Alan Greenspan: Investors should prepare for the worst

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Alan Greenspan says the party’s over on Wall Street.

The former Federal Reserve chairman who famously warned more than two decades ago about “irrational exuberance” in the stock market doesn’t see equity prices going any higher than they are now.

“It would be very surprising to see it sort of stabilize here, and then take off,” Greenspan said in an interview with CNN anchor Julia Chatterley. Continue reading

How Wall Street’s ‘fear gauge’ is being rigged, according to one whistleblower

Cboe’s VIX products is the target of a whistleblower (Getty Images)

 

One of the most popular measures of volatility is being manipulated, charges one individual who submitted a letter anonymously to the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The letter makes the claim to regulators that fake quotes for the S&P 500 index are skewing levels of the Cboe Volatility Index which reflects bearish and bullish options bets 30-days in the future on the S&P 500 to gauge implied stock-market volatility (see excerpt from the letter below).

The flaw allows trading firms with sophisticated algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital. This market manipulation has led to multiple billions in profits effectively taken away from institutional and retail investors and cashed in by unethical electronic option market makers. Continue reading

Spain’s hemorrhaging Banco Popular bought by Santander for €1

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Santander has bought Banco Popular for €1 [Getty]

 

BANKING heavyweight Santander has agreed to buy toxic lender Banco Popular for just €1, saving the giant from total collapse.

Spain’s biggest bank must now inject around £6.1billion worth of cash into the bankrupt lender to cover its book of disastrous property loans.

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Warning Signs a Stock Market Crash Is Coming

The Dow has soared 13% since Election Day, and just last week (Feb. 10), all three major indexes closed at all-time highs. The “Trump Rally” has been great for stocks, but some observers are starting to wonder if soaring highs mean a stock market crash is coming.

No one can predict a stock market crash with 100% certainty. But we want our readers to be as informed as possible about what could happen in the market.

That’s why we’re looking into historic stock market crashes to identify warning signs that can be used now. Continue reading

All Roads Lead to the Dollar

 

COMMENT: Marty; I have attended every conference since 2011. You have really opened my eyes and you have to be blind to not see that you have called everything trend from the decline in gold, rally in the Dow, collapse of Europe, the rise in the dollar, and the uptick in war/civil unrest not to mention your political forecasting. You should be hailed from every podium and the reason you are not is obvious. The conclusions you force upon the rest to see is against their own self-interest. All roads lead only to the dollar as you have said. Continue reading

Deutsche Bank seeks to reassure investors as shares slide

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Stock drops as much as 7% sparking sell-off in European banks

Deutsche Bank sought to convince investors that it did not need a government bailout and had no plans for a capital increase on Monday morning, even as its shares fell to their lowest level in more than 20 years.

Shares in Germany’s biggest bank sank by as much as 6.9 per cent to €10.63, the lowest since the lender began trading on the Xetra exchange in 1992, although it traded below that level in the early 1980s. The stock has fallen more than 50 per cent so far this year.

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Ireland “Especially Exposed” To “International Shocks” Warns Central Bank

Ireland remains especially exposed to another financial shock because of the extremely high levels of public and private debt, the open nature of the economy, and Brexit, Irish Central Bank Governor Philip Lane has warned in a pre-budget letter to Minister for Finance, Michael Noonan.

“Ireland is especially exposed due to the legacy of high public and private debt levels, the sensitivity of small, highly-open economies to international shocks and Brexit-related vulnerabilities,” Ireland’s Central Bank Governor said.

The letter was covered in the Irish Independent, Irish Times and Irish Examiner. This is something we covered in our interview with Max Keiser last week – see here. Continue reading

Deutsche Bank’s Lehman Behavior Signals a Looming Stock Market Crash

Yesterday, Deutsche Bank AG‘s (NYSE: DB) co-CEO John Cryan released a surprise memo saying its balance sheet “remains absolutely rock-solid.” His assertion comes amid fears that the investment bank is unstable (an understatement) – which could be emblematic of a broader European bank fueled stock market crash.

Releasing a forced statement to the worrying public is something Lehman Brothers did just before it collapsed in 2008. The now-defunct corporate banking giant assured investors that it had enough liquidity to weather the financial crisis in 2008.

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Greek stocks fall sharply on banking sector meltdown

Athens (AFP) – Greek stocks tumbled on Monday to close nearly eight percent lower, with bank shares losing almost a quarter of their market value amid concerns over the future of government reforms.

