australian economy than we’d anticipated four or five months ago”. Coffey MD, John Douglas. The engineering group has seen its shares, which traded above $4 in 2007, hit 10c last week. -“By 10am, the Fitness First gym in the city is packed full of brokers who’ve had a gutful of sitting at their desk doing nothing – salary cuts are starting and next it will be jobs” Perth broker -“Oh mate, the funding market is dead. You are now seeing a few deeply discounted rights issues for those that are reaching desperate levels ….. liquidity has completely disappeared” Perth broker

#13 The financial system in Japan is beginning to spin wildly out of control.  The Japanese stock market has now declined about 15 percent from the peak, and many believe that the yen will continue to get weaker and that interest rates in Japan will start to rise significantly.

#14 Global cash flow is declining at a rate not seen since the last recession.  This indicates that we could be headed for a global credit crunch.

#15 Real wages continue to decline in the United States.  Even though we are being told that the U.S. is experiencing an “economy recovery”, real weekly earnings have declined from $297.79 in 2010 to $295.49 in 2011 to $294.83 in 2012.  (The preceding calculation is based on 1982-1984 dollars)

#16 Wall Street is buzzing about the fact that “the Hindenburg Omen” appeared at the end of last week.  So exactly what is “the Hindenburg Omen”?  The following are the criteria that are used to determine whether it has appeared or not…

1. The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day. 2. The smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues. 3. That the NYSE 10 Week moving average is rising.4. That the McClellan Oscillator ( a market breadth indicator used to evaluate the rate of money entering or leaving the market and interpretively indicate overbought or oversold conditions of the market)is negative on that same day.5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). When the Hindenburg Omen makes an appearance, it supposedly means that the U.S. stock market is likely to experience a serious decline within the next 40 days.

#17 As I wrote about the other day, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years.  That means that lots of “smart money” has been getting out of the market and lots of “dumb money” has been pouring in.

#18 Margin debt on the New York Stock Exchange has set a new all-time high.  The following is from a recent Market Oracle article…

Margin debt—that’s the amount of money borrowed to purchase stocks—on the New York Stock Exchange (NYSE) reached its all-time high in April. Margin debt on the NYSE registered at $384.3 billion as the key stock indices hit new record-highs. (Source: New York Stock Exchange web site, last accessed May 29, 2013.) The highest margin debt ever reached prior to this was in July of 2007, when it stood just above $381.0 billion. At that time, just like today, the key stock indices were near their peaks and “buy now before it’s too late” was the prominent theme of the day

Whenever margin debt spikes like this, a stock market crash almost always follows.  If you doubt this, just check out the chart in this article.

Wall Street has had a good couple of years, but it has been a “false prosperity” that has been pumped up by reckless money printing by the Federal Reserve.  Just like all of the other stock market bubbles that we have seen in recent years, this one is going to burst too.  And as Marc Faber recently pointed out, this bubble has been particularly beneficial to the wealthy…

The Fed has been flooding the system with money. The problem is the money doesn’t flow into the system evenly. It doesn’t increase economic activity and asset prices in concert. Instead, it creates dangerous excesses in countries and asset classes. Money-printing fueled the colossal stock-market bubble of 1999-2000, when the Nasdaq more than doubled, becoming disconnected from economic reality. It fueled the housing bubble, which burst in 2008, and the commodities bubble. Now money is flowing into the high-end asset market – things like stocks, bonds, art, wine, jewelry, and luxury real estate. Money-printing boosts the economy of the people closest to the money flow. But it doesn’t help the worker in Detroit, or the vast majority of the middle class. It leads to a widening wealth gap. The majority loses, and the minority wins.

The fact that the U.S. stock market has set new all-time record high after new all-time record high in recent months means very little.  At this point, the stock market has become completely divorced from economic reality.  When this current bubble bursts, the adjustment is going to be very painful.  Wall Street will likely whine and complain and ask for more bailouts, but they may find that authorities are not nearly as sympathetic this time.

