CEO exits after mutual fund implodes

[mick silver]

CEO exits after mutual fund implodes by Matt Egan (http://money.cnn.com/author/matt-egan/index.html) @mattmegan5 (https://twitter.com/intent/user?screen_name=mattmegan5) December 14, 2015: 9:27 AM ET





http://i2.cdn.turner.com/money/dam/assets/151211155018-junk-bonds-780x439.jpg



The CEO of the risky junk bond mutual fund that blew up last week has stepped down. The Third Avenue Focused Credit Fund focused on the riskiest corners of the junk bond market, investing in distressed debt of companies that were close to defaulting on their loans and ones that already had. Last week the fund announced it is liquidating and blocked investors from getting their money back.





Its implosion is a very rare event in the normally-sleepy mutual fund industry and highlights the turmoil rippling through the riskiest parts of the bond market.
The event also raises questions about whether Third Avenue's focus on extremely risky and difficult to trade assets was really appropriate given the fact that mutual funds promise investors the ability to take their money out whenever they wish.
"It is irresponsible to run the fund in such a way that they can't meet redemptions," said Leo Acheson, an analyst at Morningstar.
Third Avenue responded to the criticism on Monday by announcing longtime CEO David Barse had left. The firm said it will now be led by a team of executives.
The Third Avenue liquidation also spooked already-rattled investors who were left wondering if there are more ailing funds in the horizon. The Dow tumbled more than 300 points (http://money.cnn.com/2015/12/11/investing/stocks-oil-santa-claus-rally/index.html?iid=EL) on Friday.
"Is this just the tip of the iceberg? Are there more funds having similar distress? These things tend to snowball," said Michael Block, chief market strategist at Rhino Trading.
Related: Warning: Half of oil junk bonds could default (http://money.cnn.com/2015/12/10/investing/oil-prices-bond-defaults/index.html?iid=EL)
Mutual fund blocks investors
Third Avenue Management told investors on Wednesday it is liquidating and blocking further redemptions after months of heavy losses and elevated requests from investors for their money back. The fund shrank from $2.1 billion in July to just $788 million on Thursday, according to Morningstar.
Third Avenue said it will return a small portion of its assets to investors next week and then will focus on unwinding its investments. The fund anticipates it will take a year or more to fully liquidate.
The mutual fund says it doesn't want to resort to firesale prices just to meet redemptions.
In fact, it blamed its troubles on the fast pace of redemptions combined with the lack of liquidity in the fixed-income markets.
It's important to understand this was not your run-of-the-mill mutual fund that invested in junk-rated bonds.
It held illiquid bonds of some companies that had undergone restructuring in the last 18 months. This type of distressed debt has gotten hammered far more this year than junk bonds.
"This seems to be a pretty unique situation. This fund is definitely an outlier," said Acheson.
Related: Carl Icahn warns: 'danger ahead' (http://money.cnn.com/2015/09/28/investing/carl-icahn-stock-market-bubble/index.html?iid=EL)
Trouble in junk bonds
Still, the Third Avenue liquidation is the latest sign of trouble in the riskiest parts of the junk-bond market amid plunging prices for oil, copper, iron ore and other raw materials. (http://money.cnn.com/2015/12/09/investing/oil-prices-metals-crash-crisis-levels/index.html?iid=EL)
More companies have defaulted on their debt this year than at any point since late 2009 (http://money.cnn.com/2015/12/02/investing/defaults-bankruptcies-2009-great-recession/?iid=EL), according to Standard & Poor's. A big driver has been turmoil in the oil patch. S&P warned that about half of energy junk bonds are distressed (http://money.cnn.com/2015/12/10/investing/oil-prices-bond-defaults/?iid=EL), meaning there is a real chance they default.
"We're definitely seeing a lot of stress," said Ashish Shah, head of credit at AB, formerly known as AllianceBernstein. He said energy junk bonds are yielding nearly 14%, compared with just 2.1% for 10-year Treasury bonds, which are seen as risk free.
Related: Defaults soar to recession levels (http://money.cnn.com/2015/12/02/investing/defaults-bankruptcies-2009-great-recession/index.html?iid=EL)
Investors yank cash ahead of the Fed
None of that is being helped by the Federal Reserve, which is expected to raise interest rates next week for the first time in nearly a decade. The build-up to the move is easing investor appetite for risky assets.
Investors yanked $3.8 billion from high-yield bonds in the past week, the largest outflows in 15 weeks, according to Bank of America Merrill Lynch.
Related: Oil is the Grinch stealing the Santa Claus rally (http://money.cnn.com/2015/12/11/investing/stocks-oil-santa-claus-rally/index.html?iid=EL)


CNNMoney (New York) First published December 11, 2015: 4:26 PM ET

[EE_]

edit:


CEO exits (with his golden parachute) after mutual fund implodes by Matt Egan (http://money.cnn.com/author/matt-egan/index.html) @mattmegan5 (https://twitter.com/intent/user?screen_name=mattmegan5) December 14, 2015: 9:27 AM ET





http://i2.cdn.turner.com/money/dam/assets/151211155018-junk-bonds-780x439.jpg



The CEO of the risky junk bond mutual fund that blew up last week has stepped down. The Third Avenue Focused Credit Fund focused on the riskiest corners of the junk bond market, investing in distressed debt of companies that were close to defaulting on their loans and ones that already had. Last week the fund announced it is liquidating and blocked investors from getting their money back.





