Global Recession On The Horizon?! Australia, Brazil, Greece, And Japan Enter Bear Market

Japan Is Falling

Down nearly 2%.

No surprise here.

Japan is falling again, following the violent strengthening of the yen during the middle of the day today.

The Nikkei is off 1.76%.

Japan Officially Enters A Bear Market

In basically just over 2 weeks, Japan has gone from the hottest market in the world to a bear market.

With today’s early dive, the Nikkei is now 20% off its highs, which is the technical definition of a bear.



Australia stocks dip into correction mode

Australian stocks fell Wednesday, in step with losses overnight on Wall Street and in the region fueled by worries that central banks won’t provide more economic stimulus. The S&P/ASX 200 AU:XJO -0.85% was down 0.8% to 4,721.40, but an intraday low at 4,717.40 marked a 10% decline since the benchmark’s most recent high on May 15, which is considered a technical correction.

Greek Stocks Enter Bear Market As Privatization Program Crashes But Does Not Burn

“It all began with Greece,” and as Mark Grant notes today, “somebody, somewhere is going to take a hit.” It appears the ‘news’ is piling up thick and fast in the ‘islands’ nation. As Reuters reportsGreece did not receive any binding bids for natural gas producer DEPAThis was part of the asset-sale program demanded by the TROIKA, with Hellenic Petroleum’s sale later in the year now potentially on hold. The sad truth is that the country cannot pay their bills, cannot pay their pension obligations, cannot fund social services and is just about out of money to even run their government. The reality is; they are bankrupt again and there is no way out without some form of debt forgiveness and more money. Debt forgiveness, alone, will not cut the mustard now by itself and some kind of end game may well be near. That is increasingly reflected in 2012’s no-brainer trade as GGBs are now back below 60 and down over 10% from their highs and the Athens Stock Index just entered bear market territory, down 20% from its highs.

Emerging Equities Decline as Brazil Enters Bear Market

Emerging-market stocks tumbled as Brazil’s Ibovespa (IBOV) became the first of the major developing-nation indexes to enter a bear market amid concern that global central banks will pare economic stimulus measures.

The Ibovespa closed 21 percent below this year’s high, led by a plunge in Brazilian billionaireEike Batista’s OGX Petroleo & Gas Participacoes SA and LLX Logistica SA. The MSCI BRIC Index slipped for a 10th day, the longest slide since at least January 1995. Russian shares dropped to a one-year low as commodity producers slipped. Qatar and the United Arab Emirates were upgraded to emerging-market status at MSCI Inc., while Greece lost its classification as a developed market.


The last time this happened, tech stocks crashed 80%

Little-followed speculative indicator hits levels not seen since February 2000…


Article Continues Below

Penny stock volume as a percentage of Nasdaq volume became a very large percentage back in Feb of 2000, reflecting that a high level of speculative trading was taking place. In the next few years the Nasdaq 100 lost over 80% of its value!

Recently Penny stock volume as a percentage of Nasdaq volume took a very sharp increase, surpassing the highest level ever, which took back in 2000 at the highs!

Is this the holy grail of indicators?  No!

I do feel investors should be aware of this, especially when Margin debt levels are at levels only seen one other time in history, which happened to be at the same time Penny stock volume hit highs back in 2000!!! (See debt levels here)

Will it be different this time?  I suspect it will!  Even if its one third of the issue it was last time, that might be enough for a few investors!!!

Equities outside the U.S. are sending a message

For those of us who follow global asset classes, it has been evident for quarters on end that majority of the world’s stock markets peaked in 2011.

[U]nlike the U.S. stock market’s recovery to new highs, the rest of the world has not been as fortunate. It is worth noting that cumulatively, equity markets outside of the U.S. have not yet bettered their May 2011 peak.

Equity indices within the commodity producing countries have been one of the worst performers since the early parts of 2011. If we look at the chart [below], we can notice that equities in…


CHART OF THE DAY: Hedge Funds Are Finally Getting Out Of Stocks

After holding on for seven weeks.

The chart below shows the big reversal in hedge fund buying last week.


hedge funds sell the marketBusiness Insider

A chart that keeps me up at night


Source: Bloomberg

Fast forward to our current situation. The S&P 500 is at news highs and yet the relative return line remains within a 2-year downtrend — not good.
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Global Recession Likely in 2014

State Street Bank & Trust’s Fred Goodwin discusses the likelihood of a global recession in 2014. He speaks with Susan Li on Bloomberg


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