Socio-Economics History Blog

Socio-Economics & History Commentary

Jim Sinclair: Next Crash Will Look Like Mad Max! Biggest Bubble in the History of Finance

  • Jim Sinclair: Next Crash Will Look Like Mad Max
    by Greg Hunter’sUSAWatchdog.com (Early Sunday Release) 
    Renowned gold and financial expert Jim Sinclair says recent dire predictions from Wall Street icons are more than a warning. They are telegraphing their trading positions.  Sinclair explains, “They are preparing for what they believe.  They talk their own positions.  So, it’s more than a warning.  They are telling you exactly what they have done.  They are not out to save the man in the street.  They are out to make money in a huge short position, probably in over-the-counter derivatives. . . . They’re not looking for a market tic down.  They are looking for a market with a character of backing up to an open to an elevator with no elevator there. . . . We’ve got no volume, fake prices, and we’ve got the biggest money in the world short the market. We’ve also got a Fed with no tools, and now we have a Fed whose primary indicator is starting to have a heart attack. . . . When this thing comes down, it’s going to be a free fall.”

    Greg Hunter was invited to guest host with Mr. Sinclair and his business partner Bill Holter on JSMineset.com for their paid subscribers. Holter adds, “The fact you have so many (Wall Street elite) coming out in a compressed period of time tells you it’s on the immediate horizon. . . . It’s a reset.  That’s how it’s going to be done.  We will go to bed on Friday and come Monday morning, the markets won’t open, and whenever they do reopen, there’s your reset or the beginning of the reset.”

    One of the big potential triggers that could bring the markets crashing down is more than $10 trillion in European government bonds with negative interest rates. Holter begins by saying, “Negative rates mean that debt is trading to a premium to cash.  So, what it is saying is debt is better than cash.  That’s impossible.  Whether it’s a trigger or not, I don’t know.  I do know it’s highly explosive.”  Sinclair adds, “Let’s start thinking about this as the biggest bubble that has ever existed.  It makes the South Sea Bubble look like a joke.”

    read more.

end

June 20, 2016 Posted by | Economics, Social Trends | , , , , , , , , , , , , , , , , , , , | Comments Off on Jim Sinclair: Next Crash Will Look Like Mad Max! Biggest Bubble in the History of Finance

‘The EU’s Banking System Will Crash’: What About Wall Street?

https://larouchepac.com/20160104/eus-banking-system-will-crash-what-about-wall-street

Click on image for article.

http://www.theguardian.com/commentisfree/2015/nov/01/financial-armageddon-crash-warning-signs

Click on image for article.

http://theeconomiccollapseblog.com/archives/financial-armageddon-approaches-u-s-banks-have-247-trillion-dollars-of-exposure-to-derivatives

Click on image for article.

http://www.telegraph.co.uk/finance/economics/12052433/Third-Avenue-could-be-the-event-that-will-finally-explode-the-post-crisis-asset-bubble.html

Click on image for article.

http://www.theguardian.com/commentisfree/2015/nov/03/financial-crisis-corporate-power-george-monbiot

Click on image for article.

January 5, 2016 Posted by | Economics | , , , , , , , | Comments Off on ‘The EU’s Banking System Will Crash’: What About Wall Street?

Euro Banks Are Blowing Out; Dodd-Frank ‘Bail-In’ Means Americans Will Be Killed To Salvage Them

WarrenBuffet-Financial_Derivatives_r_WMD_n_time_bombs_for_the_economic_system

  • Emphasis mine:
  • Euro Banks Are Blowing Out; Dodd-Frank ‘Bail-In’ Means Americans Will Be Killed To Salvage Them
    by https://larouchepac.com/  
    Europe’s major banks are desperately trying to stay on their feet long enough to be saved by their Jan. 1, 2016 bail-in thievery. According to a Dec. 22 Reuters report, Europe’s big banks have slashed 130,000 jobs between June and December 2015, compared to 78,000 lost over 2013 and 2014 combined, as they try to cut costs and pull out of markets to not have to report their utter bankruptcy. The banks involved include Deutsche Bank, Unicredit, Credit Suisse, HSBC, Standard Chartered, BNP Paribas, Barclays, and now Rabobank.