Its implosion is a very rare event in the normally-sleepy mutual fund industry and highlights the turmoil rippling through the riskiest parts of the bond market.
The event also raises questions about whether Third Avenue's focus on extremely risky and difficult to trade assets was really appropriate given the fact that mutual funds promise investors the ability to take their money out whenever they wish.
"It is irresponsible to run the fund in such a way that they can't meet redemptions," said Leo Acheson, an analyst at Morningstar.
Third Avenue responded to the criticism on Monday by announcing longtime CEO David Barse had left. The firm said it will now be led by a team of executives.
The Third Avenue liquidation also spooked already-rattled investors who were left wondering if there are more ailing funds in the horizon. The Dow tumbled more than 300 points (http://money.cnn.com/2015/12/11/investing/stocks-oil-santa-claus-rally/index.html?iid=EL) on Friday.
"Is this just the tip of the iceberg? Are there more funds having similar distress? These things tend to snowball," said Michael Block, chief market strategist at Rhino Trading.
Related: Warning: Half of oil junk bonds could default (http://money.cnn.com/2015/12/10/investing/oil-prices-bond-defaults/index.html?iid=EL)
Mutual fund blocks investors
Third Avenue Management told investors on Wednesday it is liquidating and blocking further redemptions after months of heavy losses and elevated requests from investors for their money back. The fund shrank from $2.1 billion in July to just $788 million on Thursday, according to Morningstar.
Third Avenue said it will return a small portion of its assets to investors next week and then will focus on unwinding its investments. The fund anticipates it will take a year or more to fully liquidate.
The mutual fund says it doesn't want to resort to firesale prices just to meet redemptions.
In fact, it blamed its troubles on the fast pace of redemptions combined with the lack of liquidity in the fixed-income markets.
It's important to understand this was not your run-of-the-mill mutual fund that invested in junk-rated bonds.
It held illiquid bonds of some companies that had undergone restructuring in the last 18 months. This type of distressed debt has gotten hammered far more this year than junk bonds.
"This seems to be a pretty unique situation. This fund is definitely an outlier," said Acheson.
Related: Carl Icahn warns: 'danger ahead' (http://money.cnn.com/2015/09/28/investing/carl-icahn-stock-market-bubble/index.html?iid=EL)
Trouble in junk bonds
Still, the Third Avenue liquidation is the latest sign of trouble in the riskiest parts of the junk-bond market amid plunging prices for oil, copper, iron ore and other raw materials. (http://money.cnn.com/2015/12/09/investing/oil-prices-metals-crash-crisis-levels/index.html?iid=EL)
More companies have defaulted on their debt this year than at any point since late 2009 (http://money.cnn.com/2015/12/02/investing/defaults-bankruptcies-2009-great-recession/?iid=EL), according to Standard & Poor's. A big driver has been turmoil in the oil patch. S&P warned that about half of energy junk bonds are distressed (http://money.cnn.com/2015/12/10/investing/oil-prices-bond-defaults/?iid=EL), meaning there is a real chance they default.
"We're definitely seeing a lot of stress," said Ashish Shah, head of credit at AB, formerly known as AllianceBernstein. He said energy junk bonds are yielding nearly 14%, compared with just 2.1% for 10-year Treasury bonds, which are seen as risk free.
Related: Defaults soar to recession levels (http://money.cnn.com/2015/12/02/investing/defaults-bankruptcies-2009-great-recession/index.html?iid=EL)
Investors yank cash ahead of the Fed
None of that is being helped by the Federal Reserve, which is expected to raise interest rates next week for the first time in nearly a decade. The build-up to the move is easing investor appetite for risky assets.
Investors yanked $3.8 billion from high-yield bonds in the past week, the largest outflows in 15 weeks, according to Bank of America Merrill Lynch.
Related: Oil is the Grinch stealing the Santa Claus rally (http://money.cnn.com/2015/12/11/investing/stocks-oil-santa-claus-rally/index.html?iid=EL)


CNNMoney (New York) First published December 11, 2015: 4:26 PM ET

[Horn]

Sounds as if there's a market crash going on and nobody is being made aware of it.

