Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China? If you are like most Americans, you have not been. Most Americans don't seem to really care too much about what is happening in the rest of the world, but they should. In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks. We are not at a "global crisis" stage yet, but things are getting worse with each passing day. Many have felt that 2014 could turn out to be a major "turning point" for the global economy, and so far that is exactly what it is turning out to be. The following are 20 early warning signs that we are rapidly approaching a global economic meltdown...
Dick Clark didn't poll America to determine their taste in music. He told them their taste in music ... not directly, but by creating common knowledge — ideas that a crowd believes that the crowd believes. With the American Bandstand group dance staging and scripted questions, Clark allowed the TV audience to see a crowd of attractive young people act as if the music were popular. This is all it takes. Clark didn't have to force his preferred choice of popular culture on his audience like some centrally-planned Ministry of Culture. The TV audience chose it all on their own, thinking all along it was their choice! This is the power of the Emperor's New Clothes. This is the power of the sitcom laugh track and the live studio audience. This is the power of public coronations and executions. This is the power of Tahrir Square and Tiananmen Square. This is the power of the crowd seeing the crowd, and it is the most potent force in the social world. It's certainly the most potent force in the social world of markets, and every Central Banker today is playing the Common Knowledge Game just as hard as Dick Clark ever did.
Once upon a time, the only CME margin hike releases the investing population cared about were those for gold (because no matter how high the E-Mini went, the CME never seemed too bothered). Now, the CME has more "important" things to worry about - such as preventing the "heating bill shock" that will come in February when the majority of the population opens their electricity and heating statements for January (sorry, there goes the discretionary retail spending cash). And of course, the ongoing deterioration of the emerging markets, in this case led by Turkey and the absolute collapse in the Turkish Lira. Which is why about an hour ago, the CME decided to hike both TRY (to the USD and EUR) and Nat Gas margins, by 14 and 20% respectively. Will this normalize some of the vol seen around these products on Monday remains to be seen. Oh well, if not - the CME can just hike some more the same day, until it gets the desired outcome.
Curious why over the past few months JPM has quietly been accumulating a substantial amount of eligible physical gold (even as its registered gold inventory is the lowest it has ever been at just 87K ounces since December 13, 2013 when 147K ounces of gold was withdrawn - keep that date in mind for a few minutes)? This may have something to do with it: moments ago the daily Comex gold vault report confirmed what many expected, namely that the JPM accumulation was merely in advance anticipation of major withdrawals. How major? Well, on January 23, JPM saw 321,500 ounces of gold depart in one day. This was tied for the single biggest daily withdrawal in history!The last time JPM had an identically sized withdrawal? December 13.... 2012.
With Argentina's black-market peso (blue dolar rate) trading over 12, it would appear that the market is rapidly realizing the Central Bank's ammunition in its currency defense is likely to run out sooner rather than later. Perhaps it is time to get out that Soros' British Pound playbook?
KIEV CLASHES RESUME BETWEEN PROTESTERS, POLICE: CHANNEL 5 TV
KIEV PROTESTERS ATTACKED AFTER POLICE INJURED ACTIVIST: TV 5
UKRAINE PROTESTERS THROW MOLOTOV COCKTAILS, ROCKS AT POLICE
UKRAINE POLICE RESPOND WITH RUBBER BULLETS, STUN GRENADES
UKRAINE POLICE BLAME PROTESTERS FOR BREAKING TRUCE: STATEMENT
Back in the years just before the previous housing bubble burst (not to be confused with the current, even more acute one), one person did the math on subprime, realized that the housing - and credit bubble - collapse was imminent, and warned anyone who cared to listen - almost nobody did. That man was Kyle Bass, and because he had the guts to put the money where his mouth was, he made a lot of money. Fast forward to 2014 when subprime is all the rage again and the subprime bubble is bigger than ever: it may comes as a surprise to some that in 2013, subprime debt was one of the best performing fixed income instruments, returning a whopping 17% in a year when most other debt instruments generated negative returns. And this time, while Kyle Bass is busy - collecting nickels (each costing a dime) perhaps - it is someone else who has stepped into Bass' Cassandra shoes: that someone is Jeff Gundlach. “These properties are rotting away,”
VIX's 25% spike from yesterday's lows to over 17% is the largest jump in 7 months. Stocks are continuing to collapse broadly (even as Bonds are stable) with the Dow almost unchanged from Taper now. Trannies are back to their 50DMA for the first time in over 3 months and the Dow and S&P are well through the 50DMA. The USD is stable but JPY is leading the charge lower in stocks. Credit markets are at 7 week wides. Not "off the lows"
While the world of speculative capital is focused intently on the Twitter and Facebook #Ref/0 fundamental valuations in the publicly-traded equity markets, as the WSJ illustrates, the real dot-com 2.0 bubble is occurring in the private markets. Today there are more than 30 companies in the US, Europe, and China that are valued at $1 billion or more by venture-captal firms and the club is becoming less exclusive as venture capitalists (in their ever growing speculative fervor) funnel large sums of capital into start-ups.