‘The summer of 2012 is shaping up to be very similar to the summer of 2008. Things look incredibly bleak for the global economy right now. Economic activity and lending are slowing down all over the planet, and fear is starting to paralyze the entire global financial system. Things did not look this bad back in the summer of 2011 and things certainly did not look this bad back in the summer of 2010. It is almost as if a "perfect storm" is brewing. Today, the global financial system is a finely balanced pyramid of risk, debt and leverage. Such a system requires a high degree of confidence and stability. But when confidence disappears and fear and panic take over, the house of cards can literally start collapsing at any time. Right now we are watching a slow-motion train wreck unfold and nobody seems to know how to stop it. Unless some kind of a miracle happens, things are going to look much different when we reach the start of 2013 than they do today.
The following are 21 signs that this could be a long, hot, crazy summer for the global financial system....
#1 There are rumors that major financial institutions are cancelling employee vacations in anticipation of a major financial crisis this summer. The following are a couple of tweets quoted in a recent article by Kenneth Schortgen Jr....
Todd Harrison tweet: Hearing (not confirmed) @PIMCO asked employees to cancel vacations to have "all hands on deck" for a Lehman-type tail event. Confirm?
Todd M. Schoenberger tweet: @todd_harrison @pimco I heard the same thing, but I also heard the same for "some" at JPM. Heard it today at a hedge fund luncheon.
As Schortgen points out, these are not just your average Twitter users....
Todd Harrison is the CEO of the award winning internet media company Minyanville, while Todd Shoenberger is a managing principal at the Blackbay Group, and an adjunct professor of Finance at Cecil College.
#2 The Bank for International Settlements is warning that global lending is contracting at the fastest pace since the financial crisis of 2008.
#3 Unemployment in the eurozone has hit a brand new all-time record high.
#4 The government of
#6 Yields on Spanish debt and yields on Italian debt have been absolutely soaring.
#7 10 year
are at 1.46 because people are freaking out," says Mark Vitner, senior economist at Wells
#8 New orders for factory goods in the
#10 Economies all over the developed world are seriously slowing down right now. The following is from a recent article by Ambrose Evans-Pritchard....
#11 Stocks in
#12 Over the past five years, the stock markets of
#13 The Greek economy is literally shutting down. Just check out the chaos that unpaid bills are already causing....
unpaid bills are now threatening
#14 It is estimated that there are 273 billion dollars of failed real estate loans in the Spanish banking system.
#15 In March, 66 billion euros
was pulled out of Spanish banks and sent out of the country. That was an
all-time record and that was before we even knew the results of the recent
#16 The unemployment rate in
Italian Prime Minister Silvio Berlusconi is warning that
are in shock. Confidence has collapsed. We have never had such a dark
future," he said. Indeed, the jobless rate for youth has jumped from 27pc
to 35pc in a year. Terrorism has returned. Anarchists
knee-capped the head of Ansaldo Nucleare
#18 It now looks like
#20 As I wrote about the other day, World Bank President Robert Zoellick is warning that "the summer of 2012" could end up being very similar to what we experienced back in 2008....
"Let’s not delude ourselves: If the euro falls apart, so will the European Union, triggering a global economic crisis on a scale that most people alive today have never experienced"
When was the last time that we saw so much bad economic news come out all at once?
We truly live in unprecedented times.
It will be exciting to watch what happens, but it is also important to keep in mind that the coming economic crisis will cause extreme pain for millions upon millions of people.
For example, the suicide of a mother and a son due to the deteriorating economy has absolutely shocked the entire nation of Greece....
60-year-old Greek musician and his 91-year-old mother jumped to their deaths
from their 5th floor apartment, driven to despair by financial woes. This
double death is the latest in a rising epidemic of crisis-induced suicides in
Witness accounts vary – some say the mother, who suffered from Alzheimer’s, jumped first, screaming a prayer as she plummeted to her death. Other neighbors say the mother and her son jumped together, holding hands.
But the one thing everyone seems to agree on is that the family had been struggling for a long time. The night before, Antonis Perris posted a suicide note of sorts on a popular Greek forum, saying he had no way of resolving the family’s financial issues.
“The problem is that I didn’t realize that I would need to have cash, because the economic crisis came so suddenly. Even though I have been selling our possessions, we have no cash flow, we have no money to buy food anymore and my credit card is maxed out with 22% interest rate.”
Perris continued to say that both his and his mother’s health deteriorated, and that he saw no solution to his most basic problems – getting food and medical help.
This is why it is so incredibly important to get prepared.
You don't want something like that happening to you or anyone in your family.