[mick silver]

look like the rich have done started jumping ship

[mick silver]

Guess What Happened The Last Time Junk Bonds Started Crashing Like This? Hint: Think 2008
http://theeconomiccollapseblog.com/wp-content/themes/atahualpa/images/icons/user.gif By Michael Snyder, on December 8th, 2015

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http://theeconomiccollapseblog.com/wp-content/uploads/2015/12/Thumbs-Down-Public-Domain-460x475.jpg (http://theeconomiccollapseblog.com/archives/guess-what-happened-the-last-time-junk-bonds-started-crashing-like-this-hint-think-2008/thumbs-down-public-domain)
The extreme carnage that we are witnessing in the junk bond market right now is one of the clearest signals yet that a major U.S. stock market crash is imminent. For those that are not familiar with “junk bonds”, please don’t get put off by the name. They aren’t really “junk”. They simply have a higher risk and thus a higher return than other bonds of the same type. And yesterday (http://theeconomiccollapseblog.com/archives/guess-what-happened-the-last-time-the-price-of-oil-plunged-below-38-dollars-a-barrel), I explained why I watch them so closely. If stocks are going to crash, you would expect to see a junk bond crash first. This happened in 2008, and it is happening again right now. On Monday, a high yield bond ETF known as JNK crashed through the psychologically important 35.00 barrier for the very first time since the last financial crisis. On Tuesday, high yield bonds had their worst day in three months, and JNK plummeted all the way down to 34.44 (http://finance.yahoo.com/echarts?s=JNK+Interactive#{%22range%22:%22max%22,% 22allowChartStacking%22:true}). When I saw this I was absolutely stunned. This is precisely the kind of junk bond crash that I have been anticipating that we would soon witness.
Normally, stocks and junk bonds track one another very closely, but just like before the 2008 crash, they have become decoupled (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151208_EOD11.jpg) in recent months. Anyone that even has an elementary understanding of the financial world knows that this cannot continue indefinitely. And when they start converging once again, the movement could be quite violent.
When I chose to use the word “carnage” to open this article, I was not exaggerating what is going on in the junk bond market one bit. On Tuesday evening, Jeffrey Gundlach (http://www.cnbc.com/2015/12/08/reuters-america-update-1-doublelines-gundlach-says-real-carnage-in-junk-bonds-ahead-of-fed.html) used the exact same word to describe what is happening…

Jeffrey Gundlach, the widely followed investor who runs DoubleLine Capital, said on a webcast on Tuesday that the junk bond market has come under severe selling pressure ahead of the Federal Reserve’s policy meeting next week.
“We are looking at real carnage in the junk bond market,” Gundlach said. Gundlach also said it was too early to buy high-yield junk bonds and energy debt securities. “I don’t like things when they go down every single day.”
Sometimes a chart can be extremely helpful in understanding what is going on. The following chart was posted by Zero Hedge (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151208_ccc.jpg) on Tuesday, and it shows that yields on the riskiest junk bonds are heading into the stratosphere…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/12/High-Yield-Debt-from-Zero-Hedge-460x202.jpg (http://theeconomiccollapseblog.com/archives/guess-what-happened-the-last-time-junk-bonds-started-crashing-like-this-hint-think-2008/high-yield-debt-from-zero-hedge)
And for those that are not familiar, it is important to note that when yields go up, bond prices go down. So the chart above is what a “crash” looks like.
Another “leading indicator” that I watch is the behavior of Dow Transports.
Dow Transports started crashing before the Dow Jones Industrial Average did back in August, and now it is happening again (http://www.zerohedge.com/news/2015-12-08/trannies-trounced-plunge-most-black-monday)…

Dow Transports are in reverse. Down over 3% today, the biggest drop since the Black Monday collapse, Trannies are now below the lows of the Bullard bounce from October 2014 and down a shocking 16% in 2015. This would be the first four-quarters-in-a-row drop in Transports since 1994 and the worst year since 2008…
In addition, we are also seeing trouble signs erupt at major financial institutions just like we did during the run up to the 2008 crash. For example, I have been concerned about Morgan Stanley for quite a while, and on Tuesday we learned that they have just laid off more than a thousand workers (http://money.cnn.com/2015/12/08/investing/morgan-stanley-cuts-1200-jobs/index.html?iid=hp-stack-dom)…

