Will global financial markets reach a breaking point during the month of October? Right now there are all kinds of signs that the financial world is about to experience a nervous breakdown. Massive amounts of investor money is being pulled out of the stock market and mammoth bets are being made against the S&P 500 in October. The European debt crisis continues to grow even worse and weird financial moves are being made all over the globe. Does all of this unusual activity indicate that something big is about to happen? Let's hope not. But historically, the biggest stock market crashes have tended to happen in the fall. So are we on the verge of a "Black October"?
The following are 21 signs that something big is about to happen in the financial world and that global financial markets are on the verge of a nervous breakdown....
#1 We are seeing an amazing number of bets against the S&P 500 right now. According to CNN, the number of bets against the S&P 500 rose to the highest level in a year last month. But that was nothing compared to what we are seeing for October. The number of bets against the S&P 500 for the month of October is absolutely astounding. Somebody is going to make a monstrous amount of money if there is a stock market crash next month.
#2 Investors are pulling a huge amount of money out of stocks right now. Do they know something that we don't? The following is from a report in the Financial Post....
Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the collapse of Lehman Brothers Holdings Inc., adding to the $2.1 trillion rout in American stocks.
About $75 billion was withdrawn from funds that focus on shares during the past four months, according to data compiled by Bloomberg from the Investment Company Institute, a Washington-based trade group, and EPFR Global, a research firm in Cambridge, Massachusetts. Outflows totaled $72.8 billion from October 2008 through February 2009, following Lehman’s bankruptcy, the data show.
#3 Siemens has pulled more than half a billion euros out of two major French banks and has moved that money to the European Central Bank. Do they know something or are they just getting nervous?
#4 On Monday, Standard & Poor's cut Italy's credit rating from A+ to A.
#5 The European Central Bank is purchasing even more Italian and Spanish bonds in an attempt to cool down the burgeoning financial crisis in Europe.
#6 The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank have announced that they are going to make available an "unlimited" amount of money to European commercial banks in October, November and December.
#7 So far this year, the largest bank in Italy has lost over half of its value and the second largest bank in Italy is down 44 percent.
#8 Angela Merkel's coalition is getting embarrassed in local elections in Germany. A recent poll found that an astounding 82 percent of all Germans believe that her government is doing a bad job of handling the crisis in Greece. Right now, public opinion in Germany is very negative toward the bailouts, and that is really bad news for Greece.
#9 Greece is experiencing a full-blown economic collapse at this point. Just consider the following statistics from a recent editorial in the Guardian....
Consider first the scale of the crisis. After contracting in 2009 and 2010, GDP fell by a further 7.3% in the second quarter of 2011. Unemployment is approaching 900,000 and is projected to exceed 1.2 million, in a population of 11 million. These are figures reminiscent of the Great Depression of the 1930s.
#10 In 2009, Greece had a debt to GDP ratio of about 115%. Today, Greece has a debt to GDP ratio of about 160%. All of the austerity that has been imposed upon them has done nothing to solve their long-term problems.
#11 The yield on 1 year Greek bonds is now over 129 percent. A year ago the yield on those bonds was under 10 percent.
#12 Greek Deputy Finance Minister Filippos Sachinidis says that Greece only has enough cash to continue operating until next month.
#13 Italy now has a debt to GDP ratio of about 120% and their economy is far, far larger than the economy of Greece.
#14 The yield on 2 year Portuguese bonds is now over 17 percent. A year ago the yield on those bonds was about 4 percent.
#15 China seems to be concerned about the stability of European banks. The following is from a recent Reuters report....
A big market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, two sources told Reuters on Tuesday.
#16 European central banks are now buying more gold than they are selling. This is the first time that has happened in more than 20 years.
#17 The chief economist at the IMF says that the global economy has entered a "dangerous new phase".
#18 Israel has dumped 46 percent of its U.S. Treasuries and Russia has dumped 95 percent of its U.S. Treasuries. Do they know something that we don't?
#19 World financial markets are expecting that the Federal Reserve will announce a new bond-buying plan this week that will be designed to push long-term interest rates lower.
#20 If some wealthy investors believe that the Obama tax plan has a chance of getting through Congress, they may start dumping stocks before the end of this year in order to avoid getting taxed at a much higher rate in 2012.
#21 According to a study that was recently released by Merrill Lynch, the U.S. economy has an 80% chance of going into another recession.
When financial markets get really jumpy like this, all it takes is one really big spark to set the dominoes in motion.
Hopefully nothing really big will happen in October.
Hopefully global financial markets will not experience a nervous breakdown.
But right now things look a little bit more like 2008 every single day.
None of the problems that caused the financial crisis of 2008 have been fixed, and the world financial system is more vulnerable today than it ever has been since the end of World War II.