Much of the rest of the world is already experiencing the next major wave of the economic collapse.  Reckless money printing by the Fed and reckless borrowing and spending by the federal government may have delayed the inevitable in the United States for a little while, but those measures have also made our long-term problems even worse.

There was one piece of advice that Ben Bernanke included in his commencement speech to students at Princeton recently that I thought was particularly ironic…

“Don’t be afraid to let the drama play out.”

Will he take his own advice when the next great financial crisis strikes the United States?

That seems very unlikely.

Unfortunately, things are not going to be so easy to fix this next time.

What happened back in 2008 was just a preview.

What is coming next is going to absolutely shock the world.

Source: theeconomiccollapseblog.com

$36 Trillion of Stock Certificates Potentially Destroyed By Hurrucane Sandy

The DTCC (Depository Trust & Clearing Corp) owned by the FED, is the clearing house for Wall Street that is responsible for storing over £36 trillion work of share certificates. These paper certificates unfortunately are stored in a vault in lower Manhattan which is currently submerged after Hurricane Sandy. Who knows when the water will be pumped out and how many share certificates are damaged.

Trillions of dollars worth of stock certificates and other paper securities that were stored in a vault in lower Manhattan may have suffered water damage from Superstorm Sandy.

The Depository Trust & Clearing Corp., an industry-run clearing house for Wall Street, said the contents of its vault “are likely damaged,” after its building at 55 Water Street “sustained significant water damage” from the storm that battered New York City’s financial district earlier this week.

The vault contains certificates registered to Cede & Co., a subsidiary of DTCC, as well as “custody certificates” in sealed envelopes that belong to clients.

The DTCC provides “custody and asset servicing” for more than 3.6 million securities worth an estimated $36.5 trillion, according to its website.

“At this point, it is premature to make an accurate assessment as to the full impact of the water damage nor would it be helpful to project on what specific actions need to be taken with respect to our vault,” said DTCC Chief Executive Michael Bodson in a statement. “We are aggressively working on this situation to minimize disruption to our clients and will provide additional updates as more information becomes available.”

Bodson said the DTCC’s computer records are intact and that the corporation has “detailed inventory files of the contents of the vault.”

The building remains inaccessible, but the lower floors are believed to be flooded. The full extent of the damage cannot be assessed until power is restored and the building is deemed safe to enter.

The DTCC has been operating from remote facilities since the onset of the storm and has maintained clearing, settlement and other services that are crucial to the functioning of Wall Street, according to Bodson.

Bodson said the DTCC is working with couriers to ensure that all deliveries are rerouted to a facility in Brooklyn, and the group expects all other services related to physical securities processing to resume “in the next several days,” he added.

 

Source: CNN

Another Example Of Rigging The Stock Market

High frequency trading on steroids. Nanex spotted the trading activity when 4% of the traffic volume were for orders by a computer algorithm where none of them ended in a single trade. Quite clearly the intention was to move the market in a certain direction. It’s just another example that the whole financial system is rotten to the core.

A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4 percent of all quote traffic in the U.S. stock market last week, according to the top tracker of high-frequency trading activity. The motive of the algorithm is still unclear.

The program placed orders in 25-millisecond bursts involving about 500 stocks, according to Nanex, a market data firm. The algorithm never executed a single trade, and it abruptly ended at about 10:30 a.m. ET Friday.

“Just goes to show you how just one person can have such an outsized impact on the market,” said Eric Hunsader, head of Nanex and the No. 1 detector of trading anomalies watching Wall Street today. “Exchanges are just not monitoring it.”

Hunsader’s sonar picked up that this was a single high-frequency trader after seeing the program’s pattern (200 fake quotes, then 400, then 1,000) repeated over and over. Also, it was being routed from the same place, the Nasdaq

 “My guess is that the algo was testing the market, as high-frequency frequently does,” says Jon Najarian, co-founder of TradeMonster.com. “As soon as they add bandwidth, the HFT crowd sees how quickly they can top out to create latency.” (Read More: Unclear What Caused Kraft Spike: Nanex Founder.)