Struggling Morgan Stanley slashed 1,200 jobs around the world in recent days, a person familiar with the matter told CNNMoney.
The cuts were broad-based and eliminated 25% of the positions within the fixed income and commodities businesses, the person said. Those divisions are grappling with tumbling trading revenue and shrinking fees.
Morgan Stanley also eliminated about 730 back-office jobs like human-resources and IT positions.
Virtually all of the things that we would expect to see just prior to a 2008-style stock market crash are happening right now.
If just two or three leading indicators were flashing red, we could have a really good debate about what they might mean.
But the fact that virtually all of the numbers are screaming a warning at us should mean that the debate is over. Anyone with an open mind should be able to very clearly see what is coming next.
Very quickly, let me give you just 10 signs that indicate that we are right on the precipice of a major recession and a very substantial financial downturn…
1. Global GDP growth has gone negative for the first time since 2009 (http://www.businessinsider.com/new-recession-might-be-around-the-corner-2015-12).
2. Corporate earnings growth has turned negative (http://www.businessinsider.com/new-recession-might-be-around-the-corner-2015-12).
3. S&P 500 net profit margins are steeply declining (http://www.businessinsider.com/new-recession-might-be-around-the-corner-2015-12). According to Tony Sagami (http://www.businessinsider.com/new-recession-might-be-around-the-corner-2015-12), “since 1973, there has been only one 60 bps decline in S&P 500 net profit margin that didn’t lead to a recession.”
4. In October, U.S. imports of goods declined by 6.6 percent (http://wolfstreet.com/2015/12/07/debacle-in-nonpetroleum-exports-manufacturing-covered-up-by-oil/) on a year over year basis.
5. In October, U.S. exports of goods declined by 10.4 percent (http://wolfstreet.com/2015/12/07/debacle-in-nonpetroleum-exports-manufacturing-covered-up-by-oil/) on a year over year basis.
6. U.S. manufacturing is contracting at the fastest pace that we have seen since the last recession (http://theeconomiccollapseblog.com/archives/global-crisis-goldman-sachs-says-that-brazil-has-plunged-into-an-outright-depression).
7. Corporate debt defaults have risen to the highest level that we have seen since the last recession (http://money.cnn.com/2015/12/02/investing/defaults-bankruptcies-2009-great-recession/index.html?iid=hp-stack-dom).
8. Credit card numbers that were recently released show that holiday sales have gone negative for the first time since the last recession (http://www.zerohedge.com/news/2015-12-02/credit-card-data-reveals-first-holiday-spending-decline-recession).
9. The velocity of money in the United States has dropped to the lowest level ever recorded (http://theeconomiccollapseblog.com/archives/global-crisis-goldman-sachs-says-that-brazil-has-plunged-into-an-outright-depression).
10. Of the 93 largest stock market indexes in the entire world, 47 of them (http://theeconomiccollapseblog.com/archives/jp-morgan-and-citigroup-agree-that-the-u-s-economy-is-steamrolling-toward-a-recession) (slightly more than half) have already plunged at least 10 percent year to date.
Just like in 2008, other global financial markets are imploding ahead of a U.S. collapse.
On Tuesday, the Dow Jones Industrial Average was down another 162 points, but we are still within 1000 points of the market peak that was set earlier this year. We are still in far better shape than most of the rest of the world, but that will soon change.
I can’t think of a single leading indicator that is telling us that everything is going to be okay. All of the numbers are pointing to major trouble ahead. So I hope that you are being smart and doing what you can to get prepared while there is still time
http://theeconomiccollapseblog.com/archives/guess-what-happened-the-last-time-junk-bonds-started-crashing-like-this-hint-think-2008

[mick silver]

12 Ways The Economy Is Already In Worse Shape Than It Was During The Depths Of The Last Recession (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession)
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Twelve-Public-Domain-460x305.jpg (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/twelve-public-domain)Did you know that the percentage of children in the United States that are living in poverty is actually significantly higher than it was back in 2008? When I write about an “economic collapse”, most people think of a collapse of the financial markets. And without a doubt, one is coming very shortly (http://theeconomiccollapseblog.com/archives/the-economic-collapse-blog-has-issued-a-red-alert-for-the-last-six-months-of-2015), but let us not neglect the long-term economic collapse that is already happening all around us. In this article, I am going to share with you a bunch of charts and statistics that show that economic conditions are already substantially worse than they were during the last financial crisis in a whole bunch of different ways. Unfortunately, in our 48 hour news cycle world, a slow and steady decline does not produce many “sexy headlines”. Those of us that are news junkies (myself included) are always looking for things that will shock us. But if you stand back and take a broader view of things, what has been happening to the U.S. economy truly is quite shocking. The following are 12 ways that the U.S. economy is already in worse shape than it was during the depths of the last recession…
#1 Back in 2008, 18 percent of all Americans kids were living in poverty. This week, we learned that number has now risen to 22 percent (http://www.dailymail.co.uk/news/article-3169369/More-children-live-poverty-today-2008-recession-Nearly-three-million-extra-U-S-youngsters-come-impoverished-families.html)…

