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Page added on August 5, 2015
Financial Experts That Are Warning A Great Financial Crisis Is Imminent
Will there be a financial collapse in the United States before the end of 2015? An increasing number of respected financial experts are now warning that we are right on the verge of another great economic crisis. Of course that doesn’t mean that it will happen. Experts have been wrong before. But without a doubt, red flags are popping up all over the place and things are lining up in textbook fashion for a new financial crisis. As I write this article, U.S. stocks have declined four days in a row, the Dow is down more than 750 points from the peak of the market in May, and one out of every five U.S. stocks is already in a bear market. I fully expect the next several months to be extremely chaotic, and I am far from alone. The following are 8 financial experts that are warning that a great financial crisis is imminent…
#1 During one recent interview, Doug Casey stated that we are heading for “a catastrophe of historic proportions”…
“With these stupid governments printing trillions and trillions of new currency units,” says investor Doug Casey, “it’s building up to a catastrophe of historic proportions.”
Doug Casey, a wildly successful investor who’s the head of the outfit Casey Research, is predicting doom and gloom for the global economy.
“I wouldn’t keep significant capital in banks,” he told Reason magazine Editor-in-Chief Matt Welch. “Most of the banks in the world are bankrupt.”
#2 Bill Fleckenstein is warning that U.S. markets could be headed for calamity in the coming months…
Noted short seller Bill Fleckenstein, who correctly predicted the financial crisis in 2007, says he is one step closer to opening up a short-focused fund for the first time since 2009. In the meantime, Fleckenstein says the entire market could be heading for calamity in the coming months.
“The market is uniquely crash-prone,” Fleckenstein told CNBC’s “Fast Money” this week. “I think the market is very brittle because of high-frequency trading, ETFs, a lot of momentum investors. I don’t think there’s going to be any painless back door.”
#3 Richard Russell believes that the bear market that is coming “will tear apart the current economic system”…
From my standpoint, this is the strangest period that I have gone through since the 1940s. The Industrials are declining faster than the Transports. If this continues, at some point the Industrials will touch the Transports. When that happens, I believe a bear market will be signaled, as both Industrials and Transports accelerate on the downside.
I expect a brief period of higher prices which will draw in the amateurish retail public. This brief breather will be followed by an historic bear market that will tear apart the current economic system.
#4 Larry Edelson is “100% confident” that a global financial crisis will be triggered “within the next few months”…
“On October 7, 2015, the first economic supercycle since 1929 will trigger a global financial crisis of epic proportions. It will bring Europe, Japan and the United States to their knees, sending nearly one billion human beings on a roller-coaster ride through hell for the next five years. A ride like no generation has ever seen. I am 100% confident it will hit within the next few months.”
#5 John Hussman is warning that market conditions such as we are observing right now have only happened at a few key moments throughout our history…
In any event, this is no time to be on autopilot. Look at the data, and you’ll realize that our present concerns are not hyperbole or exaggeration. We simply have not observed the market conditions we observe today except in a handful of instances in market history, and they have typically ended quite badly (see When You Look Back on This Moment in History and All Their Eggs in Janet’s Basket for a more extended discussion of current conditions). In my view, this is one of the most important moments in a generation to examine all of your risk exposures, the extent to which you believe historical evidence is informative, your tolerance for loss, your comfort or discomfort with missing out on potential rallies even in a wickedly overvalued market, and your true investment horizon.
#6 During a recent appearance on CNBC, Marc Faber suggested that U.S. stocks could soon plummet by up to 40 percent…
The U.S. stock market could “easily” drop 20 percent to 40 percent, closely followed contrarian Marc Faber said Wednesday—citing a host of factors including the growing list of companies trading below their 200-day moving average.
In recent days, “there were [also] more declining than advancing stocks, and the list of 12-month new lows was very high on Friday,” the publisher of The Gloom, Boom & Doom Report told CNBC’s “Squawk Box.”
“It shows you a lot of stocks are already declining.”
#7 In a previous article, I noted that Henry Blodget of Business Insider is suggesting that U.S. stocks could soon drop by up to 50 percent…
As regular readers know, for the past ~21 months I have been worrying out loud about US stock prices. Specifically, I have suggested that a decline of 30% to 50% would not be a surprise.
I haven’t predicted a crash. But I have said clearly that I think stocks will deliver returns that are way below average for the next seven to 10 years. And I certainly won’t be surprised to see stocks crash. So don’t say no one warned you!
#8 Egon von Greyerz is even more bearish. He recently told King World News that we are heading for “the most historic wealth destruction ever”…
Eric, there are now more problem areas in the world, rather than stable situations. No major nation in the West can repay its debts. The same is true for Japan and most of the emerging markets. Europe is a failed experiment for socialism and deficit spending. China is a massive bubble, in terms of its stock markets, property markets and shadow banking system. Japan is also a basket case and the U.S. is the most indebted country in the world and has lived above its means for over 50 years.