The general index on the Athens stock exchange closed down 7.9 percent at 464.23 points — a 25-year-low — while banks suffered a 24.3-percent average drop.

Top companies such as the Public Power Corporation, the Piraeus Port Authority and prominent construction firms lost between four and and 12.5 percent. Continue reading

Marc Faber: The Global Economy Is Entering An Epic Slump

 

 

He predicts the next year is going to be an especially bruising one for investors, and recommends a combination of diversification and defense for those with financial capital to protect:


We have a slowdown practically everywhere and if you take out the fudging of statistics, the economy for the median household everywhere in the world is not doing particularly well. If the global economy were doing so fantastically well, how would it be that commodities collapsed to the extent that they have declined? Or how would it be that the currencies of American markets and some of them have actually declined by more than 50 percent against the U.S. dollar in the last three years. How would this happen? So I do not believe that we have a healing of the global economy. On the contrary, I believe that the global economy is slowing down and that essentially equity markets are not particularly attractive. Continue reading

China pays $144bn to bolster stock market

When there’s no other investor to turn the market around other than the government, which nine times out of ten compounds the problem, you know it’s done.

 

China has spent $144 billion (€132bn) to bolster the country’s fragile stock market since June, Goldman Sachs has estimated, but still has more than that amount in reserve to deploy if stocks resume their sharp descent.

The coalition of state financial institutions – the “national team” – has a war chest of roughly $322 billion at its disposal to support the market, the bank believes.

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Panic as China suffers ANOTHER stock market crash with largest shares fall in EIGHT years

INVESTORS in Britain and around the world have been sent into panic today after China’s stocks plummeted by 8.5 per cent – the largest one-day fall in almost eight years.

The FTSE 100 was in the red this morning after share indices in the world’s second-largest economy suffered their worst drop since 2007.

The fall in China is part of a wider slump in the country’s stocks that first began in mid-June, amid fears the China’s finance bubble had burst.

Previously China’s indices had almost doubled in the space of just a year.

The country’s Government had managed to briefly calm nerves with a raft of support measures, but today investors appeared to have lost all faith in official efforts to prop up values. Continue reading

Get ready for a ‘fire sale’ of Greek islands

The upmarket property company says in its latest Islands Report: “As the long-term ramifications of Greece’s financial bailout play out more fire-sales of Greek islands are expected.”

About 20 Greek islands were put on the market last year, and Knight Frank expects more to follow as the implications of the property tax begin to hit home for more owners. Continue reading

China Destroyed Its Stock Market in Order to Save It

When you run out of magical intervention tricks in your bag the best way to handle the inevitable is a controlled demolition. Although the crisis is far from over, it alleviates the pain for the short-term time being. You know the situation is dire when the Communist Capitalists force investors to stay in by banning all selling of stocks for months, forcing you to shoulder the loss, in order to stem the tide.

 

Last week, China destroyed its stock market in order to save it. Faced with a crash in share prices from a bubble of its own making, the Chinese government intervened ruthlessly, and recklessly, to turn those prices around. Its heavy-handed approach seemed to work, for the moment, but only by severely damaging far more important goals and ambitions.Prior to the crash, China’s stock market had enjoyed a blissful disconnect from reality. As China’s economy slowed and corporate profits declined, share prices soared, nearly tripling in just 12 months. By the peak, half the companies listed on the Shanghai and Shenzhen exchanges were priced above a preposterous 85-times earnings. It was a clear warning flag — one that Chinese regulators encouraged people to ignore. Then reality caught up.

At first, when prices began to fall, the central bank responded by cutting interest rates and bank reserve requirements — measures to inject more money that had never failed to juice the market. But prices continued to fall. Then the government rallied the major brokerages to form a $19 billion fund to buy shares and waded directly into the market to buy stocks too. A few stocks rose, but most fell even further. Continue reading

Greek turmoil set to shake global markets out of complacency as sell-off looms

A Greek exit from the euro is now a “base case” scenario for economists and is set to trigger a flight to safety for nervy investors

Financial markets were braced for their worst period of turmoil since the height of the eurozone crisis three years ago, after Greeks chose to overwhelmingly reject the bail-out terms of their creditors, throwing the country on a collision course with the eurozone.

The prolonged period of uncertainty is expected to roil European equities and see investors flock to safe haven assets such as US and German government bonds.

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