Friday, November 13, 2015
So many of the exact same patterns that we witnessed just before the stock market crash of 2008 are playing out once again right before our eyes. Most of the time, a stock market crash doesn’t just come out of nowhere. Normally there are specific leading indicators that we can look for that will tell us if major trouble is on the horizon. One of these leading indicators is the junk bond market. Right now, a closely watched high yield bond ETF known as JNK is sitting at 35.77. If it falls below 35, that will be a major red flag, and it will be the first time that it has done so since 2009. As you can see from this chart, JNK started crashing in June and July of 2008 – well before equities started crashing later that year. A crash in junk bonds almost always precedes a major crash in stocks, and so this is something that I am watching carefully.
And there is a reason why junk bonds are crashing. In 2015 we have seen the most corporate bond downgrades since the last financial crisis, and corporate debt defaults are absolutely skyrocketing. The following comes from a recent piece by Porter Stansberry…
So far this year, nearly 300 U.S. corporations have seen their bonds downgraded. That’s the most downgrades per year since the financial crisis of 2008-2009. The year isn’t over yet. Neither are the downgrades. More worrisome, the 12-month default rate on high-yield corporate debt has doubled this year. This suggests we are well into the next major debt-default cycle.
Another thing that I am watching closely is the price of oil.
A massive crash in the price of oil preceded the stock market crash of 2008, and over the past year we have seen another dramatic crash in the price of oil.
Many had been expecting the price of oil to bounce back, but instead we are seeing new downward momentum. In fact, according to Business Insider the price of U.S. oil briefly dipped below $43 a barrel on Wednesday…
Crude oil was down nearly 3% in morning trade on Wednesday.West Texas Intermediate crude oil futures in New York dropped to as low as $42.97 per barrel. Futures touched a $42-handle in the last week of October, but last traded near those levels for a considerable period in August.
Another thing that I am watching is the ongoing crash of other industrial commodities. This is something that also preceded the stock market crash of 2008, and it is a clear sign that global economic activity is really slowing down.
Prices for industrial commodities such as aluminum, tin, iron ore and coal are all crashing. But the commodity that has me most alarmed personally is copper.
Economists commonly refer to it as “Dr. Copper”, and there is a very good reason for that. Looking back over history, the price of copper often makes a significant move in one direction or the other before the overall economy does. And the price of copper almost always starts declining before stocks do.
As I write this, the price of copper has fallen to $2.21, and it is already lower than at any point since the last financial crisis. To get a better perspective regarding what I am talking about, just check out this chart. This is one signal that is absolutely screaming that a major financial crisis is imminent.
One more harbinger of financial doom on the horizon is the surging U.S. dollar. The U.S. dollar surged just before the financial crisis of 2008, and now it is happening again.
Most Americans don’t understand this, but the truth is that a rising U.S. dollar puts an incredible amount of stress on emerging markets all around the globe. Since the last financial crisis, many of these emerging markets have been on a massive debt binge, and much of that debt was denominated in U.S. dollars. Now that the dollar has increased in value, emerging market borrowers are finding that it takes much more of their own local currencies to service and pay back those debts. Defaults are rapidly rising, and emerging market economies all over the world (such as Brazil) have already plunged into recession.
If the Fed does follow through with an interest rate hike in December, that is going to make things even worse. The U.S. dollar will surge even more, and emerging markets will be in even more trouble.
At the same time that the dollar is getting stronger, the euro is getting weaker. An article that was posted by CNBC on Wednesday went so far as to state that “it is now looking like the euro reaching parity with the greenback is all but guaranteed”…
The prospect of the Fed hiking interest rates in December has pushed the dollar higher, and it is now looking like the euro reaching parity with the greenback is all but guaranteed.Strategists, however, disagree on how quickly that will happen and how much more the dollar can appreciate in the near term. That depends, they say, on the Fed, and how fast it will raise interest rates in a world where other central banks are moving in the opposite direction toward easier policy.Goldman Sachs analysts this week reiterated that they expect euro parity with the dollar by year-end though other strategists expect the decline in the common currency against the dollar to take longer.
Let’s see, who has been warning that this would happen for more than a year? Here are just a few examples…
July 19th: “For a long time, I have been repeating my prediction that the euro would fall to parity with the U.S. dollar.”
June 28th: “As I have warned repeatedly, the euro is heading for parity with the U.S. dollar, and at some point it will drop below parity.”
May 25th: “As I have warned so many times before, the euro is headed for parity with the U.S. dollar, and then it is going to go below parity.”
