The Dow Has Already Fallen Nearly 900 Points From The Peak Of The Market

Financial Crisis Stocks - Public DomainIn an eerie repeat of what we witnessed in 2008, U.S. stocks are steadily sliding throughout the summer as we head toward the month of September.  From August 1st, 2008 to September 1st, 2008 the Dow fell by nearly 700 points.  And of course we all remember what happened the following month.  Right now, we are watching a similar thing happen.  The Dow has plummeted nearly 700 points since July 16th, and it is down nearly 900 points from the peak of the market back in May.  At this point the Dow has now fallen for six days in a row and eleven of the last thirteen.  Of course most of the talking heads on television are still insisting that everything is going to be just fine and that a repeat of 2008 is not possible.  So what do you think?  Should we trust them?

Personally, I find that I put a lot more faith in cold, hard numbers than in what the talking heads on television have to say.  And at this moment, the cold, hard numbers are telling us that another financial crisis in imminent.

This is one of the reasons why I am such a fan of Zero Hedge.  Nobody stays on top of the hard financial numbers like Zero Hedge does.  And according to Zero Hedge, market internals are absolutely screaming that a U.S. stock market crash is right around the corner

In early 2007, market internals began to weaken dramatically. Talking heads and asset gatherers said fears were overblown, risk was contained, Fed has it under control, stay the course. Six months later, the equity markets began to collapse and then accelerated lower. Today, in an eery case of deja vu all over again, it has been six months now since US equity market internals began to decouple from the manipulated index levels that manufacture wealth and happiness across America… what would you do?

Here is the chart that immediately followed that paragraph.  As you can see, we are repeating the exact same pattern that we witnessed back during the last financial crisis…

Internals - Zero Hedge chart

Meanwhile, the second largest stock market in the world is already crashing.  The Chinese have spent approximately 1.3 trillion dollars propping up stocks in China, but they just continue to fall.  They were down again on Wednesday night, and nobody is quite sure when the carnage is going to end.

And remember, Chinese stocks started to crash before U.S. stocks did in 2008 as well.

Another eerie similarity to 2008 is the behavior of oil.  In the summer of 2008, the price of oil crashed hard, and then a stock crash followed a couple of months later.

Well, guess what?

The price of oil is crashing hard once again.  The following comes from CNBC

Oil set multi-month lows on Thursday as investors and traders sought clues about the market’s next bottom after a large drop in U.S. crude inventories failed to boost prices.

A bigger-than-expected build in U.S. gasoline stockpiles last week proved more important to investors than crude storage numbers that came in three times below forecast on Wednesday.

U.S. crude was down 50 cents at $44.65 a barrel at 1:30 p.m. EDT (1730 GMT), after touching a 4½ month bottom at $44.20.

Why can’t more people see the signs?

They are so obvious.

We are also getting indications that the real economy is starting to be affected by all of this chaos.  The mainstream media has been very quiet about this, but the number of job cuts just hit a four year high

Challenger, Gray & Christmas has released its monthly job cuts for July, and it is ugly. The 105,696 job cuts was the highest number since 2011. To put this in perspective, the July job cuts total is a whopping 136% higher than the 44,842 job cuts reported in June, as well as 125% higher than the in same report a year ago.

The July report showed that the last time more than 100,000 job cuts were announced was back in September 2011, when there were some 115,730 layoffs.

Another bad trend is that July’s surge now brings the year-to-date job cuts up to a total of 393,368. That is 34% higher than the run rate for the same period in 2014.

If alarm bells are going off in your head right now, that is good, because they should be.

A 34 percent increase in job cuts is not a good thing.

Of course it would probably help if the Obama administration was not bringing in far more immigrant workers than the limits that have been officially set by Congress.  Just check out these numbers

In written responses to the Senate Judiciary Immigration and the National Interest Subcommittee Republicans obtained by Breitbart News, U.S. Citizenship and Immigration Services reveal that the Obama administration has been approving work authorizations for immigrants beyond admission limits and for some categories of immigrants that Congress never intended to work in the U.S.

Beyond those limits each year, these new and renewed work permit approvals amounted to about 1.23 million in fiscal year 2009, 1.08 million in FY 2010, 970,277 in FY 2011, 1.24 million in FY 2012, 1.68 million in FY 2013 and 1.24 million in FY 2014.