    Speaking for the City of London, the Dec. 27 Financial Times has an editorial praising “the launch of the EU’s so-called single resolution mechanism” (i.e., bail-in) as of Jan. 1, 2016, on top of the earlier “significant expansion of the ECB’s powers in November 2014.” But that is not enough, they instruct:

    “A third, more politically sensitive step towards a complete banking union is necessary in order to minimize the risk that fresh crises will erupt in the future and, if they do, to limit the consequences”… for the bankers, of course. This means creating a “common deposit insurance,” which Germany is especially opposed to, since they know it means they will have to pick up the tab for everybody else. But, the Times concludes, until that is done”the Eurozone will remain vulnerable to financial shocks and contagion for which, one day, it may pay a far higher price.”


    Nor is it only the citizens of all of Europe whose lives will be sacrificed to bail-in the European banks: Americans are also required to be slaughtered for that goal, as per the dictates of Dodd-Frank and the Financial Stability Board (FSB), a supranational body established at the April 2009 G20 summit in London, the first summit attended by the newly-elected President Barack Obama. As we have reported in the past, an October 2011 FSB document on “cross-border resolution” states in Section 7.3:

    “The resolution authority should have resolution powers over local branches of foreign firms and the capacity to use its powers either to support a resolution carried out by a foreign home authority (for example, by ordering a transfer of property located in its jurisdiction to a bridge institution established by the foreign home authority) or, in exceptional cases, to take measures on its own initiative where the home jurisdiction is not taking action or acts in a manner that does not take sufficient account of the need to preserve the local jurisdiction’s financial stability.”

    But when all is said and done, the purported idea behind the bail-in policy is patently absurd, even on its own terms, and cannot possibly work. The starting premise of both Dodd-Frank and the EU’s new regulations is that derivatives are not subject to bail-inIn other words, 99% of all financial assets are protected and excluded from bail-in provisions, and are supposedly going to be kept afloat by the other 1%, which are subject to bail-in. EIR has estimated that cumulative international bail-out and bail-in combined from 2008-2014 amounted to a mere $20 trillion—i.e., about 1% of the total $2 quadrillion in global financial assets. So for anyone willing to look at it, the clear intent of bail-in is not to actually keep the bubble intact, but to kill off billions of people as per the British Empire’s stated policy.

end

December 30, 2015 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , , , , , , , | Comments Off on Euro Banks Are Blowing Out; Dodd-Frank ‘Bail-In’ Means Americans Will Be Killed To Salvage Them

Global Collapse Just after 1 Jan 2016? Two Quadrillion Dollars Financial Derivatives Meltdown?

https://larouchepac.com/20151227/obamas-mass-murder-plan

Click on image for article.

https://larouchepac.com/20151223/emergency-christmas-eve-message-january-1st-doomsday-only-fdr-action-can-save-you

Click on image for article.

https://larouchepac.com/20150624/britain-empire-evil-pushes-genocide-and-world-war

Click on image for article.

https://larouchepac.com/20150621/free-pope-satan-schellnhuber-satanic-figure

Click on image for article.

https://larouchepac.com/20141224

Click on image for article.

December 28, 2015 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , , , , , , , , , , , | Comments Off on Global Collapse Just after 1 Jan 2016? Two Quadrillion Dollars Financial Derivatives Meltdown?

During the Next Crisis, Central Banking Itself Will Fail

Don't you see the Illuminist pyramid and Satanic capstone on your dollar bill? The symbol of the Anti-Christ.

Don’t you see the Illuminist pyramid and Satanic capstone on your dollar bill? The symbol of the Anti-Christ.

  • Failure of the FedRes is to be expected because in the next stage of the Illuminist plan is the launching/creation of the Global Supra-National Central Bank under the One World Government control. The FedRes, ECB, BOJ, BOE … and many central banks will be merged to form it.

Ron_Paul_Merger_of_ECB_FedRes_BOJ_WorldCentralBank

  • During the Next Crisis, Central Banking Itself Will Fail
    by Phoenix Capital Research 
    For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis. All of the arguments claiming this defied common sense. A 5th grader would tell you that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system.

    Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can’t “save” the economy.

    However, there is an AWFUL lot of money at stake in believing these lies. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.

