Panic of 2015?

Reblogged from hallindsey.com
By Hal Lindsey

On last week’s Hal Lindsey Report, I talked about some of the underlying problems facing the Chinese economy and how that affects other nations. After taping that program, I watched financial markets all over the world go on one of the wildest rides in history. The immediate cause of all that turmoil was China.  

Uncertainty has become the word of the hour. On Monday, the Dow Jones Industrial average went down almost 1,100 points, then rose back up to within 115 points of where it all started, before falling back down to a loss of 588 points by the end of the day. They called it “Manic Monday.”

It was followed by what some were calling “Turnaround Tuesday.” And it did turn around — several times. The Dow rose 440 points early on. By noon it was at 333. With a half hour left to go, it remained in positive territory — 120 points to the good. But in the final 30 minutes, it lost all the gains and ended at negative 204 points. On the day, the Dow traveled up and down a total of more than 1,600 points. Now that’s a ride!  

It was only about a month ago that the Administration was telling us not to worry about China. Secretary of the Treasury, Jack Lew, told a gathering at the Brookings Institute that Chinese markets would have little affect in the United States. “I will say that China’s markets still are pretty much separated from world markets. They’re, obviously, moving towards being more integrated, but right now they’re not. . . . So you’re not going to, I don’t think, see the direct linkage there.”

U.S. exports to China are third behind only Canada and Mexico. Imports from China exceed that of all other nations. It’s concerning that the man who is, in effect, the Chief Financial Officer of the United States of America, can’t see the linkage between the American and Chinese economies.  

All over the world, nations have been printing cash and keeping interest rates low. They’ve been doing the kind of things nations do when they’re desperately trying to avert a collapse. Such measures are usually only temporary, but they’ve been going on now for several years in a row.

In the U.S., investors worry that, after 6 ½ years at near zero, the Fed will finally increase interest rates. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta calls raising the interest rates, “the normalization of monetary policy.” And he’s right, it has not been normal to keep the rates so low for so long.  

It’s unsettling that governments all over the world seem to already be pulling out all the stops trying to keep the world economy afloat. That’s one reason Stephen King from HSBC Bank, said, “The world economy is sailing across the ocean without any lifeboats to use in case of emergency.”

 Before they were called recessions or even depressions, financial crises were known as “panics.” There was the “Panic of 1819,” the “Panic of 1837,” the “Panic of 1857,” the “Panic of 1873,” the “Panic of 1893,” and the “Panic of 1907" among others. While they were sometimes called “depressions,” people named them with the word “Panic.”When dealing with large crowds, panic is an ever present possibility, and exceedingly dangerous.

 

In 1856, Charles Haddon Spurgeon, sometimes known as the “Prince of Preachers,” held a mass meeting at the Surrey Gardens Music Hall. Someone yelled “Fire!” in that venue holding 10,000 people. In those days, aisles and doors were exceedingly narrow. In the panic that followed, seven died and dozens were hospitalized with serious injuries.An economic panic works in much the same way. Economic fears are visceral with us because we fear a disruption in the flow of money. 

 

We know that money buys our food and clothes. It buys shelter and transportation. We use money to purchase the basic necessities of life for ourselves and our loved ones. Economic panic is extremely powerful. Along with fear of war, economic panic will one day enable the Antichrist’s rise to power.Because money buys the necessities of life, it’s easy to understand why people begin to see money as their provider. They begin to treat money as an idol to be served. But we should never confuse the Provider with the thing provided.

Jesus gave us this profound warning. “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and money.” [Matthew 6:24 NIV] 

Money does not provide. Money is a provision from God — one of many. We like cash because it gives us freedom to choose, but sometimes God meets our needs more directly. Sometimes He gives us shelter or food directly from His own hand. He sent Elijah to the brook Cherith where God commanded ravens to feed him. 

God doesn’t promise money. He promises provision. Later, the Lord allowed brook Cherith to dry up. He wanted Elijah to move on to another place where He would bless both Elijah and those who would care for him. In neither case did God answer with money, but in both cases He met Elijah’s need.  

Jesus spoke of God providing for “the fowls of the air” and “lilies of the field.” He said, “Seek first the kingdom of God and His righteousness, and all these things shall be added to you.” [Matthew6:33 NKJV]

Even as we recognize that we buy things with money, including the basic necessities of life, remember that money does not feed or clothe us. It buys shelter, but it does not provide shelter. We work for it, but we do not serve it. We who follow Christ serve our Lord; and He feeds, clothes, and shelters us. He alone is Jehovah-jireh — our Provider.