In August 2014, just a little bit over a year ago, the EUR/USD was sitting above 1.30. At that time very few people out there would have ever imagined we would be talking about parity just a little more than a year later.
This is just the beginning of a time of great financial volatility. The things that we are going to witness in the months and years to come are going to be absolutely unprecedented. A massive global debt super-cycle is coming to an end, and the pain that this is going to mean for the global economy is almost too great to put into words.
Credit to Economic Collapse
Something strange is happening to our planet. Over the past 30 days, there seems to have been much more “shaking” than normal, and this is particularly true along the Ring of Fire. This afternoon I visited the official website of the U.S. Geological Survey, and I discovered that Chile had been hit with 12 major earthquakes within the last 24 hours alone. The smallest was of magnitude 4.4, and the two largest both measured magnitude 6.9. We have also seen dozens of volcanoes erupt recently, including the incredibly dangerous Mt. Popocatepetl in Mexico. Fortunately we have not seen a major disaster that kills thousands of people yet, but many believe that all of this shaking is leading up to one. In addition, the weather all over the world continues to get freakier and freakier. Just today, Yemen was hit by a second major tropical cyclone in less than a week. Any one of these strange disasters in isolation may not seem like that big of a deal, but when you start putting all of the pieces together it starts to become clear that something really significant is taking place.
So why are all of these things happening? Well, some experts point to the sun. In recent years there has been a tremendous amount of hype about “global warming”, but the truth is that evidence is starting to emerge that indicates that our sun might be heading into a period of “hibernation”…
The sun will go into “hibernation” mode around 2030, and it has already started to get sleepy. At the Royal Astronomical Society’s annual meeting in July, Professor Valentina Zharkova of Northumbria University in the UK confirmed it – the sun will begin its Maunder Minimum (Grand Solar Minimum) in 15 years. Other scientists had suggested years ago that this change was imminent, but Zharkova’s model is said to have near-perfect accuracy.
And what did we see last winter? It was a very cold, bitter winter that set new all-time records all over the planet. Here is more from that same article…
Solar cycle 24 – two cycles prior the cycle that’s expected to bottom out into a Maunder Minimum – was weak. In 2013-14 it reached its maximum far below average. Meanwhile extreme cold-weather anomalies have occurred around the world. Last year “polar vortices” slammed into the central US and Siberia as a third hovered over the Atlantic. All 50 US states, including Hawaii, had temperatures below freezing for the first time in recorded history. Snowfall records were broken in cities in the US, Canada, Italy, New Zealand, Australia, Japan and elsewhere. Southern American states and central Mexico, where snow is rare, got heavy snow, as did the Middle East.This past summer the cold didn’t let up, with more temperature records across the US and rare summer snows seen in Canada, the US and China. Birds have migrated early in the last two years. Antarctic sea ice set a new record in 2013 and it was broken again in 2014.
Will this upcoming winter be similar?
Should we be anticipating a lot of cold and a lot of snow?
I have been watching stories like this for a couple of years. Our sun has begun to behave very erratically, and yet very few people are paying attention. But without the sun, life on earth would not be possible. So the fact that the giant ball of fire that we revolve around is starting to act very strangely should be a huge news story.
And this is not something that scientists have just started noticing. This has been going on for quite some time. For example, the following is from a BBC article that was published last year…
“I’ve been a solar physicist for 30 years, and I’ve never seen anything quite like this,” says Richard Harrison, head of space physics at the Rutherford Appleton Laboratory in Oxfordshire.He shows me recent footage captured by spacecraft that have their sights trained on our star. The Sun is revealed in exquisite detail, but its face is strangely featureless.“If you want to go back to see when the Sun was this inactive… you’ve got to go back about 100 years,” he says.This solar lull is baffling scientists, because right now the Sun should be awash with activity.
Another thing that many scientists are watching closely is the possibility of a magnetic pole shift. This has become such a concern that even scientists at NASA are talking about it. A major news source in the UK recently published an article entitled “NASA: Earth’s magnetic poles are ‘switching’ with catastrophic consequences for humanity“, and the following was the most fascinating part of the story for me personally…
Bruce Jakosky, MAVEN principal investigator at the University of Colorado, Boulder, said when the switch does take place, the Earth’s magnetic field which prevents the Sun’s dangerous radiation getting through, would be neutralised for around 200 years.He revealed the detail during an historic announcement about how Mars lost 99% of its atmosphere and its oceans that could have housed early life.Mr Jakosky explained that Mars had been blasted by solar winds, which had stripped it of its atmosphere, for billions of years since the beginnings of our solar system.He said: “When the polar shift happens the Earth will have no magnetic field for about 200 years.”During that time the Sun’s solar blasts are expected to strip away at our atmosphere as they did on Mars billions of years ago.
