Signal Another Market Crash? – Market panic and financial turmoil is reigning supreme

Greetings,

All of the tricks have been played. Now the dominoes are starting to fall. The fix is in and the collapse is on.The sword within and the sword without!

Market panic and financial turmoil is reigning supreme. With massive deficits as far as the eyes can see ,and with her debt load, which is the largest debt ever accumulated in the history of the world, the end is now in sight and it doesn’t look very pretty for America.

Prophecy must and is being fulfilled. Modern Babylon is falling. There is nothing that will prevent its demise. He has done too much evil…”He is like a criminal who has committed a crime and he hopes for mercy from those whom he has committed the crime against! We cannot escape our doom when it comes, teaches the Holy Qur’an, and the Bible.

They showed no mercy at all to the Black slave. They treated the Black slave worse than any human being has ever been treated. They continue to do so, in the face of divine judgment.

They remind you of the parable of “The Rich Man and the Poor Man.” As long as the rich man enjoyed luxury, he cared nothing about luxury for his slave, Lazarus.

Then, at last the rich man fell into poverty and he was unable to get help, even for himself.

The Bible says of the poor Black slave that “none helped them.” Now the rich man gets in the place of his once slave. The rich man can witness how it feels to be a poor man.”–Chp.61(tfoa)

Happy Black Thursday
Do Tumbling Buybacks Signal Another Market Crash?

By Mike Whitney

“Frankly, we are so far off the economic rails, the locomotive is stuck in a swamp and the trailing cars are piling up around it.” Anonymous, Comments line, Naked Capitalism

October 23, 2014 “ICH” – “Counterpunch” – Since the end of the recession in 2009, investors have borrowed a record amount of money to finance their stock acquisitions. According to the Financial Times, margin debt on the New York Stock Exchange (NYSE) peaked in February, 2014 at $466 billion and has only recently dipped slightly lower. That’s $85 billion more than 2007 at the peak of the bubble. (Below: Margin debt tends to trace the trajectory of the markets fairly closely, although it’s a poor indicator of a market “top”.)

When stocks start see-sawing like they did last week, it’s usually a sign that over-extended investors are dumping their stocks to meet margin calls. The same thing happened in the run-up to the Crash of 1929. Stocks dropped sharply in late October which forced deeply-indebted investors to unload their holdings at firesale prices. The falling prices triggered a panic that sent stocks into freefall wiping out billions of dollars, crashing the markets, and paving the way for the Great Depression. Here’s a brief summary of what happened:

“On September 3, the market dropped sharply only to rise and then drop again. It was like tremors before a big earthquake but nobody heeded the warning. The market had sagged temporarily before, but it always came back stronger. The market dipped sharply again on October 4 (and) October 21 saw an avalanche of selling as many tried to salvage something from their loss. On October 24 — Black Thursday — the panic took on a life of its own as selling orders overwhelmed the Exchange’s ability to keep up with the transactions…

Wall Street financiers tried to inspire confidence by buying as many shares as they could. It worked — temporarily. (But) on Monday the panic started again, and then came Black Tuesday — October 29. The panic on the Exchange floor changed to bedlam. According to one observer, “They hollered and screamed, they clawed at one another’s collars. It was like a bunch of crazy men. Every once in a while … you’d see some poor devil collapse and fall to the floor.” This was the Crash, although few could see it at the time… Thirty billion dollars had been lost — more than twice the national debt. The nation reeled, and slipped into the depths of the Great Depression. ” (The Wall Street Crash, 1929, Eyewitness to History)

Unsurprisingly, the banks were at the center of that fiasco too, as was their principle agent, the Federal Reserve. In fact, the International Monetary Fund just issued a scathing rebuke of the Fed’s policies saying that zero rates, which have been in effect for over 5 years, have put the financial system at risk again. Here’s more on the IMF report from the Guardian:

“Accommodative policies aimed at supporting the recovery and promoting economic risk taking have facilitated greater financial risk taking,” the IMF said. As evidence it pointed to rising asset prices, smaller premiums on riskier investments and the lack of volatility in financial markets…”

The IMF said there was a trade-off between the upside economic benefits of low interest rates and the money creation process known as quantitative easing and the downside financial stability risks… “market and liquidity risks have increased to levels that could compromise financial stability if left unaddressed.” (IMF warns period of ultra-low interest rates poses fresh financial crisis threat, Guardian)

In other words, fixing the price of money at zero for years-on-end, increases financial instability while doing nothing for the real economy. The IMF is basically admitting that the Fed has created the conditions for another meltdown.

And the excessive risk taking is not limited to margin debt either. It’s visible in financial assets across the board. Take stock buybacks, for example. Buybacks, which add nothing to a company’s productivity or real value, merely juice stock prices so shareholders and executives can cream bigger profits for themselves. What most people don’t know about buybacks is that the fatcat corporate bosses are not recycling profits into share purchases, but taking advantage of the low rates to load on more debt. Check out this eyepopping chart at Zero Hedge which shows the lethal symmetry between corporate borrowing and stock buybacks:……MORE HERE

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