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Signs Of Financial Turmoil Are Brewing In Europe, China And The United States
Submitted by Michael Snyder via The Economic Collapse blog,
As we move toward the second half of 2015, signs of financial turmoil are appearing all over the globe. In Greece, a full blown bank run is happening right now. Approximately 2 billion euros were pulled out of Greek banks in just the past three days, Barclays says that capital controls are “imminent” unless a debt deal is struck, and there are reports that preparations are being made for a “bank holiday” in Greece. Meanwhile, Chinese stocks are absolutely crashing. The Shanghai Composite Index was down more than 13 percent this week alone. That was the largest one week decline since the collapse of Lehman Brothers. In the U.S., stocks aren’t crashing yet, but we just witnessed one of the largest one week outflows of capital from the bond markets that we have ever witnessed. Slowly but surely, we are starting to see the smart money head for the exits. As one Swedish fund manager put it recently, everyone wants “to avoid being caught on the wrong side of markets once the herd realizes stocks are over-valued“.
I don’t think that most people understand how serious things have gotten already. In Greece, so much money has been pulled out of the banks that the European Central Bank admits that Greek banks may not be able to open on Monday…
The European Central Bank told a meeting of euro zone finance ministers on Thursday that it was not sure if Greek banks, which have been suffering large daily deposit outflows, would be able to open on Monday, officials with knowledge of the talks said.
Greek savers have withdrawn about 2 billion euros from banks over the past three days, with outflows accelerating rapidly since talks between the government and its creditors collapsed at the weekend, banking sources told Reuters.
All over social media, people are sharing photos of long lines at Greek ATMs as ordinary citizens rush to get their cash out of the troubled banks. Here is one example…
Long queues at ATM's all around Athens center. #Greece pic.twitter.com/k4wgerQ7gP
— Elly Vintiadis (@EllyVintiadis) June 19, 2015
And if there is no debt deal by the end of this month, the Greek debt crisis is going to totally spin out of control and financial chaos will begin to erupt all over Europe. But instead of trying to be reasonable, EU president Donald Tusk “has delivered an ultimatum to Greece”, and it almost appears as if EU officials are more concerned about winning a power struggle than they are about averting financial catastrophe…
EU president Donald Tusk has delivered an ultimatum to Greece, claiming the country must ‘accept an offer or default’ at an emergency summit set for Monday – in a last-ditch effort to stop the debt-stricken nation crashing out of the euro.
‘We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default,’ Mr Tusk said today.
His comments come as Greek Prime Minister Alexis Tsipras warned that his country’s exit from the eurozone would trigger the collapse of the single currency.
‘The famous Grexit cannot be an option either for the Greeks or the European Union,’ he said in an Austrian newspaper interview.
‘This would be an irreversible step, it would be the beginning of the end of the eurozone.’
While all of this has been going on, the obscene stock market bubble in China has started to implode. Just check out the following numbers from Zero Hedge…
As the carnage began last night in China we noted the extreme levels of volatility the major indices had experienced in recent weeks. By the close, things were ugly with the broad Shanghai Composite down a stunning 13.3% on the week – the most since Lehman in 2008 (with Shenzhen slightly better at down 12.8% and CHINEXT down a record-breaking 14.99%).
Under normal circumstances, numbers like these would be reason for a full-blown financial panic over in Asia. But these are not normal times. Even with these losses, stock prices in China are still massively overinflated. For example, USA Today is reporting that the median stock over in China is “trading at 95 times earnings”…
Margin debt in China has soared to a record $363 billion, according to Bloomberg, and the median stock in mainland China is now trading at 95 times earnings, which even tops the price-to-earnings multiple of 68 back at the 2007 peak.
That is absolutely ridiculous. When a stock is trading at 25 or 30 times earnings it is overpriced. So these numbers that are coming out of China are beyond crazy, and what this means is that Chinese stocks have much, much farther to fall before they get back to any semblance of reality.
Meanwhile, in the U.S. money is flowing out of bonds at a staggering pace. The following quote originally comes from Bank of America…
“High grade credit funds suffered their biggest outflow this year, and double the previous week (and also the biggest since June 2013). High yield outflows also jumped to $1.1bn, the biggest since the start of the year. However, government bond funds suffered the most amid the recent spike in volatility, with outflows surging to the highest weekly number on record ($2.7bn). This brings the total outflow from fixed income funds to almost $6bn over the last week, the highest since the Taper Tantrum and the third highest outflow ever.”
What this means is that big trouble is brewing in the bond markets. This is something that I warned about in my previous article entitled “Experts Are Warning That The 76 Trillion Dollar Global Bond Bubble Is About To Explode“.
