FOUR years after the worst of the financial crisis and the world appears to be faltering again. According to The Economist’s calculations, world GDP grew by just 2.1% during the first quarter of 2013 compared with a year earlier. Just 12 months ago, output was growing at a reasonable clip of 3.1%.
Why China’s Economy May Be Heading for a Crash
China’s central bank sent global markets reeling when it attempted tighten credit and rein in the country’s shadow banking system. But the consequences of China’s credit binge may just be getting started, and experts say there could be more pain to come for the world’s second-largest economy.
“We’ve been seeing tightening since the end of last year,” said Leland Miller, China Beige Book International president. “This is not a spur of the moment decision by the central bank.”
Leland said the higher interbank lending rates are an indicator of a tension in the system. “The credit transition mechanism is broken and until that’s fixed, there will be no happy endings in China,” he said.
At the last FOMC meeting, by prematurely announcing the timeline and the specifics of an exit from QE, Bernanke might have lost control of rates and volatility.
The Critical Trend Towards Higher Interest Rates Has Begun…(This Will Blow The Derivitives Market!!)
“’The Fed can continue to spew out QE until the bond market says it can’t.’ – Richard Russell. PS: The bond market has said that ‘it can’t.’”
Richard Russell, dowtheoryletters, 06/21/2013
“The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses…This little coterie…runs our government for their own selfish ends. It operates under cover of a self-created screen…seizes…our executive officers… legislative bodies…schools…courts…newspapers and every agency created for the public protection.”
Quadrillions In Derivatives Is Ready To Blow Up A Magnitude Bigger Than What Happened To AIG. They Are Rate Sensitive. Every Tick Up Brings Us Closer To A Massive Event!
New Doomsday poll: 98% risk of 2014 stock crash
Yes, 2014 is an absolute total disaster just waiting to ignite. In “Doomsday poll: 87% risk of stock crash by year-end” we analyzed 10 major crash warnings since early this year. Since then, more incoming bogies raced across our radar screen. Ticking time bombs from Congress, the Supreme Court, sex, carbon emissions, Big Oil, NSA, IRS, Tea Party austerity. Relentless. Mind-numbing.
So many are tuning out. Denial. Truth is, bubbles are everywhere. Ready to blow. The evidence is accelerating, with only one obvious conclusion: Max 98% risk at a flashpoint. This 2014 crash is virtually guaranteed. There’s but a narrow 2% chance of dodging this bullet.
Here are the 10 bogies, drones targeting markets, stocks, bonds and the, global economy:
1. Bubble With No Name Yet triggers the biggest crash in 30 years
All three of the big worldwide financial bubbles that have blow up in the last three decades have “been fueled by the Fed keeping policy rates below the nominal growth rate of the economy far too long,” says global strategist Kit Juckes of the French bank Societe Generale…..
Bill Gross Discusses the “Tipping Point” For Bonds; Does He Miss the Boat?
Bill Gross did not see this major selloff in bonds coming. He discusses the setup in his recent Investment Outlook called The Tipping Point.
Much of the article is about how he almost tipped a ship while in the Navy. He uses the tipped ship metaphor to talk about the position in bonds.
Gross says “Markets just had too much risk, and in PIMCO’s opinion, too much hope for a constant QE and for the growth that it would produce. In effect, the ship was top heavy with too little ballast. Guess I should have known, huh?”
That’s water over the dam at this point so the question Gross asks now is “Well where does the ship go from here?”
2013: Stock Market Crash!
Tags: Transition Mechanism, International President, S Central, Beige Book, World Gdp