    So it’s little surprise that no one would admit the facts: that the Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so. So here are the facts: 

    1)   The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.

    2)
    The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.

    3)
    Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.

    4)   Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.

    5)   The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.

    6)   The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.

    We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work.  They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.

    read more.
  • “They are planning through the IMF to come up with a World Currency to replace the dollar because the dollar will be replaced you just can’t keep printing them forever …. They wanna come up with another currency controlled and ruled by the United Nations and IMF ! “ – Quote: Ron Paul, 12 Jan 2012 at South Carolina.
  • “Are we going to go another step further into INTERNATIONAL MONEY … are we gonna go toward a U.N./IMF STANDARD where they are going to control with the USE OF FORCE another fiat standard. That’s what many people are working for and I CONSIDER THAT A VERY DANGEROUS MOVE!” – Ron Paul
http://thenewamerican.com/economy/economics/item/14579-killing-the-dollar-g20-imf-push-for-global-fed-global-currency

Click on image for article!

end

December 26, 2015 Posted by | Economics | , , , , , , , , , , , , , , , | Comments Off on During the Next Crisis, Central Banking Itself Will Fail

Treasury Report Shows Biggest Threat to U.S. Is on Wall Street

Financial rape of the sheeple!

Financial rape of the sheeple!

  • Treasury Report Shows Biggest Threat to U.S. Is on Wall Street 
    by Pam Martens and Russ Martens: December 16, 2015, http://wallstreetonparade.com/  
    If the U.S. government issued a warning yesterday that there was a credible threat of a new terrorist attack from a foreign terrorist, we can guarantee you that it would have made front page headlines. What the U.S. government did instead yesterday was to issue a formal warning that the prospects for a new financial crisis have grown, and, in one area, are at an “historically elevated level.”

    Since the financial crisis of 2007-2009 did more economic damage to the U.S. than all terrorist attacks combined and will have a devastating impact on the standard of living of the next generation, one would think this new financial warning would have been worthy of a mention on the front pages of mainstream newspapers. And yet, we could find no mention in the New York Times, Los Angeles Times, Chicago Tribune, Washington Post, etc. (To their credit, the Wall Street Journal and Reuters did write about the findings.)

    What might explain the hesitation to carry the story by the major dailies is the contradictory nature of the material released by the U.S. Treasury’s Office of Financial Research (OFR). That’s the body created under the Dodd-Frank financial reform legislation of 2010 to keep the Financial Stability Oversight Council (also created under Dodd-Frank) informed on a timely basis to rising threats to financial stability in the U.S.

    The OFR report listed a litany of hair-raising threats to financial stability but then bizarrely concluded: “Overall, threats to U.S. financial stability remain moderate….”

    read more.

end

December 18, 2015 Posted by | Economics | , , , , , , , , , , , , | Comments Off on Treasury Report Shows Biggest Threat to U.S. Is on Wall Street

Big Banks Caught Using Credit Default Swaps To Destroy Nations – Jeff Nielson

FedRes_banksters_looting_cartoon_Amateurs

  • Big Banks Caught Using Credit Default Swaps To Destroy Nations – Jeff Nielson
    by Jeff Nielson, https://www.sprottmoney.com/  
    At the beginning of 2010, readers were presented with what was (at the time) merely a theory. The Big Bank crime syndicate was engaged in the serial manipulation of credit default swaps, in order to (among other things) destroy the economies of entire nations. It’s one of the reasons these “financial weapons of mass destruction” ( Warren Buffett ) were illegal in the U.S. for roughly 100 years, banned under anti-gambling statutes.

    The theory was supported by a combination of compelling empirical evidence and logical deduction (i.e. “circumstantial evidence”) – roughly the same evidentiary basis by which we obtain most of our criminal convictions in our courts of law. The difference here is that with our governments having abandoned the Rule of Law, there was no one ready or willing to adjudicate over such evidence.

    Before moving to the new evidence of an open conspiracy by the Big Banks to manipulate this market, it is necessary to review this older evidence. The chronology begins after the Crash of ’08, and takes the form of a comparison of two nations and their economies: Greece and the U.S.