There are nearly three million more children living in poverty today than during the recession, shocking new figures have revealed.
Nearly a quarter of youngsters in the US (22 percent) or around 16.1 million individuals, were classed as living below the poverty line in 2013.
This has soared from just 18 percent in 2008 – during the height of the economic crisis, the Casey Foundation’s 2015 Kids Count Data Book reported.
#2 In early 2008, the homeownership rate in the U.S. was hovering around 68 percent. Today, it has plunged below 64 percent. Incredibly, it has not been this low in more than 20 years. Just look at this chart – the homeownership rate has continued to plummet throughout Obama’s “economic recovery”…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Homeownership-Rate-2015-460x306.png (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/homeownership-rate-2015-2)
#3 While Barack Obama has been in the White House, government dependence has skyrocketed to levels that we have never seen before. In 2008, the federal government was spending about 37 billion dollars (https://research.stlouisfed.org/fred2/series/TRP6001A027NBEA) a year on the federal food stamp program. Today, that number is above 74 billion dollars (https://research.stlouisfed.org/fred2/series/TRP6001A027NBEA). If the economy truly is “recovering”, why is government dependence so much higher than it was during the last recession?
#4 On the chart below, you can see that the U.S. national debt was sitting at about 9 trillion dollars when we entered the last recession. Since that time, the debt of the federal government has doubled. We are on the exact same path that Greece has gone down, and what you are looking at below is a recipe for national economic suicide…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Presentation-National-Debt-460x306.png (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/presentation-national-debt-2)
#5 During Obama’s “recovery”, real median household income has actually gone down quite a bit. Just prior to the last recession, it was above $54,000 per year, but now it has dropped to about $52,000 per year…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Median-Household-Income-460x306.png (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/median-household-income)
#6 Even though our incomes are stagnating, the cost of living just continues to rise steadily. This is especially true of basic things that we all purchase such as food. As I wrote about earlier this year, the price of ground beef in the United States has doubled (http://theeconomiccollapseblog.com/archives/the-price-of-ground-beef-has-doubled-since-the-last-financial-crisis) since the last recession.
#7 In a healthy economy, lots of new businesses are opening and not that many are being forced to shut down. But for each of the past six years (http://themostimportantnews.com/archives/economic-death-spiral-american-businesses-dying-starting), more businesses have closed in the United States than have opened. Prior to 2008, this had never happened before in all of U.S. history.
#8 Barack Obama is constantly telling us about how unemployment is “going down”, but the truth is that the percentage of working age Americans that are either working or considered to be looking for work has steadily declined since the end of the last recession…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Presentation-Labor-Force-Participation-Rate-460x306.png (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/presentation-labor-force-participation-rate-2)
#9 Some have suggested that the decline in the labor force participation rate is due to large numbers of older people retiring. But the reality of the matter is that we have seen a spike in the inactivity rate for Americans in their prime working years. As you can see below, the percentage of males between the ages of 25 and 54 that aren’t working and that aren’t looking for work has surged to record highs since the end of the last recession…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Presentation-Inactivity-Rate-460x306.png (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/presentation-inactivity-rate-2)
#10 A big reason why we don’t have enough jobs for everyone is the fact that millions upon millions of good paying jobs have been shipped overseas. At the end of Barack Obama’s first year in office, our yearly trade deficit with China was 226 billion dollars (http://www.census.gov/foreign-trade/balance/c5700.html#2013). Last year, it was more than 343 billion dollars (http://www.census.gov/foreign-trade/balance/c5700.html).
#11 Thanks to all of these factors, the middle class in America is dying (http://theeconomiccollapseblog.com/archives/27-facts-show-middle-class-fared-6-years-barack-obama). In 2008, 53 percent of all Americans considered themselves to be “middle class”. But by 2014, only 44 percent (http://economy.money.cnn.com/2014/01/28/middle-class/?iid=HP_LN) of all Americans still considered themselves to be “middle class”.
When you take a look at our young people, the numbers become even more pronounced. In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”. But in 2014, an astounding 49 percent (http://economy.money.cnn.com/2014/01/28/middle-class/?iid=HP_LN) of all Americans in that age range considered themselves to be “lower class”.
#12 This is something that I have covered before, but it bears repeating. The velocity of money is a very important indicator of the health of an economy. When an economy is functioning smoothly, people generally feel quite good about things and money flows freely through the system. I buy something from you, then you take that money and buy something from someone else, etc. But when an economy is in trouble, the velocity of money tends to go down. As you can see on the chart below, a drop in the velocity of money has been associated with every single recession since 1960. So why has the velocity of money continued to plummet since the end of the last recession?…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/07/Velocity-Of-Money-M2-460x306.png (http://theeconomiccollapseblog.com/archives/12-ways-the-economy-is-already-in-worse-shape-than-it-was-during-the-depths-of-the-last-recession/velocity-of-money-m2-4)
If you are waiting for an “economic collapse” to happen, you can stop waiting.
One is unfolding right now before our very eyes.
But what most people really mean when they ask about these things is that they are wondering when the next great financial crisis will happen. And as I discussed yesterday (http://theeconomiccollapseblog.com/archives/4-things-that-are-happening-today-that-indicate-that-a-deflationary-financial-collapse-is-imminent), things are lining up in textbook fashion for one to happen in our very near future.
Once the next great financial crisis does strike, all of the numbers that I just discussed above are going to get a whole lot worse.
So as bad as things are now, the truth is that this is just the beginning of the pain

