This Is For The ‘Nothing Is Happening’ Crowd…

Wake Up - Public DomainA lot of people out there expected something to happen in September that did not ultimately happen.  There were all kinds of wild theories floating around, and many of them had no basis in reality whatsoever.  But without a doubt, some very important things did happen in September.  As I warned about ahead of time, we are witnessing the most significant global financial meltdown since the end of 2008.  All of the largest stock markets in the world are crashing simultaneously, and so far the amount of wealth that has been wiped out worldwide is in excess of 5 trillion dollars.  In addition to stocks, junk bonds are also crashing, and Bank of America says that it is a “slow moving trainwreck that seems to be accelerating“.  Thanks to the commodity price crash, many of the largest commodity traders on the planet are now imploding.  I wrote about the death spiral that has gripped Glencore yesterday.  On Tuesday, the stock price of the largest commodity trader in Asia, the Noble Group, plummeted like a rock and commodity trading giant Trafigura appears to be in worse shape than either Glencore or the Noble Group.  The total collapse of any of them could easily be a bigger event than the implosion of Lehman Brothers in 2008.  So I honestly do not understand the “nothing is happening” crowd.  It takes ignorance on an almost unbelievable level to try to claim that “nothing is happening” in the financial world right now.

Within the last 60 days, we have seen some things happen that we have never seen before.

For example, did you know that we witnessed the greatest intraday stock market crash in U.S. history on August 24th?

During that day, the Dow Jones Industrial Average plunged from a high of 16,459.75 to a low of 15,370.33 before rebounding substantially. That intraday point swing of 1,089 points was the largest in all of U.S. history.

Overall, the Dow has down 588.40 points that day.  When you combine that decline with the 530.94 point plunge from the previous Friday, you get a total drop of 1119.34 points over two consecutive trading days.  Never before in history had the Dow fallen by more than 500 points on two trading days in a row.  If that entire decline had fallen within one trading day, it would have been the largest stock market crash in U.S. history by a very wide margin, and everyone would be running around saying that author Jonathan Cahn was right again.

But because this massive decline fell over two consecutive trading days that somehow makes him wrong?

Are you kidding me?

Come on people – let’s use some common sense here.  We are already witnessing the greatest global stock market decline in seven years, and after a brief lull things are starting to accelerate once again.  Last night, stocks in Hong Kong were down 629 points and stocks in Japan were down 714 points.  In the U.S., the Nasdaq has had a string of down days recently, and the “death cross” that has just formed has many investors extremely concerned

The Nasdaq composite spooked investors on Monday after forming a death cross, a trading pattern that shows a decline in short-term momentum and is often a precursor to future losses.

A death cross occurs when the short-term moving average of a security or an index pierces below the long-term trend, in this case the 50-day moving average breaking through the 200-day moving average.

In the past month, similar chart patterns formed in the S&P 500, Dow and small-cap Russell 2000, but the Nasdaq avoided a death cross formation until Monday.

What we witnessed in September was not “the end” of anything.

Instead, it is just the beginning.

And if you listen carefully, some of the biggest names on Wall Street are issuing some very ominous warnings about what is coming.  For instance, just consider what Carl Icahn is saying

Danger ahead—that’s the warning from Carl Icahn in a video coming Tuesday.

The activist says low rates caused bubbles in art, real estate and high-yield bonds—with potentially dramatic consequences.

“It’s like giving somebody medicine and this medicine is being given and given and given and we don’t know what’s going to happen – you don’t know how bad it’s going to be. We do know when we did it a few years ago it caused a catastrophe, it caused ’08. Where do you draw the line?”

Even people like Jim Cramer are starting to freak out.  He recently told his audience that “we have a first-class bear market going”

Jim Cramer, the ex-hedge fund manager and host of CNBC’s show “Mad Money,” has been vocal recently on air, saying repeatedly that he doesn’t like the market now, and last week said “we have a first-class bear market going.” Similarly, Gary Kaltbaum, president of Kaltbaum Capital Management, has been sending out notes to clients and this newspaper for weeks, saying the poor price action of the stock market and many hard-hit sectors, such as energy and the recently clobbered biotech sector, has all the earmarks of a bear market. Over the weekend, Kaltbaum said: “We remain in a worldwide bear market for stocks.”

As I have warned repeatedly, there will continue to be ups and downs.  The stock market is not going to fall every day.  In fact, on some days stocks will absolutely soar.

But without a doubt, we have entered the period of time that I have warned about for so long.  The global financial system is now beginning to unravel, and any piece of major bad news will likely accelerate things.

For instance, the total collapse of Deutsche Bank, Petrobras, Glencore, the Noble Group, Trafigura or any of a number of other major financial institutions that I am currently watching could create mass panic on the global financial stage.

In addition, an unexpected natural disaster that hits a financially important major city or a massive terror attack in the western world are other examples of things that could accelerate this process.

Our world is becoming increasingly unstable, and we all need to learn to expect the unexpected.

The period of relative peace and security that we all have been enjoying for so long is ending, and now chaos is going to reign for a time.