Also, this is the first time that imports and exports have both been declining on a year over year basis since the last recession.  Just check out this chart and this chart.

When imports and exports are both falling, that means that economic activity is slowing down.  And we are seeing a similar thing happen all over the planet.  At this point, global trade has fallen by a total of about 2 percent over the past six months.

Are you starting to get the picture?

Just like in the summer of 2008, global economic activity is diminishing and things in the financial world are lining up in textbook fashion for a major crisis.

But for those that are not convinced by now, there is not that much more that I can do.  I could keep throwing out numbers and charts and graphs, but if people refuse to see the truth they simply will not see it.

Less than a month from now, we will officially be in the danger zone.

September is coming, and I truly hope that you are already prepared for it.

Lindsey Williams, Martin Armstrong And Alex Jones All Warn About What Is Coming In The Fall Of 2015

Warnings - Public DomainNot since the financial crash of 2008 have so many prominent people issued such urgent warnings about a specific time period.  Almost daily now, really big names are coming out with chilling predictions about what they believe is going to happen during the second half of 2015.  But it isn’t just that these people have a “bad feeling” about things.  The truth is that we are witnessing a confluence of circumstances and events in the second half of this year that is unprecedented.  This is something that I covered in a previous article that went mega-viral all over the Internet entitled “7 Key Events That Are Going To Happen By The End Of September“.  Personally, I have never been more concerned about any period of time than I am about the second half of 2015.  And as you will see below, I am definitely not alone.

Just a few days ago, I received an email that contained a chilling message from Lindsey Williams.  You can view the same message that came to my email right here.  According to Lindsey Williams, the elite insider that he is in contact with told him that there will be a global financial collapse between September and December of this year…

WARNING!

From Lindsey Williams: I just received an email from my Elite friend.

My Elite friend indicated that they have a World Wide Financial Collapse scheduled between September and the end of December 2015

You may have just THREE (3) months to prepare!

I have a ton of respect for Lindsey Williams, and I would listen to what he has to say very carefully.  Back in 2008, an elite insider told him that the price of oil would drop from $140 a barrel to $40 a barrel, and it happened.  This time around, Williams has been telling us throughout 2013 and 2014 that a global financial collapse was not going to happen during those years, and he was right about that.

But now he is sounding the alarm that one is going to come by the end of this calendar year.

Martin Armstrong is someone else that has been sounding the alarm about the second half of this year.

In fact, Armstrong says that he has “warned that the Big Bang was coming 2015.75” since 1985.

In the past, I have written entire articles about economic cycle theories and what they indicate is coming in our future.

Armstrong has developed one of his own, and he calls it the Economic Confidence Model.  According to the ECM, the “sovereign debt Big Bang” is scheduled to happen by the end of 2015.  And it turns out that the time period that Armstrong has been pointing to lines up with a whole bunch of other significant events as well

There are many aspects that are lining up with the turn in the ECM (Economic Confidence Model) from the Blood Moon and the Jewish Year for forgiving the debts, to France imposing restrictions on cash in September, and even in Germany the laws that protected about half a million people so-called dachas there in East Germany expire. To date, a law protecting the tenant against dismissal by the municipality will also expire October 3, 2015. Everywhere we look, there are changes coming to a head, right down to the U.S. Federal budget with 2015.75.

In case you are tempted to dismiss this as nonsense, Armstrong has pointed out that his ECM has been accurate “to the day” in the past

Of course the 1987 crash bottomed to the day with the ECM confirming that was the low. The same took place in 1994 where the U.S. share market bottomed right to the day, once again confirming this was an important low.

So will the ECM be right again this time?

Only time will tell, but it should be noted that the global bond market is already starting to crash.  If Armstrong ultimately turns out to be correct, we could be on the verge of a major turning point

This next turning point should be the peak in the concentration of capital and confidence in government. From there on out, 2015.75 should mark the change in trend where people will start to disbelieve government on a grand scale. The debt markets that peak precisely with the target are going to get the worst of it.

Other financial experts are issuing similar warnings, even if they aren’t being quite as specific.

