China sought urgent advice from Fed to deal with 2015 market plunge

Confronted with a plunge in its stock markets last year, China’s central bank swiftly reached out to the U.S. Federal Reserve, asking it to share its playbook for dealing with Wall Street’s “Black Monday” crash of 1987.

The request came in a July 27 email from a People’s Bank of China official with a subject line: “Your urgent assistance is greatly appreciated!” Continue reading

America Is About to Import a Global Debt Crisis

A global debt crisis is coming. The warning signs have been emerging for months.

“This market instability is not going away. It’s been building for six years. It can only end one way – with a ‘Super Crash,'” Money Morning Global Credit Strategist Michael E. Lewitt told readers back on Sept. 8. “It’s not just China that’s creating this next (much worse) sell-off. It’s also the massive, $200 trillion global debt bubble that’s driving the world economy to its knees.” Continue reading

Global markets will only get more volatile and put UK lending at risk, Bank of England warns

The stock market turmoil that followed Black Monday could become a common occurence, with serious implications for bank lending in the UK

Modern technology and mathematical formulas mean dealers can execute split-second trades at higher volumes than ever before. But the downside to this is that when everyone uses similar algorithms, it results in a market with only buyers or only sellers, causing prices to swing violently, according to the Bank of England. Continue reading

Central banks can’t save the markets from a crash. They shouldn’t even try

https://i.guim.co.uk/img/static/sys-images/Guardian/Pix/pictures/2015/8/29/1440835575292/Cartoon-by-David-Simonds--009.jpg?w=700&q=85&auto=format&sharp=10&s=f14e4235d77db401def8e94d95fd3cc7

Financiers have come to expect central banks to help them out. Illustration: David Simonds for the Observer

 

Alarming data from China was met with a soothing hint about monetary policy. But treasuries cannot keep pumping cheap credit into a series of asset bubbles

Like children clinging to their parents, stock market traders turned to their central banks last week as they sought protection from the frightening economic figures coming out of China. Surely, they asked, the central banks would ward off the approaching bogeymen, as they had so many times since the 2008 crash.

The US Federal Reserve came up with the goods. William Dudley, president of the bank’s New York branch, hinted that the interest rate rise many had expected next month was likely to be delayed.

Continue reading

2015 Or 1987? Computerized Trading & “A Crash Is Coming” Or Rates Mean “Bull’s Not Over”

 

First 10 minutes of Wall Street Week episode from Friday October 16, 1987 just prior to the market crash on black Monday. Hosted by Louis Rukeyser, guests included Martin Zweig, Marry Farrell, Louis Holland and Allen Sinai. Continue reading

Marc Faber: 100% Chance of Global Recession

Faber’s bearish market calls have been followed closely since 1987 when he warned his clients to cash out before Black Monday.

And in a live interview on CNBC’s Fast Money Halftime Report, Faber again warned that economies of the world may be on the brink of a serious slowdown.

Faber indicated that while investors remain focused on Greece and Europe – other issues, bigger issues are looming. And they’re more threatening.

“As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.”

“I think we could have a global recession either in Q4 or early 2013.” When asked what were the odds, Faber replied, “100%.”However, in the near term Faber also sees potential for a market rally.

Faber said the bullish catalyst would be Greece exiting the EU.

It’s worth noting that Faber is talking hypothetically; he does not think Greece exits the EU in the near future.

“What I think will happen is that Germany will show more flexibility and issue more euro bonds.”

Full article: Marc Faber: 100% Chance of Global Recession (CNBC)