    Both nations were clearly hopelessly insolvent. Both nations’ insolvency came largely through absurd levels of military over-spending. The main difference is that one nation – the U.S. – was even more insolvent than the other. It simply pretended (and still pretends) to be “solvent” through enormous and absurdly transparent accounting fraud, which would be instantly prosecuted if attempted by any U.S. corporation (other than a Big Bank ).

    Yet despite these two similar economies, there was nothing similar about their interest rates. The benchmark U.S. interest rate was permanently frozen at an ultra-fraudulent 0%. This meant paying no interest on loans to the U.S. government, despite the enormous risk of lending money to history’s most-indebted nation.

    Similarly, the (supposed) “market rate” on various maturities of U.S. bonds remained at near-zero, despite the gargantuan risk. Such a disconnect between risk and interest rates has never before been seen in our debt markets. Then there was Greece’s interest rates , an even larger, logical disconnect.
    … 
    First the Big Banks manipulate credit default swap prices higher in the debt market of the intended victim. Then the tag-team operation moves to the corporate media, another tentacle of the crime syndicate which readers know as the One Bank . The media mouthpieces gasp-and-moan in mock anguish about the supposed “increased risk” in the debt market of the victim, while nothing has changed except the manipulative betting of the Big Bank crime syndicate.

    The last tag-team partner in this chain of economic terrorism is the so-called “credit rating agencies.” These agencies claim to assess the manipulative betting in the CDS market, and the Chicken Little hysteria from the mainstream media, and then downgrade the debt of the victim’s market on the basis of a supposed “change in risk” – when, still, nothing has changed in the victim’s economy.

    The downgrade on the victim’s debt results in automatic, upward revisions in the interest which the victim must pay on all of its debt. With essentially no regulation of the crime-saturated “derivatives market,” the crime syndicate could (and did) repeat this cycle of manipulation as often as was necessary to officially bankrupt Greece.

    Via the economic terrorism of credit default swap manipulation alone, the Wall Street terrorists were able to drive interest payments on Greece’s debt higher by roughly a factor of 600%. Meanwhile, U.S. interest rates were manipulated in the opposite direction. What would have happened if those on Wall Street manipulated U.S. interest rates to 30% (the same level as Greece), resulting in U.S. interest payments rising by more than 1,000%?

    Just to pay the interest on its debt (to the same, Big Bank crime syndicate), the U.S. government would have to begin by shutting down the entire government, and disbanding the U.S. military, in order to bring spending down to zero. Then it would have to double everyone’s taxes in order to come up with the full payments to the parasitic bankers. And then, in a few weeks, the U.S. economy would totally collapse – just as Greece’s economy did in 2011.

    read more.

WallStreet_Follow_the_Money_Illuminati_Pyramid_organizations

Who owns the world reserve currency, the dollar, the global monetary hegemony? Look at the Satanic capstone on your dollar bill. The Luciferian New World Order will be complete with the arrival of the Satanic capstone: the Anti-Christ, fake messiah, bringer of false peace, the white horseman of Revelation 6!

Who owns the world reserve currency, the dollar, the global monetary hegemony? Look at the Satanic capstone on your dollar bill. The Luciferian New World Order will be complete with the arrival of the Satanic capstone: the Anti-Christ, fake messiah, bringer of false peace, the white horseman of Revelation 6!

end

December 17, 2015 Posted by | Economics, GeoPolitics | , , , , , , , , , , , , , , , , , | Comments Off on Big Banks Caught Using Credit Default Swaps To Destroy Nations – Jeff Nielson

The System Is Starting Its Final Collapse

Newspaper-With-Financial-Collapse

  • The System Is Starting Its Final Collapse
    by http://investmentresearchdynamics.com/  
    The director of the CME Metals Group announced her resignation to effective December 11. No further explanation was provided – Reuters link.  I’m not one to infer some type of conspiracy theory in connection with this, but it seems rather abrupt.   It’s akin to Bernanke leaving the Fed much sooner than anyone expected.  The rats are leaving the ship before it sinks.

    The collapse began in earnest in 2008.  This is why gold soared to all-time highs in dollar terms until late 2011.  The effort to push down the price of gold is overt evidence that the systemic collapse, even with the heavy application of money printing, has been ongoing since 2008.  The recurring violent hits to the price of gold using fraudulent paper gold is overt evidence that the authorities are becoming more desperate in their attempt to hide any possible market signals that the systemic collapse is accelerating.  This is how gold behaved from March 2008 – October 2008.  Look what happened then.