For the moment, U.S. stocks are doing fine. But just about everyone can see that we in a massive financial bubble that could burst at any time. Presidential candidate Donald Trump says that what we are witnessing is a “big fat economic and financial bubble like you’ve never seen before”…
Yesterday during an interview on MSNBC, presidential candidate Donald Trump said he has some big names in mind for the Treasury secretary if he wins the White House. “I’d like guys like Jack Welch. I like guys like Henry Kravis. I’d love to bring my friend Carl Icahn.” He also opined on the economy and the stock market, admitting that the Fed has benefited people like him but that the economy and is in a “big fat economic and financial bubble like you’ve never seen before.“
Ron Paul also believes that this financial bubble is going to end very badly. Just check out what he told CNBC earlier this week…
Despite record highs in the market, former Rep. Ron Paul says the Fed’s easy money policies have left stocks and bonds are on the verge of a massive collapse.
“I am utterly amazed at how the Federal Reserve can play havoc with the market,” Paul said on CNBC’s “Futures Now” referring to Thursday’s surge in stocks. The S&P 500 closed less than 1 percent off its all-time high. “I look at it as being very unstable.”
In Paul’s eyes, “the fallacy of economic planning” has created such a “horrendous bubble” in the bond market that it’s only a matter of time before the bottom falls out. And when it does, it will lead to “stock market chaos.”
Yes, this financial bubble has persisted far longer than many believed possible, but all irrational bubbles eventually burst.
And you know what they say – the bigger they come the harder they fall.
When this gigantic financial bubble finally implodes, it is going to be absolutely horrifying, and the entire planet is going to be shocked by the carnage.
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Anyone still left in this "market", must enjoy s&m.
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Fuck off.
"...Yes, this financial bubble has persisted far longer than many believed possible..."
Actually, bullion banks, the BIS and the BoE have rigged gold (and thus interest rates) far longer than many believed possilbe.
This system has operated to extract wealth from citizens just as it was designed in 1913.
Maybe so, but blowing 7000 homeless derelicts at the bus station bathroom at a dollar a throw is no way to make a living.
Those homeless must not last long.
about ninety seconds. and that's with weekends off.
don't need lunch breaks.
Seems thats to be true look at katlynn jenner mug all over the place ttp will save us all
"Anyone still left in this "market", must enjoy s&m."
You ain't fucking kidding, and we ain't talking some bullshit "50 shades" nonsense, we're talking the kind of crap that goes down at Gitmo. Gosh, looks like the market is overvalued, let's make some intelligent short plays based on fundamentals and... oh joy, the Fed comes in, buys the entire board, and everything goes up and up. Yay and stuff.
In all seriousness, are there any bears still alive out there, or have they all been pretty much wiped out by now?
Duh, this is news?
"signs"...u gotta be kidding me.
Oh wait, it's Mr List aka Snyder. Ok then it makes sense.
Just dont fuck with my soaring chinese umbrella manufacturing stock. Chinese umbrella manufacturing is the untapped booming market wave of the future.
Don't forget the matching buggy whip.
rain or shine, they need their umbre...
all chinese women do, no?
im all in.......... its gonna be big!!!! IMO
My chinese checkers stock is booming!
My broker, sum tin du doo, told me that when the market collapses, 1 billion chinamen will need something to pass the day.
WINNING BITCHEZ!
Note to TPTB, While preparing for the way overdue Monetary Reset, try the following exercise to get over the jitters of hitting the big red Reset Button:
Hit the "That was Easy" button a few times a day.
p.s. Have Cramer give us a 1-week Heads-Up before you do it though, as a courtesy to business news junkies.
“I am utterly amazed at how the Federal Reserve can play havoc with the market,” Paul Craig Roberts said. “I look at it as being very unstable, Totally Unsustainable, and don't know how it has lasted so long.”
Fixed it.
The open source software government will need a military at first. So far it has one troop: an English major in his senior year armed with a pen.
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http://www.youtube.com/watch?v=2eB046f998U (1:39:02)
Published on Apr 2, 2014
This film explores the evolution of propaganda and public relations in the United States, with an emphasis on the "elitist theory of democracy" and the relationship between war, propaganda and class.
Includes original interviews with a number of dissident scholars including Noam Chomsky, Howard Zinn, Michael Parenti, Peter Phillips ("Project Censored"), John Stauber ("PR Watch"), Christopher Simpson ("The Science of Coercion") and others.
See more at http://www.ConspiracyDocumentaries.com
http://www.conspiracydocumentaries.com/featured/psywar/
I love a nice juicy conpiracy theory . . . the more diabolical the better!
obama to make internet gun speech illegal through executive order
https://www.youtube.com/watch?v=Xk5PC30xwys
So why are media reporting everything's going awesome? Oh and Snyder forgot to read theGuardian; ~150.000 ppl protesting against "austerity/trickle-up-economics" in UK.
http://www.theguardian.com/world/2015/jun/20/tens-thousands-rally-uk-pro...
