Those that watched their stocks steadily increase in value for years are now seeing all of that “wealth” disappear at a staggering pace. The only way you actually make money in the stock market is if you get out in time, and many Americans are discovering that all or most of their gains have already been wiped out. At this point, the Dow Jones Industrial Average has dipped below where it was at the end of the 2013 calendar year. That means that nearly two years of gains have already been obliterated. On Friday, the Dow was down another 272 points, and it is now down more than 2200 points from the peak of the market back in May. For months, I have been detailing how things were setting up for this kind of financial crash in textbook fashion, and now events are playing out just as I warned. But this is just the beginning – what is coming next is going to shock the world.
Submitted by Tyler Durden on 09/05/2015 - 09:17 Over the past 48 hours or so, we’ve seen what certainly appears to be visual confirmation of a non-negligible Russian military presence in Syria. Going into the weekend however, Russia had yet to confirm publicly that it had commenced military operations in the region despite the fact that it’s the next closest thing to common knowledge that at the very least, the Kremlin has provided logistical support and technical assistance for a period that probably spans two or more years. But on Friday, Vladimir Putin looks to have confirmed the scope of Russia’s military role, even if he stopped short of admitting that Russian troops are engaged in combat.
Submitted by Tyler Durden on 09/05/2015 - 14:30 The last few months have seen a steady drip-drip-drip increase in US, European, and Chinese bank credit risks, even as stock prices rose (aside from the latter). The turning point appears to have been the downturn in oil prices as traders began to hedge their counterparty risk in massive levered derivative positions tied to commodities. But it is not just banks... COMEX counterparty risk mut sbe on the rise, as Jesse's Cafe Americain notes, the 'claims per ounce of gold' deliverable at current prices has spiked higher once again, to a record 126:1.
Submitted by Tyler Durden on 09/05/2015 - 13:45 Given the global implications of what’s going on in China’s stock market and the fact that the yuan devaluation is set to accelerate the great EM FX reserve unwind while simultaneously driving a stake through the heart of beleaguered emerging economies from LatAm to AsiaPac it’s wholly understandable that everyone should focus on equities and FX. That said, understanding the scope of the risk posed by China’s many spinning plates means not forgetting about the other problems Beijing faces, not the least of which is a massive collection of debt.
Submitted by Tyler Durden on 09/05/2015 - 13:00 The EIA released a report this week that showed that there would be little effect on gasoline prices if the U.S. government lifted the ban on crude oil exports. In fact, gasoline prices could even fall because refined product prices are linked to Brent much more than WTI, so more supplies on the international market would push down Brent prices. The report lends credence to the legislative campaign on Capitol Hill to scrap the ban, a movement that is picking up steam. On the other hand, although few noticed, the EIA report also said that the refining industry could lose $22 billion per year if the ban is removed. So far, many members of Congress have been reluctant to weigh in on this issue for exactly that reason: it pits drillers against refiners, both of which are powerful political players.
Submitted by Tyler Durden on 09/05/2015 - 12:15 In a stunningly honest admission from a member of the elite, Zhou Xiaochuan, governor of China’s central bank, exclaimed multiple times this week to his G-20 colleagues that a bubble in his country had "burst." While this will come as no surprise to any rational-minded onlooker, the fact that, as Bloomberg reports, Japanese officials also confirmed Zhou's admissions, noting that "many people [at the G-20] expressed concerns about the Chinese market," and added that "discussions [at the G-20 meeting] hadn't been constructive" suggests all is not well in the new normal uncooperative G-0 reality in which we live.
Submitted by Tyler Durden on 09/05/2015 - 11:30 The first change often occurs below the surface. The deterioration of the market’s internals typically occurs in the lead-up and development of a cyclical market top, but this dynamic too can persist for an extended period. However, eventually these divergences reach a head, and the most egregious cases have historically occurred within close proximity to major, cyclical market tops. The deterioration of the broader market is so great that the resultant foundation of support below the surface of the popular market cap-weighted averages is nearly non-existent. Once the relatively few leaders propping up the market begin to collapse under the weight, the inevitable cyclical decline can commence.
Submitted by Tyler Durden on 09/05/2015 - 10:45 Amid the carnage and chaos of the last two weeks, one thing has become crystal clear - the effect of massive one-way bets on 'everything', predicated on the omnipotence of central bankers, has left a market (stocks, bonds, FX, commodities) bereft of fundamental linkages and instead driven entirely by technicals (flows, forced unwinds, systematic gamma). While many 'records' were broken in terms of velocity of moves, it is the VIX complex that seems to have suffered most, and as the following chart shows, positioning is now at an extreme in both stocks, vol, and bonds once again.