    Something catastrophic is occurring behind “the curtain.”   I would love to have a peak at what is melting down.  We can generally speculate that, with the oil, copper and iron ore price collapse, and with emerging market currencies collapsing,  there’s been a series of derivatives explosions that have been contained but that are straining the Central Banks’ abilities to keep the system from coming completely unglued.  This is also why the price of gold is being contained with brute force.

    We have never seen markets behave the way they’re behaving right now,  with absolute unpredictability.  The overt intervention is a big part of the what we’re seeing on the surface with gold, currencies, credit markets and the primary stock indices.  But all indications suggest a high likelihood of several train wrecks occurring at once behind the scenes.  The intervention, of course, is keeping the surface indicators from crashing.  But the intervention has also destroyed the signal transmission and rational capital allocation mechanisms of the market.  Adam Smith’s “invisible hand” has been amputated, if you will.

    read more.

end

December 5, 2015 Posted by | Economics | , , , , , , , , , , , , , , | Comments Off on The System Is Starting Its Final Collapse

The Shocking True State of the Financial System Today

Newspaper-With-Financial-Collapse

  • The Shocking True State of the Financial System Today
    by Phoenix Capital Research, via http://www.zerohedge.com  
    For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis. All of the arguments claiming this defied common sense. A 5th grader would tell you that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system.

    Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can’t “save” the economy.

    However, there is an AWFUL lot of money at stake in believing these lies. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.

    So it’s little surprise that no one would admit the facts: that the Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so. So here are the facts:

    1)   The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.
    2) The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.
    3) Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.
    4) Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.

    5) The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.
    6) The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.

    We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work.  They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.

    read more.

end

December 4, 2015 Posted by | Economics | , , , , , , , , , , , , , | Comments Off on The Shocking True State of the Financial System Today

Dr. Jim Willie: Potential Triggers for next Financial Crisis to finally Cripple US$

  • Published on Nov 29, 2015
    Dr. Jim Willie website: http://www.goldenjackass.com

    Saturday Nov. 28, 2015. Paul Sandhu records another episode of Wake up and Live Radio. To help us wake up from the slumber induced by the spells of the mainstream media, I have joining me today, Dr. Jim Willie from down South in Costa Rica. Dr. Willie is a very popular guest on my channel and on the alternative media in general because of his analytical skills in separating the wheat from the chaff when it comes

    TOPICS DISCUSSED
    NUMEROUS IMMINENT TRIGGERS
    • Crude Oil Price touches $30 (***)
    • Oil Hedge Expiration initiates string of bank failures (***)
    • Emerging Market Debt defaults begin in a rash (***)
    • Fall of House of Saud, from financial and internal forces
    • Saudis concede to Chinese oil sales in RMB currency
    • China & Russia inaugurate the Gold Trade Note for payments
    • Group of Southern European banks fail simultaneously in a PIGS fit
    • Turkey suffers military coup to oust Erdogan, exits NATO
    • Deutsche Bank failure, unsuccessful restructure, leading to derivative incident
    • Germany & France halt Russian sanctions
    • QE Declared a Failure by Renegade Western Bankers
    • Wall Street Banks lose control of Interest Rate Derivatives
    • USFed Rate Hike causes immediate derivative incident
    • Chain Reaction for nations announcing precious metals backed currency (see Mexico, Russia, Germany, Iran, South Africa)
    • Evidence put before United Nations on US-UK-Israel role in ISIS terror
    • New Oil Cartel Emerges in Russia, Iran, Saudis to upset global alliances
    • United States, NATO, British Crown, Vatican Revealed as Narcotics Agents
    • Assassination of one or more Western Elite figures 

end

November 30, 2015 Posted by | Economics, GeoPolitics | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments Off on Dr. Jim Willie: Potential Triggers for next Financial Crisis to finally Cripple US$

“On The Cusp Of A Staggering Default Wave”: Energy Intelligence Issues Apocalyptic Warning For The Energy Sector

http://www.infowars.com/plummeting-oil-prices-could-destroy-the-banks-that-are-holding-trillions-in-commodity-derivatives/

Click on image for article!

