Is
There Going To Be A Stock Market Crash In The Fall?
http://theeconomiccollapseblog.com
http://albertpeia.com/stockmarketcrashcoming.htm
{ Short answer, YES! If there’s
still any rationality left in these stock markets! }
’Is
the stock market going to crash by the end of this year? Are we on the
verge of major financial chaos on a global scale? Well, this is the time of the
year when investors start getting nervous. We all remember what happened
during the fall of 1929, the fall of 1987 and the fall of 2008. However,
it is important to keep in mind that we do not see a stock market crash in the
fall of every year. Some years the stock market cruises through the
months of September, October, November and December without any problems
whatsoever. But this year conditions certainly seem to be right for a
"perfect storm" to develop. Technical indicators are screaming
that a stock market decline is imminent and sources in the financial industry
all over the world are warning that a massive crisis is on the way. In
fact, the Telegraph ran a story with the following shocking headline the other
day: "Market
crash 'could hit within weeks', warn bankers". What you are
about to read should alarm you. But it is not a guarantee that anything
will or will not happen. When Ben Bernanke gives his speech at the
Jackson Hole summit on Friday he could announce to the rest of the world that
the Federal Reserve has decided to launch QE3 and that the Fed will be printing
up trillions of new dollars. If that happened global financial markets
would leap for joy. So it is always a dangerous thing when anyone out
there tries to tell you that they can "guarantee" what is about to
happen in the financial world. There are just so many moving parts.
But if we do not see major intervention by the governments of the world or by
global central banks a major financial crisis could rapidly develop this
fall. The conditions are certainly right for a stock market collapse, and
we could easily see a repeat of what happened back in 2008.
The truth is that the second half of
2012 looks a little bit more like the second half of 2008 with each passing
day.
For example, credit default swaps are
soaring just like we saw back during the last financial crisis. The
following is from a recent article in the Telegraph by Harry Wilson and
Philip Aldrick....
Insurance on the debt of several major
European banks has now hit historic levels, higher even than those recorded
during financial crisis caused by the US financial group's implosion nearly
three years ago.
Credit default swaps on the bonds of
Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among
others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS
were trading at 343.54 basis points, meaning the annual cost to insure £10m of
the state-backed lender's bonds against default is now £343,540.
The Telegraph also published some ominous warnings
from anonymous banking executives in their recent article....
"The problem is a shortage of
liquidity – that is what is causing the problems with the banks. It feels
exactly as it felt in 2008," said one senior London-based bank executive.
One anonymous banker was even bold
enough to predict a "market shock" for "September or
October"....
"I think we are heading for a
market shock in September or October that will match anything we have ever seen
before," said a senior credit banker at a major European bank.
Of course there are analysts on this
side of the pond that are incredibly bearish right now as well. The
warnings from Europe line up very well with what Bob Janjuah of Nomura
Securities has been saying....
Based on the reasons set out earlier
and also covered in my two prior notes, over the August to November period I am
looking for the S&P500 to trade off down from around 1400 to 1100/1000 – in
other words, I expect over the next four months to see global equity markets
fall by 20% to 25% from current levels and to trade at or below the lows of
2011! US equity markets, along with parts of the EM spectrum, will I think
underperform eurozone equity markets, where already very little hope resides.
Others are issuing similar
warnings. Just check out what a couple of Bank of America analysts said
in a report the other day....
Our strategists see an unusually high
number of macro catalysts over the next 3-6 months that could take markets
lower. We expect economic growth to disappoint in the second half of the year
in anticipation of the fiscal cliff. This would exacerbate any slowdown from
the deepening recession in Europe and decelerating growth in emerging markets.
There is also the ongoing tension in the Middle East, the potential for a US
credit downgrade and accelerating downward analyst estimate revisions. To top
it off, September is seasonally the weakest month of the year for stock price
returns.
There has been an unusual amount of
chatter in the financial world about the September to December time frame.
That could mean something or it could
mean nothing.
But is is very interesting to watch what some top financial
insiders are doing with their stocks right now.
Dennis Gartman, the publisher of the
Gartman Leter, has dumped all of his
stocks at this point.
As I have written about previously, George Soros has dumped all of his stock in
banking giants JP Morgan, Citigroup and Goldman Sachs.
