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Black Friday: Shocking Brexit Vote Result Causes The 9th Largest Stock Market Crash In U.S. History

Brexit Vote - Public DomainHas the next Lehman Brothers moment arrived?  Late Thursday night we learned that the British people had voted to leave the European Union, and this could be the “trigger event” that unleashes great financial panic all over the planet.  Of course stocks have already been crashing all over the globe over the past year, but up until now we had not seen the kind of stark fear that the crash of 2008 created following the collapse of Lehman Brothers.  The British people are certainly to be congratulated for choosing to leave the tyrannical EU, and if I could have voted I would have voted to “leave” as well.  But just as I warned 10 days ago, choosing to leave will “throw the entire continent into a state of economic and financial chaos”.  And “Black Friday” was just the beginning – the pain from this event is going to continue to be felt for months to come.

The shocking outcome of the Brexit vote caught financial markets completely off guard, and the carnage that we witnessed on Friday was absolutely staggering…

-The Dow Jones Industrial Average plunged 610 points, and this represented the 9th largest one day stock market crash in the history of the Dow.

-The Nasdaq was hit even harder than the Dow.  It declined 4.12 percent which was the biggest one day decline since 2011.

-Overall, Black Friday erased approximately 800 billion dollars of stock market wealth in the United States.

-Thursday was the worst day ever for the British pound, and investors were stunned to see it collapse to a 31 year low.

-Friday was the worst day ever for European banking stocks.

-Friday was the worst day for Italian stocks since 1997.

-Friday was the worst day for Spanish stocks since 1987.

-Japan experienced tremendous chaos as well.  The Nikkei fell an astounding 1286 points, and this was the biggest drop that we have seen in more than 16 years.

-Banking stocks all over the planet got absolutely pummeled on Black Friday.  The following comes from USA Today…

Stocks of some British-based banks suffered double-digit losses in heavy U.S. trading. Barclays (BCS) shares plunged 20.48% to close at $8.89. HSBC (HSBC) shares closed down 9.04% at $30.68. And shares of Royal Bank of Scotland (RBS) plummeted 27.5% to a $5.43 close.

Top U.S. banks also suffered from the Brexit fallout, although not as badly as their British counterparts.

Shares of JPMorgan Chase (JPM) closed down 6.95% at $59.60. Bank of America (BAC) shares fell 7.41% to a $13 close. Citigroup (C) shares dropped 9.36% to close at $40.30. And Wells Fargo (WFC) closed 4.59% lower at $45.71.

-Friday was the best day for gold since the collapse of Lehman Brothers.

-George Soros made a killing on Black Friday because he had already positioned his company to greatly benefit from the Brexit vote ahead of time.

But please don’t think that “Black Friday” was just a one day thing.  As I warned before, the Brexit vote “could be the trigger that changes everything“.  And if you don’t believe me on this, perhaps you will listen to former Federal Reserve Chairman Alan Greenspan.  This is what he told CNBC on Friday…

“This is the worst period, I recall since I’ve been in public service,” Greenspan said on “Squawk on the Street.”

“There’s nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away.”

I completely agree with Greenspan on this point.  This “corrosive effect” on global markets is not going to go away any time soon.  Sure there will be days when the markets are green just like there were after the collapse of Lehman Brothers, but overall the trend will be down.

Now that the United Kingdom has decided to leave the EU, financial markets have been gripped by fear and uncertainty, and there is a great deal of concern that this Brexit “could harm the economies of everyone involved”…

Important British trading partners — including India and China — indicated they were worried that an exit would create regulatory and political volatility that could harm the economies of everyone involved.

The U.K.’s Treasury itself reported that its analysis showed the nation “would be permanently poorer” if it left the EU and adopted any of a number of likely alternatives. “Productivity and GDP per person would be lower in all these alternative scenarios, as the costs would substantially outweigh any potential benefit of leaving the EU,” a summary of the report said.