That certainly doesn’t sound good.
How could humanity possibly survive if “the Earth will have no magnetic field” for 200 years?
Perhaps some would survive by living in underground facilities shielded from the sun. But certainly most of humanity simply would not make it.
Meanwhile, as I have written about previously, scientists tell us that the entire universe is “slowly dying“. Apparently the universe is only producing about half as much energy as it once did, and over time the level of energy being produced continues to fade.
Most of us just take for granted that our planet, our sun and our universe will remain stable and behave normally.
But what if we have entered a time when things start to change dramatically?
What if the years ahead are filled with earth changes of a magnitude that most of us cannot even possibly imagine?
What will that mean for our society and for the future of humanity?
Credit to End of the American Dream
GETTY•EPAProtestors burned an EU flag as thousands took to the streets in Warsaw
In a show of defiance against EU lawmakers, an estimated 25,000 people joined a march to commemorate the anniversary of Poland's return to independence after the First World War.
Poland only joined the EU in 2004, however, many in Warsaw used the event to express rising anger with Brussels amid Europe's ongoing migrant crisis.
The nationalist display is believed to have been attended by far-right neo-Nazi groups.
A eurosceptic party recently claimed victory in the eastern European country's elections, with Poland's pro-EU prime minister also set to be replaced.
Protestors were photographed trampling and burning an EU flag while one group reportedly chanted: "Yesterday it was Moscow, today it's Brussels which takes away our freedom".
A banner held by demonstrators also featured the slogan "EU macht frei" a reference to the infamous 'work makes you free' gates at the Auschwitz death camp built by the Nazi’s as part of the Final Solution, which translates from German as 'EU makes you free'.
Despite clashes at previous marches in recent years and the deployment of several thousand riot police, the protest went off peacefully.
GETTYAn estimated 25,000 people took part in the march
Firecrackers, smoke bombs and thousands of Polish national flags were seen at the nationalist march, which gathered outside the country's national football stadium at one point.
One demonstrator, 27-year-old Piotr, told AFP: "I came here because I love Poland and want to show it.
"I came here for my grandfather, who fought in the Warsaw Uprising, and for his father, who fought for independence".
After eight years of rule by Poland's centrist Civic Platform party, the eurosceptic Law and Justice Party (PiS) won a small absolute majority in Warsaw last month.
The result is also set to see the country's pro-Brussels prime minister Ewa Kopacz replaced by PiS candidate Beata Szydlo.
The PiS party's opposition to an EU plan to relocate refugees fleeing war and persecution in the Middle East and Africa among member states is likely to set it on a collision course with Brussels.
Credit to Express.co.uk
Russia deploys advanced 'Growler' anti-aircraft missile system in Syria able to hit jets at an altitude of up to 90,000 feet as far away as Tel Aviv
Vladimir Putin has deployed an advanced anti-aircraft missile defense system to Syria with a range capable of taking down jets as far away as Tel Aviv.
The Russian military released photographs of the S-400 Air Defense System, known to NATO as SA-21 'Growler', at the Latakia Airbase on the Syrian coast.
The advanced missile system, which is understood to have a maximum range of 250 miles is capable of bringing down an aircraft at a maximum altitude of 90,000 feet - which is more than twice the height of a cruising passenger airliner.
Analysts believe that that the military hardware, circled, forms part of the S-400 Air Defense System, known to NATO as the SA-21 'Growler' which has been deployed to Latakia Airbase in Syria, pictured
The SA-21 Growler can cover the airspace over RAF Akrotiri in Cyprus, Tel Aviv, Israel and most of Syria
The Russian military invited members of the media to the airbase on the Syrian coast to view their operation
The Russian Ministry of Defence invited a group of 50 foreign journalists to the airbase where the air-defence radar system could be clearly seen.
From the heavily-defended airbase, the missile system can cover an area covering most of Syria, southern Turkey, Cyprus, the eastern Mediterranean as well as much of Israel.
The missile system comes in three sections, with a central control point, a radar complex capable of tracking 300 targets and controlling six anti-aircraft missile launchers.
Credit to Dailymail.co.uk
Read more: http://www.dailymail.co.uk/news/article-3316195/Vladimir-Putin-deploys-advanced-Growler-anti-aircraft-missile-Syria-able-hit-jets-altitude-90-000-feet-far-away-Tel-Aviv.html#ixzz3rLRRvKV4