Translation: The ultimate goal of many of these programs is to gum up the system so it slows down the quote feed to others and allows the computer traders (with their co-located servers at the exchanges) to gain a money-making arbitrage opportunity.

The scariest part of this single program was that its millions of quotes accounted for 10 percent of the bandwidth that is allowed for trading on any given day, according to Nanex. (The size of the bandwidth pipe is determined by a group made up of the exchanges called the Consolidated Quote System.)

Source: CNBC

October Is The Month For Stock Market Crashes

Stock market crashes have a habit of happening in October something I’m sure Obama does not want to happen so close to the election. But even if nothing happens the fundamentals are examined in an article from theeconomiccollapseblog which takes a closer look.

In the financial world, the month of October is synonymous with stock market crashes.  So will a massive stock market crash happen this year?  You never know. The truth is that our financial system is even more vulnerable than it was back in 2008, and financial experts such as Doug Short, Peter Schiff, Robert Wiedemer and Harry Dent are all warning that the next crash is rapidly approaching.

We are living in the greatest debt bubble in the history of the world and Wall Street has been transformed into a giant casino that is based on a massive web of debt, risk and leverage.  When that web breaks we are going to see a stock market crash that is going to make 2008 look like a Sunday picnic.  Yes, the Federal Reserve has tried to prevent any problems from erupting in the financial markets by initiating another round of quantitative easing, but 40 billion dollars a month will not be nearly enough to stop the massive collapse that is coming.  This will be explained in detail toward the end of the article.  Hopefully we will get through October (and the rest of this year) without seeing a stock market collapse, but without a doubt one is coming at some point.  Those on the wrong end of the coming crash are going to be absolutely wiped out.

A lot of people focus on the month of October because of the history of stock market crashes in this month.  This history was detailed in a recent USA Today article….

When it comes to wealth suddenly disappearing, October can be diabolically frightful. The stock market crash of 1929 that led to the Great Depression occurred in October. So did the 22.6% plunge suffered by the Dow Jones industrial average in 1987 on “Black Monday.”

The scariest 19-day span during the 2008 financial crisis also went down in October, when the Dow plunged 2,675 points after investors fearing a financial collapse went on a panic-driven stock-selling spree that resulted in five of the 10 biggest daily point drops in the iconic Dow’s 123-year history.

So what will we see this year?

Only time will tell.

If a stock market crash does not happen this month or by the end of this year, that does not mean that the experts that are predicting a stock market crash are wrong.

It just means that they were early.

As I have said so many times, there are thousands upon thousands of moving parts in the global financial system.  So that makes it nearly impossible to predict the timing of events with perfect precision.  Financial conditions are constantly shifting and changing.

But without a doubt another major financial collapse similar to what happened back in 2008 (or even worse) is on the way.  Let’s take a look at some of the financial experts that are predicting really bad things for our financial markets in the months ahead….

Doug Short

According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point.  In a recent article he offered the following evidence to support his position….

● The Crestmont Research P/E Ratio (more)

● The cyclical P/E ratio using the trailing 10-year earnings as the divisor (more)

● The Q Ratio, which is the total price of the market divided by its replacement cost (more)

● The relationship of the S&P Composite price to a regression trendline (more)

Peter Schiff

Peter Schiff, the CEO of Euro Pacific Capital, has been one of the leading voices in the financial community warning people about the crisis that is coming.

During a recent interview with Fox Business, Schiff stated that the massive financial collapse that we witnessed back in 2008 “wasn’t the real crash” and he boldly declared that the “real crash is coming”.

So is Schiff right?

We shall see.

Robert Wiedemer

Economist Robert Wiedemer warned people what was coming before the crash of 2008, and now he is warning that what is coming next is going to be even worse….

“The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012.”

Harry Dent

Financial author Harry Dent believes that the stock market could fall by as much as 60 percent in the coming months.  He is convinced that stocks are hugely overvalued right now….

“We have the greatest debt bubble in history. We will see a worldwide downturn. And when you are in this type of recessionary environment stocks should be trading at five to seven times earnings.”

So are these guys right?

We shall see.