So we will see twin $200 trillion debt and $1.5 quadrillion derivatives implosions. That will lead to the most historic wealth destruction ever in global stock, with bond and property markets declining at least 75 – 95 percent. World trade will also contract dramatically and we will see massive hardship across the globe.
So are they right?
We’ll know soon.
And of course they are not the only ones with a bad feeling about what is ahead. A recent WSJ/NBC News survey found that 65 percent of all Americans believe that the country is currently on the wrong track.
Also, Gallup’s Economic Confidence Index just plunged to the lowest level that we have seen so far in 2015…
Americans confidence in the US economy dropped sharply in July to its lowest level in 2015, according to a new US Economic Confidence Index rating released by Gallup on Tuesday.
“Gallup’s Economic Confidence Index declined to an average of —12 in July from —8 in June. This is the lowest monthly average since last October, and is a noticeable departure from the +3 average in January,” the polling company said.
Gallup said that “unsettled economic” conditions, including tumult in Chinese markets and uncertainty in Europe over a Greek debt deal, as well as US stock market volatility are factors driving lower confidence in the US economy.
These “bad feelings” are also reflected in the hard economic data. U.S. consumer spending has declined for three months in a row, and U.S. factory orders have fallen for eight months in a row.
The numbers are screaming that we are heading for another major recession.
But could it be possible that this is just another false alarm?
Could it be possible that the blind optimists are right and that everything will work out okay somehow?
20 Comments on "Financial Experts That Are Warning A Great Financial Crisis Is Imminent"
MrNoItAll on Wed, 5th Aug 2015 7:32 pm
There is a limit to what can be done to prop up the stock markets.
It seems likely that they’ve already pulled every trick out of the hat that they can think of.
Throwing debt at the problems we face is showing rapidly diminishing returns. But that’s all they’ve got left. It can’t go on forever.
It isn’t farfetched to imagine a scenario where the stock market suffers a severe correction before the end of this year.
The PTB have done a masterful job of keeping BAU duct taped and bubble-gummed together to get us this far.
But from a non-financial expert’s point of view, it feels like the overwhelming combined stresses of energy starvation, excessive debt and accelerating resource depletion are just about to crush this economy like a bug.
And along with it, this version of high tech industrial civilization.
Imagine squashing a big bug on the sidewalk. That’s the world as we knew it at some point in the not too distant future.
Davy on Wed, 5th Aug 2015 8:32 pm
MrN, I have been looking at this craziness for years now and I wonder how they do it but they keep on doing it. I feel there are still credit cycles even within a repressed market. I think the fed does to or why else would they keep talking about normalization. We also know bubbles deflate and always have. I see serious disequilibrium building in the system especially with China now faltering and commodities dropping. I also see lower confidence among the top echelon elite. The question for me is not if it is when and by how much. My doom meter wants to know while this be the system killing drop or the beginning of an overt bumpy descent. Collapse is a process. Is this the stage where collapse goes mainstream?
BC on Wed, 5th Aug 2015 8:36 pm
MrNo, the Fed can theoretically print unlimited amounts of fiat digital debt-money reserves that circulate primarily between the Fed’s balance sheet, TBTE banks’ balance sheets, Wall St.’s offshore shadow banks’ pass-through entities, and US Treasury.
The Fed will print and the TBTE banks will clear as much in reserves to buy US Treasury debt as is necessary to keep the equity and corporate bond markets propped up and the federal deficit financed to prevent a bear market and nominal GDP from contracting.
The TBTE banks are effectively gov’t-sponsored hedge funds that own via unspeakable amounts of leverage the stock market, which has become like a gov’t-sponsored utility that cannot be permitted to fail or to lose.
We have globalized militarist-imperialist rentier-socialism for the top 0.001-1%, and indirectly the next 9%, and precarious subsistence for most everyone else.
What was left of “capitalism” completely collapsed on paper, if you will, in 2008-09, and what remains is the emerging characteristics of a system in ongoing collapse, only it is being papered over, or digitally propped up, with leverage of 50-80:1 to bank capital (Ha!) and incessant “forward giddiness” from central banksters and expert data “management” by the gov’t technocrats and bureaucrats.
Thank goodness the rentier plunderers and their political hacks and technocrats have been so successful at the ruse for more than six years now; otherwise, the zombie apocalypse would have resulted in most of us becoming zombie food by now.
But, as in every complex system, there will come a point at which the costs of complexity will progressively exceed the benefits per capita and reach a sufficiently cumulative deficit that collapse is inevitable; it’s not a matter of if but when, but I’m not smart or connected enough to know when the Power Elite will direct that the plug be pulled.
