Iran sanctions: Middle East stock crash wipes £27bn off markets as Tehran enters oil war

Prospect of the Islamic Republic pumping an additional 500,000 barrels a day sends stock markets in Dubai and Saudi Arabia into tailspin

Stock markets across the Middle East saw more than £27bn wiped off their value as the lifting of economic sanctions against Iran threatened to unleash a fresh wave of oil onto global markets that are already drowning in excess supply.

All seven stock markets in the Gulf states tumbled as panic gripped traders. London shares are now braced for a second wave of crisis to hit when they open on Monday morning after contagion from China sent the FTSE 100 to its worst start in history last week.

Global recession in next two years is ‘most likely’ scenario, says economist

Willem Buiter, chief economist at Citi and former Bank of England policymaker, warns China’s woes are set to spread

A “hard landing” for China is likely to plunge the world economy into recession in the next two years, Willem Buiter, chief global economist at Citigroup and a former Bank of England policymaker, has said.

As the Federal Reserve in Washington prepares to decide whether to defy warnings of economic fragility and push up interest rates next week, a research note by Citi’s experts warns of a 55% probability of global recession.

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.

Greek Contagion Spreads As Several Italian Bank Stocks Failed To Open

This is how fragile the entire EU system is. If Greece sneezes, Italy coughs. The EU at best might be able to handle a Grexit, although that doesn’t look likely as stated here many times before. Look for the markets to go through a lot of turmoil but Greece is here to stay, whether its within the EU or a newly formed United States of Europe currently underway. Almost all experts agree it’s too strategically important to lose to the Sino-Soviet axis.

 

While things have normalized since the open thanks entirely to the SNB’s aggressive EUR-buying, CHF-selling intervention (good to see that central banks have read the BIS’ report and have learned from their prior intervention mistakes), earlier this morning we got a snapshot of what happens if and when the SNB, and then the ECB itself, finally lose control when as a result of the Greek crisis the contagion promptly spread a few hundred kilometers west to Italy where as the WSJ reported, “several Italian banks failed to start trading on Monday as fears over a Greek debt default induced many investors to shed peripheral stocks, including Italian, with banks suffering the most.”

This Financial “Seismograph” Signals A Monetary Earthquake

 

Stock markets in the U.S. are trading approximately 2% from their all-time highs, the German DAX has slightly retraced from its all-time highs, the Nikkei index in Japan has almost surpassed its 2000 highs in recent days, the Shanghai stock index used to be a laggard but is making up at an incredible pace (currently trading at 7-year highs). Indeed, it feels like nothing can go wrong.

We are not yet in bubble territory, and the market is not setting up for an implosion as it did in December 1999 or July 2008. However, we are in the midst of a monetary bubble, driven by an explosion of the monetary base and an implosion of interest rates. Paper assets, as opposed to hard assets, have been pumped up by the liquidity that is being funneled into the economic system and the markets.

RMB likely to enter IMF’s global reserve currencies list

Beijing is pushing for the inclusion of the renminbi as of one of the global reserve currencies of the International Monetary Fund and hopes to get a shot at the Special Drawing Rights system during the organization’s twice-a-decade review this year, reports Chinese financial news website fx678.com.

In China, Projects to Make Great Wall Feel Small

Dalian, China:  The plan here seems far-fetched – a $36 billion tunnel that would run twice the length of the one under the English Channel, and bore deep into one of Asia’s active earthquake zones. When completed, it would be the world’s longest underwater tunnel, creating a rail link between two northern port cities.

Throughout China, equally ambitious projects with multibillion-dollar price tags are already underway. The world’s largest bridge. The biggest airport. The longest gas pipeline. An $80 billion effort to divert water from the south of the country, where it is abundant, to a parched section of the north, along a route that covers more than 1,500 miles.

Such enormous infrastructure projects are a Chinese tradition. From the Great Wall to the Grand Canal and the Three Gorges Dam, this nation for centuries has used colossal public-works projects to showcase its engineering prowess and project its economic might.

What Do They Know? CME Implements Gold, Precious Metals Circuit Breakers Up To $400 Wide

With memorandum S-7258, titled “Implementation of New NYMEX/COMEX Rule Regarding Special Price Fluctuation Limits for Certain NYMEX and COMEX Metals Futures and Options Contracts” released moments ago by the CME Group, and set to become effective on December 21, 2014, and which seeks a 5 minute trading halt when “price movements in lead-month primary futures contracts result in triggering events”…  “as a measure that is consistent with promoting price discovery and cash-futures price convergence” in order to “deter sharp price movements that may, for example, be driven by illiquid central limit order books prevailing from time to time in otherwise liquid markets”, one wonders why now, and what does the CME know about upcoming volatility, or lack of liquidity, in the precious metals space that nobody else does (and does any of this have to do with the “berserk” algo test from November 25?)?

Oil price will fall to $70 US a barrel in 2015, Goldman Sachs says

World is producing more than it needs, thanks to boom in shale oil, bank says

One of the world’s leading investment banks says the benchmark price of North American oil is going to fall even further, to $70 US a barrel by next spring.

Investment bank Goldman Sachs slashed its forecast late Sunday night for both West Texas Intermediate (known as WTI) and Brent crude — the two most common types of oil used and sold in North America and Europe.

Goldman Sachs says WTI will go for $75 a barrel in the first three months of 2015. Brent, meanwhile, will change hands at $85 a barrel. Both forecasts are down $15 from what the bank was last expecting. And both are forecast to slip even lower in the second quarter — historically a seasonally low time for oil prices — before rebounding a little in the summer of 2015.

Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion

It’s relatively easy to portray yourself as a savvy and sucessful investor as well as being a ‘philantrophist’ when you bankroll the Presidency, have inside connections to the largest businesses in the world and enough money to almost destroy entire currencies such as the British Pound.

Soros Fund Management has doubled up a bet that the S&P 500  is headed for a fall.

Within Friday’s 13F filings news was the revelation that the firm, founded by legendary investor George Soros, increased a put position on the S&P 500 ETF by a whopping 154% in the fourth quarter, compared with the third. (A put or short position basically gives the owner the right to sell a security at a set price for a limited time, and in making such a bet, an investor generally believes the security is going to decline.)

‘Naive’ to Think Gold Isn’t Manipulated Too, Fund Manager John Butler Says

Gold and silver didn’t even begin to seriously sell off until about fifteen minutes afterthe big dollar index rally was done, so to pin yesterday’s precious metal price action on the currencies is laughable.

…

One of the other reasons that the sell-offs in the metal are hitting the shares so hard, is that mutual funds are feeling the effects of massive redemptions…and they have to sell whether they want to or not.  The markets are very illiquid…and this just makes matters worse.

But the one big question you should be asking yourself is this…”Who is buying all these shares that the precious metals investors are selling in such a panic?”  Think about it.  Somebody is…and whoever they are [and I have my suspicions] they have infinitely deep pockets…and are the very definition of “strong hands”.