This threat even extends to the United States.  CNN just published an article that lists four ways the U.S. could be significantly affected by all of this…

1. Fears that the EU may be falling apart
2. Volatile markets slow down the engine of U.S. growth
3. Brexit triggers a strong dollar, which hurts U.S. trade
4. Brexit forces the Fed to rewrite its rate hike playbook

Fortunately we are now heading into the weekend, and that might have a calming effect on the markets.

Or it might just cause financial tension to build up to an extremely high level which will subsequently be released on Monday morning.

We shall see.

RCB’s Charlie McElligott is warning that Black Friday was just the beginning and that “today is the appetizer for Monday”.

And UBS derivatives strategist Rebecca Cheong says that we could see more than a hundred billion dollars of selling over the next two to three trading days…

Strategies designed to mitigate risk will actually add to downward pressure in the S&P 500 over the next week as computerized selling ramps up to keep pace with falling prices. It reminds Cheong of the rapid stock selling that roiled markets in August, when the S&P 500 fell 11 percent to a 10-month low while facing similar behavior from algorithmic traders.

“The bigger the down move today, the more they have to sell, which would basically create a vicious cycle,” Cheong, head of Americas equity derivatives strategy at UBS, said in a phone interview. “We’ll see front-loaded selling in the range of $100 billion to $150 billion over the next two to three days. It could be very similar to August in terms of model-based selling.”

Personally, I am hoping for calm when the markets open on Monday.  But without a doubt, something has now shifted as a result of this Brexit vote, and things have suddenly become a whole lot more serious.

So what do you believe we will see happen next week?

Please feel free to tell us what you think by posting a comment below…

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

The Numbers Say That A Major Global Recession Has Already Begun

Global - Public DomainThe biggest bank in the western world has just come out and declared that the global economy is “already in a recession”.  According to British banking giant HSBC, global trade is down 8.4 percent so far this year, and global GDP expressed in U.S. dollars is down 3.4 percent.  So those that are waiting for the next worldwide economic recession to begin can stop waiting.  It is officially here.  As you will see below, money is fleeing emerging markets at a blistering pace, major global banks are stuck with huge loans that will never be repaid, and it looks like a very significant worldwide credit crunch has begun.  Just a few days ago, I explained that the IMF, the UN, the BIS And Citibank were all warning that a major economic crisis could be imminent.  They aren’t just making this stuff up out of thin air, but most Americans still seem to believe that everything is going to be just fine.  The level of blind faith in the system that most people are demonstrating right now is absolutely astounding.

The numbers say that the global economy has not been in this bad shape since the devastating recession that shook the world in 2008 and 2009.  According to HSBC, “we are already in a dollar recession”…

Global trade is also declining at an alarming pace. According to the latest data available in June the year on year change is -8.4%. To find periods of equivalent declines we only really find recessionary periods. This is an interesting point. On one metric we are already in a recession. As can be seen in Chart 3 on the following page, global GDP expressed in US dollars is already negative to the tune of USD 1,37trn or -3.4%. That is, we are already in a dollar recession. 

Here is the chart that Zero Hedge posted along with the quote above.  As you can see, the only time global GDP expressed in U.S. dollars has fallen faster in recent years was during the horrible recession of seven years ago…

HSBC Chart

But there are still a whole lot of incredibly clueless people running around out there claiming that “nothing is happening” even though more signs of trouble are erupting all around us every single day.

For instance, just today CNBC published an article entitled “The US is closer to deflation than you think“, and Twitter just announced that it plans to lay off 8 percent of its entire workforce.

But of course the biggest problems are happening in “emerging markets” right now.  The following is an excerpt from an article that was just published in a major British news source entitled “The world economic order is collapsing and this time there seems no way out“…

Now act three is beginning, but in countries much less able to devise measures to stop financial contagion and whose banks are more precarious. For global finance next flooded the so-called emerging market economies (EMEs), countries such as Turkey, Brazil, Malaysia, China, all riding high on sky-high commodity prices as the China boom, itself fuelled by wild lending, seemed never-ending. China manufactured more cement from 2010-13 than the US had produced over the entire 20th century. It could not last and so it is proving.