So get prepared while you still can, because there is very little time remaining to do so…

Now Is The Time – Fear Rises As Financial Markets All Over The Planet Start To Crash

Fear - Public DomainCan you feel the panic in the air?  CNN Money’s Fear & Greed Index measures the amount of fear in the financial world on a scale from 0 to 100.  The closer it is to zero, the higher the level of fear.  Last Monday, the index was sitting at a reading of 36.  As I write this article, it has fallen to 7.  The financial turmoil which began last week is threatening to turn into an avalanche. On Sunday night, we witnessed the second largest one day stock market collapse in China ever, and this pushed stocks all over the planet into the red.  Meanwhile, the twin blades of an emerging market currency crisis and a commodity price crash are chewing up economies that are dependent on the export of natural resources all over the globe.  For a long time, I have been warning about what would happen in the second half of 2015, and now it is here.  The following is a summary of the financial carnage that we have seen over the past 24 hours…

-On Sunday night, the Shanghai Composite Index plunged 8.5 percent.  It was the largest one day stock market crash in China since 2007, and it was the second largest in history.  The Chinese government is promising to directly intervene in order to prevent Chinese stocks from going down even more.

-Over 1,500 stocks in China fell by their 10 percent daily maximum.  This list includes giants such as China Unicom, Bank of Communications and PetroChina.

-Ever since peaking in June, the Shanghai Composite Index has dropped by a total of 28 percent.

-Even Chinese stocks that are listed on U.S. stock exchanges are being absolutely hammered.  The following comes from USA Today

The 144 China-based stocks with primary listings on major U.S. exchanges have erased nearly $40 billion in paper wealth since the Shanghai Composite index peaked on June 12. It’s an enormous destruction of wealth that in effects wipes out the market value of a company the size of cruise ship operator Carnival.

-The Chinese stock market crash pushed European stocks significantly lower on Monday…

The pan-European FTSEurofirst 300 provisionally closed 2.1 percent lower, while the Germany’s DAX and France’s CAC closed respectively 2.4 percent and 2.5 percent lower.

The U.K.’s benchmark FTSE outperformed its euro zone peers, but still closed unofficially down 1.0 percent.

-Overall, European stocks have been falling steadily since the beginning of last week.  To get an idea of how much damage has been done already, just check out this chart.

-As I mentioned above, an emerging market currency crisis is causing havoc for economies all over the planet.  The following comes from an article that was published by the Telegraph

The currencies of Brazil, Mexico, South Africa and Turkey have all crashed to multi-year lows as investors flee emerging markets and commodity prices crumble.

The drastic moves came as fears of imminent monetary tightening by the US Federal Reserve combined with shockingly weak figures from China, which stoked fears that the country may be sliding into a deeper downturn and sent tremors through East Asia, Latin America and Africa.

-The government of Puerto Rico has announced that it does not have enough cash to make a scheduled debt payment of 169 million dollars on August 1st.  The Obama administration says that there are no plans in the works to bail out Puerto Rico.

-On Monday, the Dow was down another 127 points.  It was the fifth day in a row that the Dow and the S&P 500 have both declined.

-Overall, the Dow is now down more than 650 points since July 20th.

-480 stocks on the New York Stock Exchange have hit new 52-week lows.  Many analysts consider this to be a very, very ominous sign.

-I have repeatedly written about the danger of the commodity collapse that we are currently witnessing, and the Bloomberg Commodity Index fell another 1.22 percent on Monday to a fresh low of 92.1493.

-On Monday, the price of U.S. oil hit a 52-week low of $46.92.

-So far, the price of U.S. oil has fallen about 20 percent this month.

-Back in June 2014, the price of a barrel of West Texas Intermediate crude was above 107 dollars.  Since then, the price of U.S. oil has fallen an astounding 56 percent.

-Thanks in large part to the collapse in energy prices, junk bonds are cratering.  This is something that happened just before the financial crisis of 2008, and now it is happening again.  The following comes from Wolf Street

Among the bonds: Cliffs Natural Resources down 27.6%, SandBridge down 30%, Murray Energy down 21.2%, and Linn Energy down 22.3%, according to Bloomberg.

For example, Linn Energy 6.25% notes due in 2019 were trading at 78 cents on the dollar at the beginning of July and at 58 on Friday, according to LCD. There was bloodshed beyond energy, such as AK Steel’s 7.625% notes due in 2021. They were trading at 62 cents on the dollar, down 22% from the beginning of July.

“The performance is a disappointment to investors who purchased about $40 billion of junk-rated bonds from energy companies this year, thinking that the worst of the slump was over,” Bloomberg noted.

This is exactly what we would expect to see during the early stages of a financial crisis.

Of course global financial markets may bounce back somewhat tomorrow.  If you will remember, some of the largest one day gains in stock market history happened right in the middle of the stock market collapse of 2008.  So don’t get fooled by what happens on any one particular day.

With so much fear in the air, literally anything could happen in the weeks and months ahead of us.  One month ago, I issued a red alert for the last six months of this year.  I warned that a major financial crisis was imminent and that people needed to start protecting themselves immediately.

As I write this article on Monday evening, financial markets are already opening up over in Asia.  Japanese stocks are already down 251 points even though the market has only been open for about an hour over there.

We have entered a time when what is happening to global stock markets will once again be headline news.  We are right on the precipice of another great financial crisis, only this one is going to ultimately end up being much worse than the last one.

Now is the time.

Please get prepared while you still can.

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