“And so it goes . . .”
Makati1 on Wed, 5th Aug 2015 9:07 pm
One sure thing … everyday, we get closer to the cliff. But the cliff also gets higher and higher as time passes. Everyday, so far, is the day before Black Tuesday.
When ‘The Day’ finally arrives, the world will change and never be the same again. Perhaps the 1st world will no longer exist. But as I can do nothing to change or stop it, I’m enjoying the show. Are you?
ghung on Wed, 5th Aug 2015 9:44 pm
2015? I’m not betting on it. Still a lot of inertia in the system and major banks and corporations have cash on hand and plenty of fat to cut, especially in the west. True price discovery won’t be as slow as climate change, but it’ll take some time for it to sink in as most consumers are clueless and distracted. Most won’t get it ’til they get that pink slip.
I watched people pay $300k/acre for mountain view lots well into the 2008 crash, certain they would be worth $500k in a few years; most sold for $39k in the last few years. Matters little to the players, many who still have a lot of cash to bait the fools with.
Slow fucking train wreck. Pay attention; be patient and keep doing what you need to do. Owe nothing and get used to the idea of living hand-to-mouth. Sounds crazy,, I know.
MrNoItAll on Wed, 5th Aug 2015 9:47 pm
“the stock market… a gov’t-sponsored utility that cannot be permitted to fail or to lose.”
Ain’t it the truth. The media is making a big deal out of China pulling out all the stops to prevent their stock markets from melting down. US government does it too, they’re just a little more subtle in how they go about doing it.
I also believe that “the Power Elite will direct that the plug be pulled” at some point, rather than just letting things spiral out of control. They’re stupid if they aren’t planning on doing just that, at a time and place and in the manner of their own choosing. Just raise interest rates and stop generating new digital debt — that would put a stake right through the heart of BAU and leave it doing the funky chicken death jitters.
Or, we can wait until a few more of the emerging markets go belly up and descend into riots and chaos. Eventually, and I figure not too long from now, hardcore physical realities will overwhelm false confidence in the markets. It is already happening. When it reaches critical mass, OR when the Power Elite pull the plug, there won’t be much left of life as we knew it from that point on.
Davy on Wed, 5th Aug 2015 10:38 pm
G- “Slow fucking train wreck. Pay attention; be patient and keep doing what you need to do. Owe nothing and get used to the idea of living hand-to-mouth. Sounds crazy,, I know.” Yea G, I feel crazy with the so called normal people but it doesn’t bother me. I find myself tuning out the noise of the so called normal and paying attention to what matters.
I am patient now and more so than in the past. I think doomer sobriety does this. When I was first at the doom and prep thing in 05 I was bouncing off the walls. I was ready in 08 and got my clock cleaned because everything went back to normal. I had a few months of “I told you so” then back to the crazy dude doomer Davy with BAU back on track.
Now I am doing what I need to do. I am in slow steady preparations. Not because I think I will survive, that I have no idea of, no, this is just my nature. When I was around 15 to 18 I went through a survivalist phase. I would go out in the woods with a knife and flint and play around with the challenge. I used to track animals for discipline. I grew out of all that but it appears it is my nature to prep.
I do think about hand-to-mouth allot. In fact I think about it daily. The reality of what is ahead is more than about a crashing economy and climate change. It is going to be about hunger above all else. At the end of the day it is our hunger that must be satisfied.
I look around and see so much exposure to hunger. If we have a crash it is not only the overpopulation that will be an issue it is the economics of food distribution. That sounds boring but it is all important for a BAU based on efficiency and choice. We chose to be unsustainable and non-resilient because of efficiency that allowed our greed more for less. We will have food rotting in the fields and people starving because of this greed and hubris. It is these boring and simple details that are missed when we talk about so many colorful and exciting complex topics here on this board. In the end it is hunger friends. Get used to it.
paulo1 on Thu, 6th Aug 2015 7:29 am
Good summation, Davey. The 08 mess sobered me up big time too, but we had just sold our house in 07 so made out okay. In fact, we stumbled lucky into okay. However, I still continue to prep. This fall we will be digging 140 hills of spuds, plus all the other produce grown. Probably won’t eat 1/4 of them but it is about the same amount of work to grow just 40 hills. Firewood sheds look sweet. Going fishing this morning. Hopefully the sockeye are in. Yesterday, I caught a 20lbs spring….plus some pinks for smoking. Tomorrow we have a houseful coming for a barbecue…around 35 folks. Enjoying the good times while they are still good.