But I do find it interesting that some of the biggest names in the financial world are currently making moves as if they also believe that a massive financial crisis is coming.

For example, as I have written about previously, George Soros has dumped all of his holdings in banking giants JP Morgan, Citigroup and Goldman Sachs.

Infamous billionaire hedge fund manager John Paulson, the man who made somewhere around 20 billion dollars betting against the U.S. housing market during the last financial crisis, is making massive bets against the euro right now.

So where are these financial titans putting their money?

According to the Telegraph, both of these men are pouring enormous amounts of money into gold….

There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).

Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.

At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.

So why would they do this?

Why would they pour millions upon millions of dollars into gold?

Well, it would make perfect sense to put so much money into gold if a massive financial crisis was coming.

So is the next financial crisis imminent?

We will see.

Most “financial analysts” that appear in the mainstream media would laugh at the notion that a stock market crash is imminent.

Most of them would insist that everything is going to be perfectly fine for the foreseeable future.

In fact, most of them are convinced that quantitative easing is going to cause stocks to go even higher.

After all, isn’t quantitative easing supposed to be good for stocks?

Didn’t I write an article just last month that detailed how quantitative easing drives up stock prices?

Yes I did.

So how can I be writing now about the possibility of a stock market crash?

Aren’t I contradicting myself?

Not at all.

Let me explain.

The first two rounds of quantitative easing did indeed drive up stock prices.  The same thing will happen under QE3, unless the effects of QE3 are overwhelmed by a major crisis.

For example, if we were to see a total collapse of the derivatives market it would render QE3 totally meaningless.

Estimates of the notional value of the worldwide derivatives market range from 600 trillion dollars all the way up to 1.5 quadrillion dollars.  Nobody knows for sure how large the market for derivatives is, but everyone agrees that it is absolutely massive.

When we are talking about amounts that large, the $40 billion being pumped into the financial system each month by the Federal Reserve during QE3 would essentially be the equivalent of spitting into Niagara Falls.  It would make no difference at all.

Most Americans do not understand what “derivatives” are, so they kind of tune out when people start talking about them.

But they are very important to understand.

Essentially, derivatives are “side bets”.  When you buy a derivative, you are not investing in anything.  You are just gambling that something will or will not happen.

I explained this more completely in a previous article entitled “The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System“….

A derivative has no underlying value of its own.  A derivative is essentially a side bet.  Usually these side bets are highly leveraged.

At this point, making side bets has totally gotten out of control in the financial world.  Side bets are being made on just about anything you can possibly imagine, and the major Wall Street banks are making a ton of money from it.  This system is almost entirely unregulated and it is totally dominated by the big international banks.

Over the past couple of decades, the derivatives market has multiplied in size.  Everything is going to be fine as long as the system stays in balance.  But once it gets out of balance we could witness a string of financial crashes that no government on earth will be able to fix.

Five very large U.S. banks (including Goldman Sachs, JP Morgan and Bank of America) have combined exposure to derivatives in excess of 250 trillion dollars.

Keep in mind that U.S. GDP for 2011 was only about 15 trillion dollars.

So we are talking about an amount of money that is almost inconceivable.

That is why I cannot talk about derivatives enough.  In fact, I apologize to my readers for not writing about them more.

If you want to understand the coming financial collapse, one of the keys is to understand derivatives.  Our entire financial system has been transformed into a giant casino, and at some point all of this gambling is going to cause a horrible crash.

Do you remember the billions of dollars that JP Morgan announced that they lost a while back?  Well, that was caused by derivatives trades gone bad.  In fact, they are still not totally out of those trades and they are going to end up losing a whole lot more money than they originally anticipated.

Sadly, that was just the tip of the iceberg.  Much, much worse is coming.  When you hear of a major “derivatives crisis” in the news, you better run for cover because it is likely that the entire house of cards is about to start falling.

And don’t get too caught up in the exact timing of predictions.

If a stock market crash does not happen this month, don’t think that the storm has passed.

A major financial crisis is coming.  It might not happen this week, this month or even this year, but without a doubt it is approaching.

