Signs
Of Financial Turmoil In Europe, China And The United States
As
we move toward the second half of 2015, signs of financial turmoil are
appearing all over the globe. In Greece, a full blown bank run is
happening right now. Approximately 2 billion euros were pulled out of
Greek banks in just the past three days, Barclays says that capital controls
are “imminent” unless a debt deal is struck, and
there are reports that preparations are being made for a “bank holiday” in Greece.
Meanwhile, Chinese stocks are absolutely crashing. The Shanghai Composite
Index was down more than 13 percent this week alone. That was the largest
one week decline since the collapse of Lehman Brothers. In the U.S.,
stocks aren’t crashing yet, but we just witnessed one of the largest one week
outflows of capital from the bond markets that we have ever witnessed.
Slowly but surely, we are starting to see the smart money head for the
exits. As one Swedish fund manager put it recently, everyone wants “to
avoid being caught on the wrong side of markets once the herd realizes stocks
are over-valued“. (Read More....)
Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction
And ‘Are Likely To Cause Big Trouble’
After all these years, the most
famous investor in the world still believes that derivatives are financial
weapons of mass destruction. And you know what? He is exactly
right. The next great global financial collapse that so many are warning about is
nearly upon us, and when it arrives derivatives are going to play a starring
role. When many people hear the word “derivatives”, they tend to tune out
because it is a word that sounds very complicated. And without a doubt,
derivatives can be enormously complex. But what I try to do is to take
complex subjects and break them down into simple terms. At their core,
derivatives represent nothing more than a legalized form of gambling. A
derivative is essentially a bet that something either will or will not happen
in the future. Ultimately, someone will win money and someone will lose
money. There are hundreds of trillions of dollars worth
of these bets floating around out there, and one of these days this gigantic
time bomb is going to go off and absolutely cripple the entire global financial
system. (Read More....)