Davy on Thu, 6th Aug 2015 7:55 am
Wow, corns, WTF is up?
http://www.zerohedge.com/news/2015-08-06/job-cuts-soar-highest-september-2011-after-mass-army-terminations-highest-ytd-layoff
July there was a whopping 105,696, up 136% from the 44,842 job cuts in June, and the highest in nearly four years, or since September 2011, which the last time there were more than more than 100,000 layoffs.
http://www.zerohedge.com/news/2015-08-06/bad-debt-soars-35-china-government-set-fabricate-dismal-loan-data
bad loans jumped CNY322.2 billion in H1 to CNY1.8 trillion, a 36% increase. The NPL ratio was 1.82 as of June 30, up 22 bps on the year.
http://www.zerohedge.com/news/2015-08-05/commodities-its-2008-all-over-again
18 of the 22 components in the Bloomberg Commodity Index have dropped at least 20% from recent closing highs, meeting the common definition of a bear market.
joe on Thu, 6th Aug 2015 10:43 am
Was interested till I tried one of the links provided. It says the Lord told him a crash was coming.
A crash is coming. That’s how capitalism works, its supposed to be like that. The issue is in a globalised economy the highs are massive and the lows are massive. What’s that wave form like? That’s right.
A tsunami.
Society clawed put of the last recession because corporate socialism took over just as Benito Mussolini imagined. But with zero per cent interest rates there is no room to cut rates when basic economics takes hold. In fact it already started. Greece is making a deal it can never honor, China is literally rigging it’s own stock market, UK owns it’s biggest banks. Italy and Spain are living in the cocoon of the Euro and easy credit again. There really is no other choice but to carry on as before. Wait till TPP passes, then a recession will force a redeployment of industrial production to even less advanced economies in Asia and they will try to turn China into a consumer led economy demanding services, just like the developed economies. This idea is hinging on already developed economies continuing undisturbed, in a cycle of greater debt, forever, see? Eternal money, eternal wealth, none of it real, the last man can put out the cat and turn out the lights. There really is no plan guys, the only plan is to close your eyes and jump. That’s capitalism.
Davy on Thu, 6th Aug 2015 10:59 am
Joe, I agree on your capitalism point but there are no alternatives. Modern man is a jump in the dark. Any system as large as our current global system with overconsumption and overpopulation is a story with an ending. It does not matter what ideology you choose at our levels of population and consumption there is no future. Joe, why single out capitalism? Why not point fingers at modern industrial man as the guilty party.
Apneaman on Thu, 6th Aug 2015 11:20 am
Russia’s Energy Giant Implodes
http://wolfstreet.com/2015/08/05/how-russias-energy-giant-imploded/
apneaman on Thu, 6th Aug 2015 9:49 pm
I just enjoyed a good laugh from some of this guy’s comments regarding the economic collapse blog owner Michale Snyder. Kinda a battle of the prepper blogs.
Morons Unite!!!
“NOTHING “religious” is going to happen this September except the over-reaction of the indoctrinated few idiots that are trying to create “prophetic fulfillment” themselves. I’m hoping they’ve all got a suicide pact amongst themselves – the rest of us will be better off without them.”
http://survivalacres.com/blog/morons-unite/
apneaman on Thu, 6th Aug 2015 10:04 pm
Lord of the Lies: Who Will Be the Next Captain of the Titanic?
ROME IS BURNING. Literally
Mass drought
Mass wildfires
Mass extinctions
Mass shootings
Mass complacency
Mass Denial.
http://ponziworld.blogspot.ca/2015/08/lord-of-lies-who-will-be-next-captain.html?utm_content=buffer4bc18&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
Boat on Thu, 6th Aug 2015 10:42 pm
apneaman,
If you would spend equal time looking at history you would find Mass drought
Mass wildfires
Mass extinctions
Mass shootings
Mass complacency
Mass Denial.
pretty much BAU
apneaman on Thu, 6th Aug 2015 11:21 pm
Dat don’t float boat. It’s the speed and scale. It’s unprecedented. We know it because the story is written the earth itself. We use science to read it, like chemistry for example. The same chemistry that allows us to refine crude oil and other hydrocarbons and make PVC pipe and millions of other goodies. Sorry boat, can’t have it just one way. You often tout the wonders of modern man – all made possible by science, but when it tells a story you can’t handle you revert to denier/minimizer talking points. Stick around boat, I’ll get ya straightened out.
apneaman on Fri, 7th Aug 2015 2:17 am
Cost of fighting wildfires rising at alarming rate, officials say
http://www.ksby.com/story/29731103/cost-of-fighting-wildfires-rising-at-alarming-rate-officials-say
GregT on Fri, 7th Aug 2015 2:41 am
Denial, Boat. The imaginary world in which you believe that you live.
Get help buddy.
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