For example, just consider what Jim Rogers had to say recently…

I suspect in the next year or two we will see some kind of major, major problems in the world financial markets.

I would suspect when we have this correction, it’s going to cause central banks to panic. There’s going to come a time when there is not much the central banks can do when they have lost all credibility. When governments have lost all credibility. They will print and spend and borrow, but there comes a time when people are just going to say We don’t want to play this game anymore. And at that point, the world has serious, serious problems because there’s nothing to rescue us.

Perhaps the most sobering warning of all that I have come across in recent days is from Alex Jones.

In the video posted below, he explains that he recently received “two different calls” from “extremely prominent wealthy people” warning him about what is coming by the end of this year and asking him why he isn’t leaving the United States “before October”.

In other words, these individuals believe that something really big is going to happen by the end of September.  This dovetails perfectly with what I have already been warning about.

In this video, Alex also explains that large numbers of insiders are now quietly leaving the country.  I have never seen him quite like this.  I think that so many of us are just in shock that the things that we have been warning about for so long are now actually happening.  Watch this video for yourself and see what you think…

In the financial markets, we are also seeing signals that many people believe that big trouble is right around the corner.  For instance, according to Dana Lyons we haven’t seen bets that the VIX will rise at this level since just before the financial crash of 2008…

As most observers are aware, the VIX tends to rise as the stock market declines. Thus a rising VIX is associated with bad markets. The interesting thing about present conditions in VIX options is that the Put/Call Ratio (using a 21-day average) is at the lowest level since the summer of 2008. That means that there are more bets on a rising VIX versus bets on a falling VIX than we have seen in 7 years. And again, a rising VIX is associated with bad markets.

In other words, investors are betting a tremendous amount of money that we are going to see a rise in volatility in the financial markets in the months ahead.  And as I have explained so many times before, during times of high volatility markets tend to go down very rapidly.  So these bets will pay off very handsomely if there is a financial crash this fall.

Meanwhile, the manager of one of the largest bond funds in the UK is warning that a “systemic event” could soon hit global financial markets and that it is wise to have some “physical cash” at home just in case there is some sort of major emergency.  The following comes from Zero Hedge

The manager of one of Britain’s biggest bond funds has urged investors to keep cash under the mattress.

Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.

“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.

The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.

This sounds like what I have been saying for years.  I am a big believer in not having all of your financial eggs in one basket, and I do believe that it is wise to have at least some emergency cash at home.

But to hear it from a member of Britain’s financial elite is definitely unusual to say the least.

Sadly, just like last time, most people are not listening to the warnings.  Back in the summer of 2008, my wife and I went up to visit her parents.  I sat on their sofa and told them that a great financial collapse was about to unfold and that it would shake the entire world.  Of course just a few months later that is exactly what happened.

Now we are on the verge of an even greater financial collapse, and still I find that there are a lot of people out there that are doubters.  Most of these doubters have an immense amount of faith in the system, and they are confident that this debt-fueled bubble of false prosperity that we are currently enjoying can somehow last indefinitely.

I truly wish that the hopeless optimists were right.

I truly wish that I could live out my days in peace and quiet in a world that was safe and stable.

Unfortunately for all of us, things are about to change in a major way.  When it starts happening, don’t forget that there have been people that have been warning you that this would happen all along.

Why Is The EU Forcing European Nations To Adopt ‘Bail-In’ Legislation By The End Of The Summer?

Question Smiley - Public DomainAre they expecting something to happen?  As you will read about below, the European Union says that any nation within the EU that does not enact “bail-in” legislation within the next two months will face legal action.  The countries that are being threatened in this manner include Italy and France.  If you fast forward two months from this moment, that puts us in early August.  So clearly the European Union wants everything to be squared away by the end of the summer.  Is there a reason for this?  Are they anticipating that something really bad will happen in September or thereafter?  Why such a rush?

We all remember what happened when major banks were “bailed out” during the last financial crisis.  A tremendous amount of taxpayer money was given to the big banks to help prop them up so they wouldn’t fail.  This greatly upset a lot of people.

Well, when the next great financial crisis hits Europe, banks are not going to get “bailed out” this time.  Instead, we are going to see “bail-ins”.