Are they just being paranoid?
Or do they know something that we do
not?
If you are looking for the next
"Lehman Brothers moment" in the United States, you might want to
watch Morgan Stanley. Morgan Stanley was heavily involved in the Facebook
IPO disaster, earlier this year their credit rating was downgraded, and now
there are persistent rumors that Morgan Stanley is in big trouble and that it
will be allowed to fail. You can check out some of these rumors for
yourself here, here and here.
But of course as I have said all along
the center of the coming crisis is going to be in Europe, and many analysts agree with me. For example,
the following is what the chairman of Casey Research, Doug Casey, had to say during a recent interview....
Europe is a full cycle ahead of the
U.S. Its governments and its banks are both bankrupt. It's a couple of drunks
standing on the street corner holding each other up at this point. Europe is in
much worse shape than the U.S. It's highly regulated, highly taxed and much
more socially unstable.
Europe is going to be the epicenter of
the coming storm. Japan is waiting in the wings, as is China. This is going to
be a worldwide phenomenon. Of course, the U.S. will be in it, too. We're going
to see this all over the world.
Much of southern Europe is already
experiencing depression-like conditions.
Unemployment in both Greece and Spain is well above 20 percent and both
economies are steadily shrinking.
Money is flowing out of Spanish banks
at an unprecedented rate right now. Just take a look at these charts. The only
thing that is going to keep the Spanish banking system from totally collapsing
is outside intervention.
But the truth is that all of Europe is
in big trouble. Even German companies are slashing job right now. For
example, check out what Siemens is up to....
German engineering conglomerate Siemens
(SIEGn.DE) is in early internal talks to cut thousands of jobs in response to a
weakening economy, particularly in Europe, a German newspaper reported.
Decisions could be made in October or
November, according to daily Boersen-Zeitung, which did not specify its
sources.
A Siemens spokesman declined to
comment.
We are living in the greatest debt
bubble in the history of the world, and at some point that bubble is going to
burst in a very messy way.
It is vital that people understand that
our system is not even close to sustainable.
Knowing exactly when it will collapse
is not nearly as important as understanding that a collapse is absolutely
inevitable.
I think what former World Bank
economist Richard Duncan had
to say recently is very helpful....
“The explosion in credit drove economic
growth in the U.S. and around the world, and now that’s the only thing that’s
keeping us from collapsing in a debt/deflation spiral,” he said. “[What] I
think everybody needs to understand is that the kind of economy that we have
now, it’s not capitalism. It has very little in common with capitalism.
Capitalism was an economic system in which the government played very little
role …. Under capitalism, gold was money and the government had nothing to do
with it. Now the central bank creates the money and manipulates its value.”
And he is very right.
We aren't seeing a failure of
capitalism.
What we are witnessing is the failure
of debt-based central banking.
And if you think that the global elite
are not aware of what is happening then you have not been paying attention.
This summer the global elite have been
preparing very hard. Either they are getting very paranoid or they know
things that we do not.
If you want to catch up on what the
global elite have been up to recently, check out these three articles that I
have published previously....
-"Are
The Government And The Big Banks Quietly Preparing For An Imminent Financial
Collapse?"
-"Jacob
Rothschild, John Paulson And George Soros Are All Betting That Financial
Disaster Is Coming"
If you are waiting for the nightly news
to tell you what to do, then you have not learned anything.
Did anyone in the mainstream media warn
you about what was about to happen back in 2008?
Of course not.
The "authorities" insisted
that everything was going to be just fine and many average Americans were
absolutely wiped out.
So don't expect someone to come along
and nicely inform you that your retirement savings are about to be absolutely
devastated.
In this day and age it is absolutely
critical for people to learn to think for themselves.
Barack Obama is not going to save you.
Mitt Romney is not going to save you.
The U.S. Congress is not going to save
you. They are too busy living the high life at
taxpayer expense.
The system is not looking out for
you. Nobody is really going to care if your financial planning gets turned
upside down. This is a cold, cruel world and you need to understand how
the game is played. The financial insiders are looking out for themselves
and most of them usually are able to avoid financial disaster.
Average folks like you and I are normally
not so fortunate.
There are lots of warning signs that
indicate that this fall could be a very turbulent time for global financial
markets.
Ignore them at your own peril.’