Submitted by Tyler Durden on 09/05/2015 - 10:00 There is no better way to describe the international monetary system today than through the statement made in 1971 by U.S. Treasury Secretary, John Connally. He said to his counterparts during a Rome G-10 meeting in November 1971, shortly after the Nixon administration ended the dollar’s convertibility into gold and shifted the international monetary system into a global floating exchange rate regime that, "The dollar is our currency, but your problem.” This remains the U.S. policy towards the international community even today. On several occasions both the past and present chairpersons of the Fed, Ben Bernanke and Janet Yellen, have indicated it still is the U.S. policy as it concerns the dollar. Is China saying to the world, but more particularly to the U.S., “The yuan is our currency but your problem”?
There have been a serious of recent revelations which should concern Americans who desire to keep living their lives outside the perimeter of a FEMA Camp, or worse.
Red List Documents That Have Your Name On Them
Lisa Haven recently uncovered this report, which is over a year old and she summarizes the report in the following video.
Lisa Haven is an excellent reporter who does not get enough credit for her fine work. With regard to the following, she is to be commended for this stunning revelation which makes it clear that George W. Bush’s previous admonition which stated that “You are either with us or with the terrorists” was indeed a portend of things to come.
Donald Trump’s popularity has hit new heights among America’s Republican voters, according to a Monmouth University survey released on Thursday.
Thirty percent of voters now support Trump, a gain of four points from the previous Monmouth national poll that was taken before last month’s Republican presidential debate.
“None of the establishment candidates is having any success in getting an anti-Trump vote to coalesce around them. In fact, any attempt to take on Trump directly only seems to make him stronger,” said Patrick Murray, director of the independent Monmouth University Polling Institute in West Long Branch, NJ.
Political and business circles across Asia face a shifting geopolitical environment driven by the inevitable rise of China. Several fundamental factors are driving this shift that if fully understood should help established political orders, business interests, and ruling elite across Asia position themselves for a peaceful, stable, prosperous future. Failure to position oneself carefully as this shift takes place, can see a political dynasty or business empire swallowed whole in the fissures of geopolitical tectonic change.
What Asia Looked Like and Why It’s Changing
For centuries Asia was dominated by first European colonial hegemony, then for nearly a century, American hegemony. The United States itself admits that it possesses “primacy” over Asia and that its primary geopolitical objective in Asia is to maintain that “primacy.”
We live in uncertain times. After six-plus years, the bull market is limping along, set to collapse under its own weight.
But before it does, you’d be wise to take some precautions — set yourself up to profit, even.
One way to do that is through the time-honored practice of shorting.
And that’s exactly what I’m going to show you how to do.
Before we get to that, though, I want to talk about something else: risk.
Jade Helm’s tagline is “mastering the human domain”.
We have been told that, in part, this has to do with special operations outfits from the Navy, Army, Air Force and Marines using covert warfare techniques to infiltrate average American neighborhoods (as mock “hostile environments”) and walk “undetected amongst civilian populations” without being noticed by the rest of us. Oh, and it’s for “refining the skills needed against an ever changing foreign threat” (emphasis added on the word ‘foreign’) according to Army Special Operation Command spokesman Mark Lastoria.
Well, here’s one way they reportedly have done that.
Proposed Amendment to the Constitution: All Acts of War Must Be Put to a National Vote … and People Voting Yes Must Register as Volunteers for Service in the United States Army
Given that war hurts the economy and the little guy, and that just about the only people who promote war are the oligarchs and their toadies, I think we should bring back the following constitutional amendment proposed in 1916:
All acts of war should be put to a national vote. Anyone voting yes had to register as a volunteer for service in the United States Armyimage/acslaw.org
There is a growing sense across the financial spectrum that the world is about to turn some type of economic page. Unfortunately no one in the mainstream is too sure what the last chapter was about, and fewer still have any clue as to what the next chapter will bring. There is some agreement however, that the age of ever easing monetary policy in the U.S. will be ending at the same time that the Chinese economy (that had powered the commodity and emerging market booms) will be finally running out of gas. While I believe this theory gets both scenarios wrong (the Fed will not be tightening and China will not be falling off the economic map), there is a growing concern that the new chapter will introduce a new character into the economic drama. As introduced by researchers at Deutsche Bank, meet “Quantitative Tightening,” the pesky, problematic, and much less disciplined kid brother of “Quantitative Easing.” Now that QE is ready to move out…QT is prepared to take over.