So precisely what is a “bail-in”?  Essentially, what happens is that wealth is transferred from the “stakeholders” in the bank to the bank itself in order to keep it solvent.  That means that creditors and shareholders could potentially lose everything if a major bank in Europe fails.  And if their “contributions” are not enough to save the bank, those holding private bank accounts will have to take “haircuts” just like we saw in Cyprus.  In fact, the travesty that we witnessed in Cyprus is being used as a “template” for much of the new legislation that is being enacted all over Europe.

The bottom line is that not a single bank account in the European Union will ever be truly safe again.

By this time, everyone in the EU was already supposed to have enacted “bail-in” legislation, but some countries in Europe have been dragging their feet.  So now the European Commission (the executive body of the European Union) is giving them a hard deadline.  According to Reuters, any nation that has not passed “bail-in” legislation within two months will be subject to legal action…

The European Commission on Thursday gave France, Italy and nine other EU countries two months to adopt new EU rules on propping up failed banks or face legal action.

The rules, known as the bank recovery and resolution directive (BRRD), seek to shield taxpayers from having to bail out troubled lenders, forcing creditors and shareholders to contribute to the rescue in a process known as “bail-in”.

So which countries are being threatened?

It turns out that there are 11 of them.  The following comes from Mark O’Byrne

The article “EU regulators tell 11 countries to adopt bank bail-in rules” reported how 11 countries are under pressure from the EC and had yet “to fall in line”. The countries were Bulgaria, the Czech Republic, Lithuania, Malta, Poland, Romania, Sweden, Luxembourg, the Netherlands, France and Italy.

France and Italy are two countries who are regarded as having particularly fragile banking systems.

But why only two months to get this done?

When I was in law school, I took an entire course on European Union law.  Normally, things in Europe take a very long time to get done.  It is out of character for the European Commission to rush to get something like this done so quickly.

Could they be anticipating that this legislation will need to be put into use very soon?

What we do know is that bonds in Europe have already been crashing, and it appears that the European Central Bank is starting to lose control over European financial markets.

And we also know that there has been a sustained bank run in Greece.  In fact, it is being reported that 700 million euros were pulled out of Greek banks on Friday alone.  Personally, I think that anyone that still has any money in Greek banks is absolutely insane.  Some day in the not too distant future, Greek bank account holders are going to be in for a “haircut” just like we saw in Cyprus.  The following comes from Zero Hedge

While the Greek government believes it may have won the battle, if not the war with Europe, the reality is that every additional day in which Athens does not have a funding backstop, be it the ECB (or the BRIC bank), is a day which brings the local banking system to total collapse.

As a reminder, Greek banks already depends on the ECB for some €80.7 billion in Emergency Liquidity Assistance which was about 60% of total deposits in the Greek financial system as of April 30. In other words, they are woefully insolvent and only the day to day generosity of the ECB prevents a roughly 40% forced “bail in” deposit haircut a la Cyprus.

But of course Greece will only be just the beginning.  In the end, I expect major banks to fail all over Europe as we head into the greatest financial crisis that Europe has ever seen.  Bank account holders all over the continent could end up having to take “haircuts”, and that would just make the coming deflationary cycle in Europe a lot worse.

And I actually expect events in Europe to start accelerating greatly by the end of this calendar year.  Apparently the top dogs in the European Union are also concerned about the immediate future, because they are rushing to get “bail-in” legislation passed in every nation in the EU by the end of the summer.

Fortunately, the United States has not moved in a similar direction – at least not yet.  It is always possible that during an “emergency situation” anything can happen.  We saw that in Cyprus.  But for the moment, European bank accounts appear to be more vulnerable than U.S. bank accounts.

Not that any of us should have much confidence in the major banks in the United States either.  Since the end of the last financial crisis they have become more reckless than ever.  At this point, the six largest banks in this country collectively have 278 trillion dollars of exposure to derivatives.  A day is coming when the “too big to fail” banks will actually start failing, and that will absolutely cripple our economy.

We are moving into a time of great financial instability.  During such a time, one of the keys will be to not have all of your eggs in one basket.  That way it will be more difficult for your wealth to be wiped out by a single event.

So what other advice would you give to people that are wondering how to deal with the coming global banking crisis?  Please feel free to add to the discussion by posting a comment below…

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