  • “On The Cusp Of A Staggering Default Wave”: Energy Intelligence Issues Apocalyptic Warning For The Energy Sector
    by Tyler Durden, http://www.zerohedge.com  
    The Energy Intelligence news and analysis creator and aggregator is not one to haphazradly throw around hyperbolic claims and forecasts. So when it gets downright apocalyptic, as it did this week in a report titled “Is Debt Bomb About to Blow Up US Shale?”, people listen… and if they are still long energy junk bonds, they panic. The summary: 

    “The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. How bad could things get?”

    The full report by Paul Merolli, a senior editor and correspondent at Energy Intelligence:

    Debt Bomb Ticking for US Shale
    The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. How bad could things get and when? It increasingly looks like a number of the weakest companies will run out of financial stamina in the first half of next year, and with every dollar of income going to service debt at many heavily leveraged independents, there are waves of others that also face serious trouble if the lower-for-longer oil price scenario extends further.


    “I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession
    ,” Timothy Smith, president of consultancy Petro Lucrum, told a Platts energy conference in Houston last week. Much has been made about the resiliency of US oil production in the face of low prices, but the truth is that many producers are maximizing their output — even unprofitable volumes — because they need the cash flow to service their debt (related). “As an industry, we’re at the point where every dollar of free cash flow now goes to paying back debt,” Angle Capital’s Steve Ilkay told the same conference. Ilkay, who advises North American producers on asset management, said during the boom years of 2012-14 about 55% of the sector’s free cash flow, which is calculated by subtracting capital expenditures from operating cash flow, was allocated toward debt repayment.


    With West Texas Intermediate (WTI) stuck below $50 per barrel since August — and closer to $40 recently — the industry has responded with deeper cuts to capex and a greater focus on efficiency (EIF Nov.4’15). However, experts say this won’t be enough to avoid a bloody reckoning with persistent low oil and gas prices, as the sector grapples with some $200 billion-plus in high-yield debt, which it absorbed to finance the shale oil boom. Credit quality has been steadily deteriorating since June 2014, when WTI peaked at $108/bbl. Standard and Poor’s says there have been 19 defaults so far in 2015 across the US oil and gas industry, while another 15 companies have filed for bankruptcy. Besides those that have missed interest or principal payments, the default category also includes companies that have entered into “distressed exchanges” with their creditors, including Halcon, SandRidge, Midstates, Goodrich, Warren, Exco, Venoco and Energy XXI (EIF Jul.8’15).

    read more.
http://rt.com/uk/215579-uk-oil-industry-crisis/

Click on image for article.

http://www.bloomberg.com/news/2014-12-18/bankers-see-1-trillion-of-investments-stranded-in-the-oil-fields.html

Click on image for article.

end

November 30, 2015 Posted by | Economics | , , , , , | Comments Off on “On The Cusp Of A Staggering Default Wave”: Energy Intelligence Issues Apocalyptic Warning For The Energy Sector

Rickards on China, SDR: “Next Panic Will Be Bigger Than the Central Banks”

November 21, 2015 Posted by | Economics | , , , , , , , , , , , , , , | Comments Off on Rickards on China, SDR: “Next Panic Will Be Bigger Than the Central Banks”

“Nothing Makes Sense Anymore” Traders Fear Debt Market Distortions Signal “Something Big Is Brewing”

Shit_Storm

  • “Nothing Makes Sense Anymore” Traders Fear Debt Market Distortions Signal “Something Big Is Brewing”
    by Tyler Durden, http://www.zerohedge.com  
    In the last few months we have warned of the“perversions” in US money markets (here, here, and most recently here) adding that “to ignore them at your own peril.” And now, as Bloomberg reports, it appears the mainstream is beginning to recognize that something very strange is going on in debt markets. Across developed markets, the conventional relationship between (‘risk-free’) government debt and other ‘more risky’ assets has been turned upside-down. “Everybody in the fixed-income market should care about this,” warns a rates strategist and in fact, it’s hard to overstate how illogical it is when swap spreads are inverted, as JPM warns the moves in swap-spreads “should be viewed as symptomatic of deeper problems.”

    As we stated before, a negative swap spread holds no interpretative meaning, the very fact of which is the most important element.