[mick silver]

JP Morgan And Citigroup Agree That The U.S. Economy Is Steamrolling Toward A Recessionhttp://theeconomiccollapseblog.com/wp-content/uploads/2015/12/Locomotive-Public-Domain-460x326.jpg (http://theeconomiccollapseblog.com/archives/jp-morgan-and-citigroup-agree-that-the-u-s-economy-is-steamrolling-toward-a-recession/locomotive-public-domain)http://theeconomiccollapseblog.com/archives/category/banksters

[mick silver]

Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’ (http://theeconomiccollapseblog.com/archives/warren-buffett-derivatives-are-still-weapons-of-mass-destruction-and-are-likely-to-cause-big-trouble)
http://theeconomiccollapseblog.com/wp-content/uploads/2015/06/Nuclear-War-Public-Domain-460x460.jpg (http://theeconomiccollapseblog.com/archives/warren-buffett-derivatives-are-still-weapons-of-mass-destruction-and-are-likely-to-cause-big-trouble/nuclear-war-public-domain)http://theeconomiccollapseblog.com/archives/category/banksters

[EE_]

JP Morgan And Citigroup Agree That The U.S. Economy Is Steamrolling Toward A Recession

Remember, it's your's and my economy that's steamrolling toward a recession...not JP Morgan's and Citigroup's. They have the money to weather any storm.

[mick silver]

11 Predictions Of Economic Disaster In 2015 From Top Experts All Over The Globe
http://theeconomiccollapseblog.com/wp-content/themes/atahualpa/images/icons/user.gif By Michael Snyder, on January 4th, 2015