Title is broad & vague. What is this about?
"Meanwhile, in the U.S. money is flowing out of bonds at a staggering pace. The following quote originally comes from Bank of America"
- Bonds, Out-Flow of Bond Investors
End of Story.
Bonds are like 8-10 Times the value of Stocks (equities). Watch the Bond Market.
End of Story.
Confusing Article.
So what's probably been happening around Greece is 'in groups' have been giving the APPEARANCE of shorting, but not doing it just selling and buying S&P futures to boost the market to give the impression of a rise.
I'm a relative novice at this so why did it take so long for this to become clear? People must have known about this since around two months ago or longer!
Everything just keeps going on and on and on and on and on and on and on and on and on...AND NOTHING EVER CHANGES OR IMPROVES.
When humanity falls sick, so does the financial system.
......and its gone.
Just never gets old, a bit like sumtingwong and hope and change.
The successful Capitalist is the rentier who does very little and lives off the income from his property, investments and securities.
Everyone is now looking to be an investor and abandoning hard work as the way to riches.
The rest is inevitable.
When Capitalism reaches its zenith, everyone will be an investor and no one will be doing anything.
Central Bank inflated asset bubbles will provide for all.
The biggest market in the world today is derivatives, money making money without a useful product or service in sight.
We are nearly there.
Of course, if robots are doing almost everything, that might be made to work.
And Chinese people, our modern slaves.
Let me understand this; would I be correct if I said the larger the derivatives market becomes the more devalued assets become including currency until they ultimately become worthless?
Let me understand this; would I be correct if I said the larger the derivatives market becomes the more devalued assets become including currency until they ultimately become worthless?
Batman11
"Everyone is now looking to be an investor and abandoning hard work as the way to riches."
And that, my friend, is one of of the gravest of issues in the U.S.
Hard, physical, laboring is frowned upon as personally demeaning. What with all the useless women's studies and other bullshit degrees among the "educated" classes, folks shouldn't have to work so hard.
There was a time when those people who had degrees were respected because it was truly an accomplishment and considered value added. The American worker was respected because of his ability to make shit happen.
The lack of critical thinking skills among today's educated, and the loss of skilled labor in the industrial trades, can't BUT come back to bite us in the ass.
Yep, you are spot on, Batman11.
Nobody wants to fuckin' work for anything anymore, be inconvenienced, or experience any level of discomfort. That's what happens when you have a pussified nation full of people awarded blue-ribbons for participation. Yep, even the pride that used to go with winning a blue-ribbon has been watered down to meaningless drivel. Let's just keep lying to ourselves about that shit, too.
Sorry for the ranting and raving. Now I'm good and pissed. Fuck you Mike Snyder. Though I don't disagree, it's just more weekend doom and gloom for the targeted audience.
I mostly agree. My husband and I, in our mid fifties are toiling away, in very strenuous/demanding physical work building our year round greenhouse farming business and we grow thousands of pounds of greens every year to sell to our local supermarkets and often give surplus to our local food bank. This is a "feel good" business because we are actually growing super nutritious food that people are desperate for.
Which brings me to another thought; I think the health of people's minds today is so severely compromised by the shitty food they eat that what you end up with is people who can't think straight and do shit like give up on ever doing an honest days work. The phrase you are what you eat couldn't be more true....garbage in and garbage out and I'm not just talking about shit.
7 people is a long line? I expected to see a line around the block.
Greece has placed the EU in a 'no win' situation just as surely as past Greek political leaders have placed Greece in a 'no win' situation. The EU cannot back down because, if they do, the rest of the PIIGS (except for maybe Ireland) will line up and demand the same concessions. This is part of the contagion effect. Previous Greek political leaders fraudulently concealed a massive budget deficit and unrecorded liabilities (mostly from the ridiculous pension/retirement at 50 program) to get into the EU knowing they would have to be bailed out, which did happen almost as soon as they were admitted into the EU. Now Greece is burdened with debts so large they will never be able to repay, indeed Mr. Tsipras and Varoufakis want a large portion of it forgiven now. If there is a haircut , the EU will have been bilked, ripped off, by Greece. All EU members in good standing will be so furious they will probably want to dissolve the EU/Euro because it will have become a failed experiment that never had a realistic chance of succeeding. Greece is the Achilles Heel of the EU.
As for 'game theory', Varoufakis has demonstrated that he is in fact playing games. On every point in the debate with the EU Yanis accuses them of doing exactly what he and Alexis have been doing. The most recent such instance is Yanis' accusation that the EU and Merkel are trying to 'blackmail' Greece. Any keen observer of this tragi-comedy will realize this behavior can be observed on any grade-school playground. It is immature. That's why Madame LaGarde said what is lacking is dialog with "adults in the room".