As I wrote about yesterday, the U.S. economy has never really recovered from the last financial crisis.
If we see another major financial crash in the coming months, the consequences would be absolutely devastating.
We have been softened up and we are ready for the knockout blow.
Let's just hope that the financial world can keep it together.
We don't need more economic pain right about now.
Silver traded below $33 this morning for the forst time since the lows in May and June.
It might be time to start cashing in bear ETFs and slowly begin buying physical silver (or gold if you’ve $$$$).
Likely there is more money to be made betting against stocks, but i’m less sure there is more silver downside.
$32 Silver lasted only a few hours before it headed down to bounce off of $30.
Gonna tiptoe in and buy some here. Was really expecting an earlier and stronger bounce. Since i’ve proven the bottom is unknown by me, i’ll continue to buy a little at a time.
It is a logical mention that- “According to CNN, the number of bets against the S&P 500 rose to the highest level in a year last month.” Falling of GDP by a further 7.3% has made this prediction more possible. I also understand the condition of Italy and Greece.For China break up of foreign exchange forwards and swaps trading with several European banks has made the prediction more strong. So all the signs are really very logical, and i am looking for the final result.
Times are going to continue to get harder and harder.
I agree. No end really in sight regarding this mess.
All the big players have made their money by abusing power. Governments are all leveraged to the hilt. Now we all suffer for their egos and greed.
Someone help me here. If you have gold in your possession and go to sell it they pay you 50 percent of what its worth. If you own it on paper and the shit hits the real fan youve got nothing. I think I will just buy bullets.
It is good to have ammo, but how much value in ammo can you carry? It is also good to have water, food, fuel, guns, gas, medical, and many other supplies. IMHO most of these things should be in place before considering gold and silver purchases, unless the dollar is crumbling faster than lately.
What to do when your storage space is full? If you must leave, how much can you take? You have cash out of the bank, but now it is losing value rapidly? In answer, consider gold and silver.
In my area, there are reputable coin dealers. Depending on market action, transaction premiums range from 0-10% on popular coins. Obviously this is a cost to minimize. If there are no reasonable coin dealers in your area, and no barter network that accepts gold and silver, then this might not work for you.
Gold has three values to me. First it is a hedge in case the dollar goes hyper. Second, one can carry quite a bit of value per weight and space. Third, if you bury some for your grandchildren, it might be worth something by the time they get it; likely a lot more than dollars. Silver is bulky, but can be used for change in scenario one, and might be useful in some communities for barter.
Lastly, gold and silver, like cash, present security risk. Access to safe deposit boxes might be restricted in a crises. The government could require turn in of gold and silver at arbitrary prices. Someone could steal your coin dealer’s customer list and come “prospecting”. Keeping PMs at home could be dangerous, and good metal detectors are widely available, so plan accordingly.
Fools buy gold. Wise grow food.
Who cares what the gold price is?
1kg of food to cost 1kg of gold.
If everyone is wise enough, then forget gold altogether. Everyone grow food. Imagine FREE fresh organic food wherever we are!
We have a choice:
Everybody photocopy money or make everything FREE.
http://selangormydreamstate.blogspot.com/
no, its 1kg of food for 1kg of paper money!but thats what i hope everyone will do is grow a garden
Pat: A little education, please:
What happened when FDR issued an executive order making it illegal for private citizens to own gold? Did the government make any attempt to seize privately-owned gold?
Marilynn the US gov. did not go out looking for owners of gold, many people did not turn it in. But, it is suspected that this time they may make it illegal to buy or sell gold, so everything will have to be done on the black market. A few countries have already made stides to forbid the ownship of gold. They have to stop people from wanting gold and silver to make the dollar look good. Listen to Celente, he is a pro at predictions and in gold.
All you need to know is now points 1 & 2 affect the market. By assuming that the majority of people know what is going to happen in the future and acting on that information is a sure way to the poor house.
1&2 are called investor sentiment and has long been used as a inverse indicator. When the majority but it is close to the selling zone. When the majority are calling the market short it is close to the buy point.
Yes I believe we are in big trouble and I have called the market top, but this kind of sentiment tells me to expect a bounce before the next leg down, and that bounce will be painful for those who are betting on the fall.
this is a sure sign of the endtime because the Bible already have it spelt out in Matthwew 24 prophetically that it will happen. Let us all return back to the kingdom investment because there when men shall be saying there is a casting down, the princes and emperors will be saying there is a lifting up. Jesus is the answer
Yes, Pastor Moses is on the money (excuse the pun) here…Be sure your spiritual house is in order. And the order is: Seek first the Kingdom of God (includes God) and all these things will be added to you (worldly things like money/needs met, etc.)