And when it arrives it is going to be immensely painful and it is going to change all of our lives.

I hope you are ready for that.

Insiders Preparing For Something Big

The signs are appearing more frequently that a massive financial collapse is a very distinct possibility. One big clue is to follow what the “insiders” are doing.

 Time is running out !

If you want to figure out what is going to happen next in the financial markets, carefully watch what the insiders are doing.  Those that are “connected” have access to far better sources of information than the rest of us have, and if they hear that something big is coming up they will often make very significant moves with their money in anticipation of what is about to happen.  Right now, Wall Street insiders and central banks all around the globe are making some very unusual moves.  In fact, they appear to be rapidly preparing for something really big.  So exactly what are they up to?  In a previous article entitled “Are The Government And The Big Banks Quietly Preparing For An Imminent Financial Collapse?“, I speculated that they may be preparing for a financial meltdown of some sort.  As I noted in that article, more than 600 banking executives have resigned from their positions over the past 12 months, and I have been personally told that a substantial number of Wall Street bankers have been shopping for “prepper properties” this summer.  But now even more evidence has emerged that quiet preparations are being made for an imminent financial collapse.  That doesn’t guarantee that something will happen or won’t happen.  Like any good detective, we are gathering clues and trying to figure out what the evidence is telling us.

Why Is George Soros Selling So Much Stock And Buying So Much Gold?

I am certainly not a fan of George Soros.  He has funneled millions upon millions of dollars into organizations that are trying to take America in the exact wrong direction.

However, I do recognize that he is extremely well connected in the financial world.  Soros is almost always ahead of the curve on financial matters, and if something big is going to go down George Soros is probably going to know about it ahead of time.

That is why it is very alarming that he has dumped all of his banking stocks and that he is massively hoarding gold.  The following is from shtfplan.com….

In a harbinger of what may be coming our way in the Fall of 2012, billionaire financier George Soros has sold all of his equity positions in major financial stocks according to a 13-F report filed with the SEC for the quarter ending June 30, 2012.

Soros, who manages funds through various accounts in the US and the Cayman Islands, has reportedly unloaded over one million shares of stock in financial companies and banks that include Citigroup (420,000 shares), JP Morgan (701,400 shares) and Goldman Sachs (120,000 shares). The total value of the stock sales amounts to nearly $50 million.

What’s equally as interesting as his sale of major financials is where Soros has shifted his money. At the same time he was selling bank stocks, he was acquiring some 884,000 shares (approx. $130 million) of Gold via the SPDR Gold Trust.

Why would you dump over a million shares of stock in major banks and purchase more than 100 million dollars worth of gold?

Well, it would make perfect sense if you believed that a collapse of the financial system was about to happen.

Earlier this year, George Soros told the following to Newsweek….

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros tells Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

It looks like he is putting his money where his mouth is.

Perhaps even more disturbing is what he believes is coming after the financial collapse….

As anger rises, riots on the streets of American cities are inevitable. “Yes, yes, yes,” he says, almost gleefully. The response to the unrest could be more damaging than the violence itself. “It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States.”

That doesn’t sound good.

George Soros has told us what he believes is going to happen, and now he is making moves with his money that indicate that he is convinced that it is actually about to start happening.

But he is not the only one that has been busy accumulating gold.

Billionaire John Paulson (the one that made 20 billion dollars on the subprime mortgage meltdown) has been buying gold like crazy and his company now “has 44 percent of its $24 billion fund exposed to bullion.“

So why are Soros and Paulson buying up so much gold?

Central Banks Are Also Hoarding Gold

According to the World Gold Council, the amount of gold bought by the central banks of the world absolutely soared during the second quarter of 2012.  The 157.5 metric tons of gold bought by the central banks of the world last quarter was an increase of 62.9 percent from the first quarter of 2012 and a 137.9 percent increase from the second quarter of 2011.

Prior to 2009, the central banks of the world had been net sellers of gold for about two decades.  But now that has totally changed, and last quarter central banks stocked up on gold in quantities that we have not seen before….