China’s banks are, in effect, bust: few of the vast loans they have made can ever be repaid, so they cannot now lend at the rate needed to sustain China’s once super-high but illusory growth rates. China’s real growth is now below that of the Mao years: the economic crisis will spawn a crisis of legitimacy for the deeply corrupt communist party. Commodity prices have crashed.

Money is flooding out of the EMEs, leaving overborrowed companies, indebted households and stricken banks, but EMEs do not have institutions such as the Federal Reserve or European Central Bank to knock up rescue packages. Yet these nations now account for more than half of global GDP. Small wonder the IMF is worried.

It is one thing for The Economic Collapse Blog to warn that “the world economic order is collapsing”, but this is one of the biggest newspapers in the UK.

I was writing about these emerging market problems back in July, but at that time very few really understood the true gravity of the situation.  But now giant banks such as Goldman Sachs are calling this the third stage of the ongoing global financial crisis.  The following comes from a recent CNBC piece entitled “Is EM turmoil the third wave of the financial crisis? Goldman thinks so“…

Emerging markets aren’t just suffering through another market rout—it’s a third wave of the global financial crisis, Goldman Sachs said.

“Increased uncertainty about the fallout from weaker emerging market economies, lower commodity prices and potentially higher U.S. interest rates are raising fresh concerns about the sustainability of asset price rises, marking a new wave in the Global Financial Crisis,” Goldman said in a note dated last week.

The emerging market wave, coinciding with the collapse in commodity prices, follows the U.S. stage, which marked the fallout from the housing crash, and the European stage, when the U.S. crisis spread to the continent’s sovereign debt, the bank said.

You know that it is late in the game when Goldman Sachs starts sounding exactly like The Economic Collapse Blog.  I have been warning about a “series of waves” for years.

When will people wake up?

What is it going to take?

The crisis is happening right now.

Of course many Americans will refuse to acknowledge what is going on until the Dow Jones Industrial Average collapses by several thousand more points.  And that is coming.  But let us all hope that day is delayed for as long as possible, because all of our lives will become much crazier once that happens.

And the truth is that many Americans do understand that bad times are on the horizon.  Just check out the following numbers that were recently reported by CNBC…

The CNBC All-America Economic Survey finds views on the current state of the economy about stable, with 23 percent saying it is good or excellent and 42 percent judging it as fair. About a third say the economy is poor, up 3 points from the June survey.

But the percentage of Americans who believe the economy will get worse rose 6 points to 32 percent, the highest level since the government shutdown in 2013. And just 22 percent believe the economy will get better, 2 points lower than June and the lowest level since 2008, when the nation was gripped by recession.

If you want to believe that everything is going to be just fine somehow, then go ahead and believe that.

All I can do is present the facts.  For months I have been warning about this financial crisis, and now it is playing out as a slow-motion train wreck right in front of our eyes.

We are moving into a period of time during which events are going to start to move much more rapidly, and life as we know it is about to change in a major way for all of us.

Hopefully you have already been preparing for what is about to come.

If not, I wouldn’t want to be in your position.

Vote YES On Scottish Independence – Scotland Finally Has A Chance To Get Free From The British

Scottish FlagScottish voters finally have the opportunity to fulfill William Wallace’s dream of a Scotland that is free and independent of England forever.  All they have to do is vote yes next week.  Without a doubt, a divorce from the British would be quite messy, and life would probably be more comfortable in the short-term if Scotland remains part of the United Kingdom.  But hopefully the people of Scotland are looking beyond short-term concerns.  Today, the United Kingdom is a horribly repressive Big Brother police state that is dominated by bureaucratic control freaks.  You can hardly even sneeze without violating some kind of law, rule or regulation.  And the London banking establishment is at the very heart of the debt-based global financial system which is enslaving so much of the planet.  Scotland finally has a chance to get free from all of this.  All it is going to take is a yes vote on Scottish independence.

It looks like it is going to be an incredibly close vote.  Recent polls show that the result could go either way.  Needless to say, this is causing the British establishment to freak out quite a bit.