BLACK MONDAY: Stocks Sink At Opening Bell As Full-Blown Panic Grips Wall Street

Reblogged from nowtheendbegins.com

Geoffrey Grider | August 24, 2015 | 3 Comments

“We are in the midst of a full-blown growth scare,” strategists at JP Morgan Cazenove said in a note.

LONDON – Alarm bells rang across world markets on Monday as a near 9 percent dive in China shares and a sharp drop in the dollar and major commodities panicked investors.

European stocks were more than 5 percent in the red and Wall Street was braced for similar losses after Asian shares slumped to 3-year lows as a three month-long rout in Chinese equities threatened to get out of hand.

Down, down, down…..

Oil plunged another 4 percent, while safe-haven government U.S. an German bonds and the yen and the euro rallied as widespread fears of a China-led global economic slowdown and currency war kicked in.

“It is a China driven macro panic,” said Didier Duret, chief investment officer at ABN Amro. “Volatility will persist until we see better data there or strong policy action through forceful monetary easing.”

Many traders had hoped that such support measures, which could include an interest rate cut, would have come from Beijing over the weekend after its main stocks markets slumped 11 percent last week. With serious doubts also now emerging about the likelihood of a U.S. interest rate rise this year, the dollar slid against other major currencies.

The Australian dollar fell to six-year lows and many emerging market currencies also plunged, whilst the frantic dash to safety pushed the euro to a 6-1/2-month high above $1.15.

“Things are starting look like the Asian financial crisis in the late 1990s. Speculators are selling assets that seem the most vulnerable,” said Takako Masai, head of research at Shinsei Bank in Tokyo.

12 EVENTS THAT WILL OCCUR IN SEPTEMBER THAT YOU SHOULD KNOW ABOUT

As commodity markets took a fresh battering, Brent and U.S. crude oil futures hit 6-1/2-year lows as concerns about a global supply glut added to worries over potentially weaker demand from the normally resource-hungry China.
U.S. crude was last down 3.6 percent at just below $39 a barrel while Brent dropped to $43.74 a barrel to take it under January’s lows for the first time.

Copper, seen as a barometer of global industrial demand, tumbled 2.5 percent, with three-month copper on the London Metal Exchange also hitting a six-year low of $4,920 a tonne. Nickel slid 6 percent to its lowest since 2009 too at $9,570 a tonne.

GREAT FALL OF CHINA

The near 9 percent slump in Chinese stocks was their worst performance since the depths of the global financial crisis in 2007 and wiped out what was left of the 2015 gains, which in June has been more than 50 percent.

With the latest slide rooted in disappointment that Beijing did not announce expected policy support over the weekend, all index futures contracts slumped by their 10 percent daily limit, pointing to more bad days ahead.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 5.1 percent to a three-year low. Tokyo’s Nikkei ended down 4.6 percent and Australian and Indonesian shares hit two-year troughs.

“China could be forced to devalue the yuan even more, should its economy falter, and the equity markets are dealing with the prospect of a weaker yuan amplifying the negative impact from a sluggish Chinese economy,” said Eiji Kinouchi, chief technical analyst at Daiwa Securities in Tokyo.

Just as worrying was evidence that developed markets were becoming synchronized with the troubles. London’s FTSE with its large number of global miners and oil firms, was down for its 10th straight day, its worst run since 2003.

The pan-European FTSEurofirst 300 was last down 5 percent at 1,355 points, wiping around 400 billion euros ($460.16 billion) off the index and taking its losses for the month to more than 1 trillion euros.

U.S. stock futures also pointed to big losses for Wall Street’s main markets, with the S&P 500, Dow Jones Industrial and Nasdaq expected to open down 3.6, 4.0 and 4.9 percent respectively. It is likely to tip the S&P 500 and Nasdaq formally into ‘correction’ territory – meaning stocks, at their lows, are 10 percent off their 52-week highs.

“We are in the midst of a full-blown growth scare,” strategists at JP Morgan Cazenove said in a note. source

Guess What Happened The Last Time The Chinese Stock Market Crashed Like This?

Reblogged from http://christianpatriots.org
via servehiminthewaiting.com  
 
America, Banks, China, Economy, Government, Money

July 2, 2015 Country Christian 4 Comments

 

The second largest stock market in the entire world is collapsing right in front of our eyes.  Since hitting a peak in June, the most important Chinese stock market index has plummeted by well over 20 percent, and more than 3 trillion dollars of “paper wealth” has been wiped out.  Of course the Shanghai Composite Index is still way above the level it was sitting at exactly one year ago, but what is so disturbing about this current crash is that it is so similar to what we witnessed just prior to the great financial crisis of 2008 in the United States.