At 157.5 metric tons, gold buying among central banks came in at its highest quarterly level since the sector became a net buyer of the precious metal in the second quarter of 2009, data in the organization’s quarterly Gold Demand Trends report show.

So why have the central banks of the world become such gold bugs?

Is there something they aren’t telling us?

Rampant Insider Selling

Wall Street insiders have been dumping a whole lot of stock this year.

In my previous article, I linked to a CNN article from back in April….

First quarter earnings have been decent, if not spectacular. And many corporate executives are issuing cautiously optimistic guidance for the rest of the year.

But while insiders’ lips are saying one thing, their wallets are saying another. The level of insider selling among S&P 500 (SPX) companies is the highest in nearly 10 years. That is not good.

A lot of insiders appear to be getting out at the top of the market while the getting is still good.

Other insiders appear to be bailing out before the bottom falls out from beneath them.

Just check out what has been happening to Facebook stock.  It hit another new record low on Thursday as insiders dumped stock.  The following is from a CNN article….

Facebook’s life as a public company has been a nightmare from day one, and the pain continued on Thursday as some company insiders got their first chance to dump shares.

Facebook stock hit a new intra-day low of $19.69 Thursday morning, and ended the day 6.3% lower at $19.87.

Sadly, Facebook has now lost close to half of its value since the IPO.

Will Facebook end up being the poster child for the irrational stock market bubble that we have seen over the past couple of years?

Overall, retail investors have been very busy pulling money out of stocks in recent weeks.

The following are the net inflows to equity funds over the past five weeks (in millions of dollars) according to ICI….

7/11/2012: -537

7/18/2012: 637

7/25/2012: -2,999

8/1/2012: -6,866

8/8/2012: -3,684

According to the figures above, more than 10 billion dollars has been pulled out of equity funds over the past two weeks alone.

So does this mean anything?

Maybe.

Maybe not.

But it is very interesting and it bears watching.

Why Does The U.S. Government Need So Much Ammunition?

In my previous article, I also noted that the U.S. government appears to be very rapidly making preparations for something really big.

This week, it was revealed that the Social Security Administration plans to buy 174,000 hollow point bullets which will be delivered to 41 different locations all over America.

Now why in the world does the Social Security Administration need 174,000 bullets?

And why do they need hollow point bullets?  Those bullets are designed to cause as much damage to internal organs as possible.

But of course this is only the latest in a series of very large purchases of ammunition by U.S. government agencies.  The following is from a recent article by Paul Joseph Watson….

Back in March, Homeland Security purchased 450 million rounds of .40-caliber hollow point bullets that are designed to expand upon entry and cause maximum organ damage, prompting questions as to why the DHS needed such a large amount of powerful bullets merely for training purposes.

This was followed by another DHS solicitation asking for a further 750 million rounds of assorted bullets, including 357 mag rounds that are able to penetrate walls.

Now why in the world would the government need over a billion rounds of ammunition?

If it was the U.S. military I could understand this.  You can burn through a whole lot of ammunition fighting wars.

But this makes no sense – unless they believe that big trouble is coming.

Personally, I wouldn’t blame them for getting prepared.  Our economy continues to fall apart and there are signs of social decay everywhere around us.

The American people are more frustrated and more angry than at any other time in modern history.  This upcoming election is only going to cause Americans to become even more angry and even more divided.

All it would take is just the right “spark” to cause this country to erupt.

It could be the upcoming election.

It could be the collapse of the financial system.

Or it might be something else.

But the conditions are definitely there for it to happen.

Unfortunately, the American public is never told to prepare because authorities never want “to panic” the general population.

We are always the last to know, and that stinks.

So don’t wait for someone to come on the television and announce that a crisis is happening.

If you wait that long, it will be too late.

Instead, open up your eyes and think for yourself.

We all need to work hard to get prepared for the coming crisis while we still can.

As you can see, Wall Street insiders, the U.S. government and the central banks of the world are busy getting prepared.

Don’t put your head in the sand.

The warning signs are there and time is running out.

Source: http://theeconomiccollapseblog.com

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Economic Collapse For Dummies

Highly recommend viewing.