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http://theeconomiccollapseblog.com/wp-content/uploads/2015/01/2015-Public-Domain-300x240.png (http://theeconomiccollapseblog.com/archives/11-predictions-economic-disaster-2015-top-experts-globe/2015-public-domain)Will 2015 be a year of financial crashes, economic chaos and the start of the next great worldwide depression? Over the past couple of years, we have all watched as global financial bubbles have gotten larger and larger. Despite predictions that they could burst at any time, they have just continued to expand. But just like we witnessed in 2001 and 2008, all financial bubbles come to an end at some point, and when they do implode the pain can be extreme. Personally, I am entirely convinced that the financial markets are more primed for a financial collapse now than they have been at any other time since the last crisis happened nearly seven years ago. And I am certainly not alone. At this point, the warning cries have become a deafening roar as a whole host of prominent voices have stepped forward to sound the alarm. The following are 11 predictions of economic disaster in 2015 from top experts all over the globe…
#1 Bill Fleckenstein (http://kingworldnews.com/fleckenstein-warns-2015-year-fantasy-dies/): “They are trying to make the stock market go up and drag the economy along with it. It’s not going to work. There’s going to be a big accident. When people realize that it’s all a charade, the dollar will tank, the stock market will tank, and hopefully bond markets will tank. Gold will rally in that period of time because it’s done what it’s done because people have assumed complete infallibility on the part of the central bankers.”
#2 John Ficenec (http://www.telegraph.co.uk/finance/economics/11322623/Ten-warning-signs-of-a-market-crash-in-2015.html): “In the US, Professor Robert Shiller’s cyclically adjusted price earnings ratio – or Shiller CAPE – for the S&P 500 is currently at 27.2, some 64pc above the historic average of 16.6. On only three occasions since 1882 has it been higher – in 1929, 2000 and 2007.”
#3 Ambrose Evans-Pritchard (http://www.telegraph.co.uk/finance/economics/11312671/The-year-of-dollar-danger-for-the-world.html), one of the most respected economic journalists on the entire planet: “The eurozone will be in deflation by February, forlornly trying to ignite its damp wood by rubbing stones. Real interest rates will ratchet higher. The debt load will continue to rise at a faster pace than nominal GDP across Club Med. The region will sink deeper into a compound interest trap.”
#4 The Jerome Levy Forecasting Center (http://www.bloomberg.com/news/2014-11-10/predictors-of-29-crash-see-65-chance-of-2015-recession.html), which correctly predicted the bursting of the subprime mortgage bubble in 2007: “Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn.”
#5 Paul Craig Roberts (http://kingworldnews.com/paul-craig-roberts-stunning-2015-predictions-time-west-can-collapse/): “At any time the Western house of cards could collapse. It (the financial system) is a house of cards. There are no economic fundamentals that support stock prices — the Dow Jones. There are no economic fundamentals that support the strong dollar…”
#6 David Tice (http://www.businessinsider.com/david-tice-is-bearish-2014-12): “I have the same kind of feel in ’98 and ’99; also ’05 and ’06. This is going to end badly. I have every confidence in the world.”
#7 Liz Capo McCormick and Susanne Walker (http://www.bloomberg.com/news/2014-12-29/u-s-bond-sentiment-is-worst-since-disastrous-09-as-fed-shifts.html): “Get ready for a disastrous year for U.S. government bonds. That’s the message forecasters on Wall Street are sending.”
#8 Phoenix Capital Research (http://www.zerohedge.com/news/2014-12-29/9-trillion-us-dollar-carry-trade-blew-oil-russia-and-brazil%E2%80%A6-whats-next): “Just about everything will be hit as well. Most of the ‘recovery’ of the last five years has been fueled by cheap borrowed Dollars. Now that the US Dollar has broken out of a multi-year range, you’re going to see more and more ‘risk assets’ (read: projects or investments fueled by borrowed Dollars) blow up. Oil is just the beginning, not a standalone story.
If things really pick up steam, there’s over $9 TRILLION worth of potential explosions waiting in the wings. Imagine if the entire economies of both Germany and Japan exploded and you’ve got a decent idea of the size of the potential impact on the financial system.”
#9 Rob Kirby (http://usawatchdog.com/oil-derivatives-explode-in-early-2015-rob-kirby/): “What this breakdown in the crude oil price is going to spawn another financial crisis. It will be tied to the junk debt that has been issued to finance the shale oil plays in North America. It is reported to be in the area of half a trillion dollars worth of junk debt that is held largely on the books of large financial institutions in the western world. When these bonds start to fail, they will jeopardize the future of these financial institutions. I do believe that will be the signal for the Fed to come riding to the rescue with QE4. I also think QE4 is likely going to be accompanied by bank bail-ins because we all know all western world countries have adopted bail-in legislation in their most recent budgets. The financial elites are engineering the excuse for their next round of money printing . . . and they will be confiscating money out of savings accounts and pension accounts. That’s what I think is coming in the very near future.”
#10 John Ing (http://www.shtfplan.com/headline-news/chain-reaction-of-problems-coming-in-2015-collapse-will-be-on-a-scale-that-is-many-magnitudes-greater-than-2008_12292014): “The 2008 collapse was just a dress rehearsal compared to what the world is going to face this time around. This time we have governments which are even more highly leveraged than the private sector was.
So this time the collapse will be on a scale that is many magnitudes greater than what the world witnessed in 2008.”
#11 Gerald Celente (http://kingworldnews.com/gerald-celente-will-trigger-panic-wall-street-around-world-2015/): “What does the word confidence mean? Break it down. In this case confidence = con men and con game. That’s all it is. So people will lose confidence in the con men because they have already shown their cards. It’s a Ponzi scheme. So the con game is running out and they don’t have any more cards to play.
What are they going to do? They can’t raise interest rates. We saw what happened in the beginning of December when the equity markets started to unravel. So it will be a loss of confidence in the con game and the con game is soon coming to an end. That is when you are going to see panic on Wall Street and around the world.”
If you have been following my website (http://theeconomiccollapseblog.com/), you know that I have been pointing to 2015 for quite some time now.
For example, in my article entitled “The Seven Year Cycle Of Economic Crashes That Everyone Is Talking About (http://theeconomiccollapseblog.com/archives/the-seven-year-cycle-of-economic-crashes-that-everyone-is-talking-about)“, I discussed the pattern of financial crashes that we have witnessed every seven years that goes all the way back to the Great Depression. The last two major stock market crashes began in 2001 and 2008, and now here we are seven years later.
Will the same pattern hold up once again?
In addition, there are many other economic cycles that seem to indicate that we are due for a major economic downturn. I discussed quite a few of these theories in my article entitled “If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States (http://theeconomiccollapseblog.com/archives/if-economic-cycle-theorists-are-correct-2015-to-2020-will-be-pure-hell-for-the-united-states)“.
But just like in 2000 and 2007, there are a whole host of doubters that are fully convinced that the party can continue indefinitely. Even though our economic fundamentals continue to get worse, our debt levels continue to grow and every objective measurement shows that Wall Street is more reckless and more vulnerable to collapse than ever before, they mock the idea that a financial collapse is imminent.
So let’s see what happens in 2015.
I have a feeling that it is going to be an extremely “interesting” year

[mick silver]

“What does the word confidence mean? Break it down. In this case confidence = con men and con game. That’s all it is. So people will lose confidence in the con men because they have already shown their cards. It’s a Ponzi scheme. So the con game is running out and they don’t have any more cards to play.