From October 2006 to October 2007, the Shanghai Composite Index more than tripled in value.  It was the greatest stock market surge in Chinese history.  But after hitting a peak, it began to fall dramatically.  From October 2007 to October 2008, the Shanghai Composite Index absolutely crashed.  In the end, more than two-thirds of all wealth in the market was completely wiped out.  You can see all of this on a chart that you can find right here.  What makes this so important to U.S. investors is the fact that Chinese stocks started crashing well before U.S. stocks started crashing during the last financial crisis, and now it is happening again.  Is this yet another sign that a U.S. stock market crash is imminent?


Over the past several months, I have been trying to hammer home the comparisons between what we are experiencing right now and the lead up to the U.S. financial crisis in the second half of 2008.  Today, I want to share with you an excerpt from a New York Times article that was published in April 2008.  At that time, the Chinese stock market crash was already well underway, but U.S. stocks were still in great shape…

The Shanghai composite index has plunged 45 percent from its high, reached last October. The first quarter of this year, which ended Monday with a huge sell-off, was the worst ever for the market.

Suddenly, millions of small investors who were crowding into brokerage houses, spending the entire day there playing cards, trading stocks, eating noodles and cheering on the markets with other day traders and retirees, are feeling depressed and angry.

This sounds almost exactly like what is happening in China right now.  First we witnessed a ridiculous Chinese stock market bubble form, and now we are watching a nightmarish sell off take place.  This next excerpt is from a Reuters article that was just published…

Shanghai’s benchmark share index crashed below 4,000 points for the first time since April – a key support level that analysts said had been seen as a line in the sand that Beijing had to defend, below which more conservative investors would start ejecting from their leveraged positions, widening the rout.

Chinese markets, which had risen as much as 110 percent from November to a peak in June, have collapsed at an incredibly rapid pace in since June 12, losing more than 20 percent in jaw-dropping volatility as money surges in and out of the market.

That drop has wiped out nearly $3 trillion in market capitalization, more than the GDP of Brazil.

Did you catch that last part?
The amount of wealth that has been wiped out during this Chinese stock market crash is already greater than the entire yearly GDP of Brazil.
To me, that is absolutely incredible.
And now that the global financial system is more interconnected than ever, what goes on over in China has a greater impact on the rest of the globe than ever before.  Today, China has the largest economy on the planet on a purchasing power basis, and the Chinese stock market “is the second largest in the world in terms of market capitalization”…

Just as in 1929, flighty retail investors make up the bulk of China’s stock market and, just as in 1929 in the U.S., they have heavily margined their accounts. The Financial Times puts the number of retail investors in the Chinese stock market at 80 to 90 percent of the total market. Retail investors, unlike sophisticated institutional investors, are prone to panic selling, which explains the wild intraday swings in the Shanghai Composite over the past week.

Last night, the Shanghai Composite broke a key technical support level, closing below 4,000 at 3,912.77. The index is now down 24 percent since it peaked earlier this month and has wiped out more than $2.4 trillion in value. China’s stock market is the second largest in the world in terms of market capitalization, with the U.S. ranking number one.

Making world markets even more worried about the situation in China, its regulators are showing a similar brand of leadership as Mario Draghi. After previously pledging to trim back risky margin lending, they have now done a complete flip flop and are permitting individual brokerage firms to avoid selling out accounts that miss margin calls by setting their own guidelines on the amount of collateral needed.

I know that a lot of Americans don’t really care about what happens over in Asia, but when the second largest stock market in the entire world crashes, it is a very big deal.
The great financial crisis of 2015 has now begun, and it is just going to get much, much worse.  On Thursday, Ron Paul declared that “the day of reckoning is at hand“, and I agree with him.
So what comes next?

The following is what Phoenix Capital Research is anticipating…

By the time it’s all over, I expect:

1)   Numerous emerging market countries to default and most emerging market stocks to lose 50% of their value.

2)   The Euro to break below parity before the Eurozone is broken up (eventually some new version of the Euro to be introduced and remain below parity with the US Dollar).

3)   Japan to have defaulted and very likely enter hyperinflation.

4)   US stocks to lose at least 50% of their value and possibly fall as far as 400 on the S&P 500.

5)   Numerous “bail-ins” in which deposits are frozen and used to prop up insolvent banks.

I tend to agree with most of that. I don’t agree that the euro is going to go away, but I do agree that the eurozone is going to break up and be reconstituted in a new form eventually.  And yes, we are going to see tremendous inflation all over the world down the road, but I wouldn’t say that it is imminent in Japan or anywhere else.  But overall, I think that is a pretty good list.

So what do you think is coming?

Written by Michael Snyder – The Economic Collapse