For example, a couple of large banks have attempted to sway the vote during this past week by publicly declaring that they will have to move to England if the vote for Scottish independence is successful…

The Royal Bank of Scotland announced Thursday that it is making contingency plans to move its legal incorporation to England in the event of a “yes” vote. In addition, Lloyds Banking Group said it had made arrangements to establish “new legal entities” in England should voters in Scotland decide to sever ties with Britain.

And there have been lots of other warnings of “economic disaster” for Scotland if it does not remain part of the United Kingdom…

Standard Life, the pensions company, disclosed that it was planning to move part of its business to England to protect its customers, while BP and Shell backed expert predictions that North Sea oil will have all but run out by 2050. It also emerged that nearly $2-billion has flowed out of U.K. equity funds in the past two months amid heightened uncertainty over what separation would mean for the economy.

Honestly, it is probably true that there would be some short-term economic disruptions for Scotland.

But in the long run the Scottish would probably be in quite good shape considering how much of the North Sea oil they would own.  Just check out the following excerpt from a recent Bloomberg article…

The discovery of North Sea riches in the 1970s planted the seed of modern-day Scottish nationalism as supporters of independence cried “It’s our oil!”

Four decades later, nothing will be more important to the economic future of Scotland than the oil industry should the country vote to end the 307-year union with the rest of the U.K.

Reserves of oil and gas would be split, possibly along the so-called median line, already used to allocate fishing rights. The division would hand the Scots about 96 percent of annual oil production and 47 percent of the gas, according to estimates for 2012 by the University of Aberdeen’s Alex Kemp and Linda Stephen cited by the Scottish government.

What most British politicians won’t tell you is that it would probably be the British that would suffer the most economically in the short-term and in the long-term.

In fact, if there is a yes vote for Scottish independence it is being projected that the value of the British pound will fall substantially and we could see a “negative shock” in British financial markets…

Adam Memon, the head of economic research at the Centre for Policy Studies, said: “The principal immediate threat would be to sterling and the stability of the financial markets. The recent selloff is a mere warning of what may come if the Scots actually do vote for independence.”

Threadneedle Investments said: “Given the constitutional and economic uncertainties attached to a potential break-up of the UK, a vote for independence would be likely to deliver a negative shock to UK financial assets and lead to meaningful currency weakness.”

And actually, the Scottish are not going nearly far enough with this vote for independence.  For example, according to Yes Scotland a newly-independent Scottish government would continue to have allegiance to the Queen…

The Scottish Government’s proposal is that the Queen remains Head of State in Scotland, in the same way as she is currently Head of State in independent nations such as Canada, Australia and New Zealand.

This would be the position for as long as the people of Scotland wished our country to remain a monarchy.

Speaking as an American, let me say that getting rid of the British monarchy has worked out exceptionally well for us.

Hopefully the Scottish people will make a similar decision sooner rather than later.

If Scotland does indeed end up voting for independence, it could give momentum to similar movements all over Europe.

Just this week, hundreds of thousands of Catalans took to the streets in Barcelona to demand the right to vote on independence from Spain…

Thousands of Catalans have rallied in Barcelona, Spain, demanding the right to hold a referendum on independence.

Participants, waving Catalan flags and wearing the flag’s red and yellow colours, stood in a V-shape formation, indicating their desire for a vote.

Protesters were energised by Scotland’s forthcoming independence referendum – and many also waved the Scottish flag.

The regional government has called a referendum for 9 November. The Spanish government says the vote is illegal.

Could we end up seeing a number of new nations emerging from the chaos that is about to engulf Europe?

This is clearly not what the establishment wants.  In fact, George Soros says that “this is the worst possible time” for Scottish independence.

That alone is a really good reason to vote yes.

Personally, I am rooting for the Scottish people on this one.  I truly hope that they are finally able to win their freedom.

The people of Scotland have been pushed around by the British for centuries.

Now they finally have a chance to stand up to the tyranny of London.

They finally have a chance to get free.

Let us hope that they take it.