What Happens When Fiat Currency Dies?

Nice article on ZeroHedge explaining the steps of a fiat currency dying.Funny ting is, the pattern has remained the same for the last 4000 years. Why would it be any different this time?

 

This is today’s reality. It can happen here, it probably will happen here. And frankly, it’s all unfolding almost exactly as it has so many times before throughout history:

1. A nation rises to greatness and becomes wealthy based on sound principles and the hard work of initial generations.

2. Eventually, being wealthy becomes the natural expectation… an entitlement, rather than a goal to work hard for and achieve.

3. A nation begins living beyond its means to maintain the high life without the hard work, leveraging its credibility to trade tomorrow’s production for today’s consumption.

4. Living beyond its means eventually becomes unsustainable. Government begins to slowly, then staggeringly, devalue its currency.

5. The market (i.e. people) finally wake up to the fraud being perpetrated.

6. Financial repression usually follows– high taxes which steal from the productive, negative real interest rates which steal from the savers, etc.

7. Capital flight comes next. People take their money and run.

8. Governments implement capital controls, border controls, price and wage controls, and anything else they can do to maintain the status quo. People find out who the police are really there to protect and serve.

9. Capitulation (default) is the endgame; the system resets itself and begins anew.

This is nothing new. From the 3rd Dynasty of Ur (2000 BC) to Medieval Venice to the familiar stories of Rome and the Ottoman Empire, the world is full of monuments to the past greatness of failed civilizations.

We’re seeing the same pattern unfolding now. And sure, anything’s possible. Maybe the skies open up and the unicorns come out to play and the whole world manages to fix itself without skipping a beat.

But let’s live in reality: there are consequences when nations go bankrupt. And nearly every western nation on the planet is insolvent. That is a fact.

Certainly, the lies from our political leaders are entertaining. But how many more revolutions, riots, defaults, bank runs, stimulus packages, nationalizations, tax increases, pension grabs, etc. will it take to acknowledge what’s happening?

Can anyone afford to keep ignoring reality? Can you?

Machines Account For 84% of Stock Trades

Most people’s confidence in the stock market has taken a hit over the last few years and more and more trades are dominated by high frequency trading (HFT). Morgan Stanley recently reported that now machines account for over 84% of the market. This accounts for the flash crashes but what would happen if the plug was pulled overnight when 84% of trades are computer programes.

Morgan Stanley has just shown (via the Financial Times) that the percentage of high frequency trading in the stock market has skyrocketed to 84%:

Trading by “real” investors is taking up the smallest share of US stock market volumes [since Morgan Stanley  started keeping track 10 years ago.]

The findings highlight how US trading activity is increasingly being fuelled by fast turnover of shares by independent firms and the market-making desks of brokerages, many using high-frequency trading engines. [actually all of the market-making desks are using it.]

***

The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions and brokerages, referred to as “real money” or institutional investors, accounted for just 16 per cent of total market volume in the form of buying, and 13 per cent via selling in the final quarter of last year, according to analysis by Morgan Stanley’s Quantitative and Derivative Strategies group.

It’s not just the U.S. High frequency trading dominates in the U.K. as well.

 

Source: Ritholtz

http://en.wikipedia.org/wiki/High-frequency_trading

China To Force Pension Funds To Invest In Stock Market

In an attempt to reflate the bubble in its stock market,  the Chinese regulator is looking to “actively” push, pension funds and housing funds to invest in stocks. The line from the original Bloomberg report was 

“China’s stocks regulator will “actively” push pension and housing funds to begin investing in capital markets, and encourage long-term investors such as insurers and corporate pension plans to buy more shares.”

I think we all know what the expression “actively push” means in China. To force someone to invest in a stock market can only end in tears and smacks of desperation by a regime trying to keep the Ponzi scheme going. Between China, US and Europe, nobody wants to be the first to fall, as the other will undoutbidly benifit from capital flight.

This ties in with a previous post where the Shanghai Exchange dropped 22% last year.

Source: ZeroHedge