    In other words, we don’t have to figure out what the “market” is saying about a negative spread because it isn’t saying anything other than “something” is wrong(and very wrong with so many and deeper negative and compressed maturities).

    read more.

end

November 17, 2015 Posted by | Economics | , , , , , , , | Comments Off on “Nothing Makes Sense Anymore” Traders Fear Debt Market Distortions Signal “Something Big Is Brewing”

Apocalypse Now: Has the Next Giant Financial Crash Already Begun?

http://www.theguardian.com/commentisfree/2015/nov/01/financial-armageddon-crash-warning-signs

Click on image for article.

  • Global economic, financial and currency collapse is almost here. Got physical gold/silver yet? It is a deliberate, engineered global crisis by the Satanic cabal via their Illuminist banksters. The Satanic WW3 will follow soon. Listen to the war drums in Europe, Middle East and Asia.

end

November 3, 2015 Posted by | Economics, Social Trends | , , , , , , , , , , , , , , , , , | Comments Off on Apocalypse Now: Has the Next Giant Financial Crash Already Begun?

More and More Countries Are Moving to Ban Cash Transactions

http://www.ft.com/intl/cms/s/0/159b17ca-47f3-11e5-b3b2-1672f710807b.html

Click on image for article. Needs subscription.

  • More and More Countries Are Moving to Ban Cash Transactions
    by Graham Summers, Phoenix Capital Research, http://www.goldseek.com/  
    More and more institutions are trying to make it harder for you to move your money into cash. Globally, over $5 trillion in debt currently have negative yields in nominal terms, meaning the bond literally has a negative yield when it trades. In the simplest of terms this means that investors are PAYING to own these bonds.

    Bonds are not unique in this regard. Switzerland, Denmark and other countries are now charging deposits at their banks. France and Italy have banned any transaction over €1,000 Euros from using physical cash. Spain has already banned transactions over €2,500. Uruguay has banned transactions over $5,000. And on and on.

    This is also at work in the US. Louisiana has made it illegal to purchase second hand goods using cash. This is just the beginning. The War on Cash will be spreading in the coming weeks. 

    The reasoning is simple. Most large financial entities are insolvent. As a result, if a significant amount of digital money is converted into actual physical cash, the firm would very quickly implode.

    This is true for banks around the world. European banks as a whole are leveraged at 26 to 1. In simple terms, this means they have just €1 in capital for every €26 in assets (bought via borrowed money).  If a significant percentage of their depositors took their money out of the bank, the bank would violate its capital limitations at best and implode at worse.

    The US financial system isn’t any better. Indeed, the vast majority of it is in digital money. Actual currency is just a little over $1.36 trillion. Bank accounts are $10 trillion. Stocks are $20 trillion and Bonds are $38 trillion. And at the top of the heap are the derivatives markets, which are over $220 TRILLION. 

    Notice that less than 1% of the “wealth” in this system is actual physical cash. Now imagine what would happen if investors decided to move their money out of the system and into physical cash.

    This is precisely what imploded the money market system during the 2008 crisis.

    If you think the banks aren’t terrified of what this market could do to them, consider that JP Morgan managed to get Congress to put the US taxpayer on the hook for it derivatives trades. Mind you, this is the same bank that is now refusing to let clients store cash in safe deposit boxes.

    This is just the beginning. As anyone can tell you, it’s all but impossible to move large amounts of money into cash in the US. Even the large banks will routinely ask you for 24 hours notice if you need $10,000 or more in cash. These are banks will TRLLLIONS of dollars worth of assets on their books.

    This is just the beginning.
    Indeed, we’ve uncovered a secret document outlining how the Fed plans to incinerate savings.
http://www.telegraph.co.uk/finance/bank-of-england/11874061/Negative-interest-rates-could-be-necessary-to-protect-UK-economy-says-Bank-of-England-chief-economist.html

Click on image for article.

http://www.infowars.com/financial-times-calls-for-abolishing-cash/

Click on image for article.

http://english.pravda.ru/news/business/19-05-2015/130638-cash-0/

Click on image for article.

end

October 27, 2015 Posted by | Economics, Social Trends | , , , , , , , , , , , , , | 1 Comment