[mick silver]

Oil is getting close to crumbling below levels not seen since the financial crisis
Prices slid to $34.53 a barrel on Monday morning -- the cheapest level since February 2009. The drop was fueled by concerns about a surge in Iranian oil production as soon as next month. The country is awaiting sanctions to be lifted early next year. (http://money.cnn.com/2015/11/24/news/economy/iran-oil-giant-revival/index.html?iid=EL)




It's the latest blow for oil, which has lost an incredible 14% of its value this month alone. If it keeps falling, oil will take out the crisis low of $32.40 a barrel that was set in December 2008 and fall to the levels unseen since April 2004.
Related: 40-year U.S. oil export ban may soon be lifted (http://money.cnn.com/2015/12/14/investing/oil-export-ban-congress-gas-prices/index.html?iid=EL)
Rather than global economic depression, prices today are being slammed by a massive glut of oil. The oversupply issue is only going to be worsened by Iran, which is gearing up for its highly-anticipated return to global oil markets after years of sanctions had blocked it.
Iran has said it will boost its output by 500,000 barrels per day immediately after sanctions are lifted, possibly as early as next month.
New comments from Iran suggest the OPEC country is not willing to let the oil crash mess up those plans.
There is "absolutely no chance" Iran will delay its plan to boost oil shipments despite cheap oil, Amir Hosseein Zamaninia, Iran's deputy oil minister for international and commerce affairs, told Bloomberg (http://www.bloomberg.com/news/articles/2015-12-13/oil-holds-losses-near-7-year-low-as-opec-seen-fueling-oversupply).
Related: Copper, aluminum and steel collapse to crisis levels (http://money.cnn.com/2015/12/09/investing/oil-prices-metals-crash-crisis-levels/index.html?iid=EL)
Iran's return to the oil market may be giving OPEC leader Saudi Arabia another reason (http://money.cnn.com/2015/12/03/investing/opec-oil-prices-saudi-arabia-iran/?iid=EL) to keep pumping oil at an all-out pace (http://money.cnn.com/2015/12/11/investing/oil-opec-winning-iea/index.html?iid=EL). The Saudis, longtime rivals of Iran, realize stronger prices would help boost Iran's chances of an economic rebound.
http://i2.cdn.turner.com/money/dam/assets/151202151313-iran-vs-saudi-arabia-780x439.jpg All of this explains why some are bracing for even lower prices. Russia's top finance official said the nation is planning for prices to sink to $30 a barrel (http://money.cnn.com/2015/12/14/news/economy/russia-30-oil-budget/index.html?iid=EL) in 2016, spelling more trouble for the major energy producer.
Cheap oil has sparked renewed concern on Wall Street (http://money.cnn.com/2015/12/11/investing/stocks-oil-santa-claus-rally/index.html?iid=EL) about the health of the global economy and corporate profits. The oil crash has wiped out one-quarter of the value of the stocks in the S&P 500 energy sector. Individual stocks like Chesapeake Energy (CHK (http://money.cnn.com/quote/quote.html?symb=CHK&source=story_quote_link)) and Southwestern Energy (SWN (http://money.cnn.com/quote/quote.html?symb=SWN&source=story_quote_link))have lost a stunning 80% of their value in 2015.
Related: OPEC is at war -- sending shockwaves around the world (http://money.cnn.com/2015/12/04/investing/opec-saudi-arabia-war-oil-prices/index.html?iid=EL)
After tumbling earlier in the day, oil prices rebounded on Monday and were recently trading at $36 a barrel.
"Things are always darkest before dawn. I wouldn't be surprised if we bounce strongly from here," said Matthew Smith, director of commodity research at ClipperData, which tracks global crude shipments.
For now, American consumers continue to benefit from cheap energy costs. The price of a gallon of gasoline is on the verge of tumbling below $2 a gallon for the first time since 2009.
Related: Iran gears up for huge return to oil market (http://money.cnn.com/2015/11/24/news/economy/iran-oil-giant-revival/index.html?iid=EL)
Related: Russia is bracing for $30 oil (http://money.cnn.com/2015/12/14/news/economy/russia-30-oil-budget/index.html?iid=EL)
Related: Cheapest gas in the U.S. is here... (http://money.cnn.com/2015/11/30/news/economy/cheapest-gas/index.html?iid=EL)

[ShortJohnSilver]

ObamaCare and "sickcare" will destroy the country. It is a huge lamprey eel on the side of our economy.