Podcast
by
Chris Martenson
Here we are, about an hour from the market open in the US, and European markets are down hard, while US stock futures point to a miserable open.
I’m opening this thread to follow the day’s activities.
As I write this, S&P futures are down -23.50 and Dow futures are down -156.
Gold is down a further -$15 to $1179/oz, and oil is down a full -$2.17 to $67.70.
Sometimes, history rhymes, and sometimes it does more than that. This is almost exactly a repeat of what happened in Fall 2008, right down to the last detail, including a widening TED spread. I warned of this recently in the currency swap thread, and I am feeling confirmed that there is a generalized loss of liquidity somewhere, probably in the European banking system.
Something is broken. We don’t yet know what, but it doesn’t really matter what it is. We are in the midst of another credit crisis. You’d better buckle up.
Mr. Market Melting Down
PREVIEW by Chris MartensonHere we are, about an hour from the market open in the US, and European markets are down hard, while US stock futures point to a miserable open.
I’m opening this thread to follow the day’s activities.
As I write this, S&P futures are down -23.50 and Dow futures are down -156.
Gold is down a further -$15 to $1179/oz, and oil is down a full -$2.17 to $67.70.
Sometimes, history rhymes, and sometimes it does more than that. This is almost exactly a repeat of what happened in Fall 2008, right down to the last detail, including a widening TED spread. I warned of this recently in the currency swap thread, and I am feeling confirmed that there is a generalized loss of liquidity somewhere, probably in the European banking system.
Something is broken. We don’t yet know what, but it doesn’t really matter what it is. We are in the midst of another credit crisis. You’d better buckle up.
by
Chris Martenson
It was recently announced that the Fed planned to re-open lines with other central banks, allowing them to swap for dollars. We’ve been down this path before. I want to review what happened last time, because if that pattern repeats, we are about to begin a brand-new stage of financial system stress and stock market losses.
To begin, you should review this article I wrote on September 25, 2009, which describes currency swaps and does a post-mortem on the relationship between dollar swap volumes and strength in the US dollar index. The correlation was pretty tight.
Here’s the primary image from that article with some of the text that followed it:
Currency Swaps Spell Trouble?
PREVIEW by Chris MartensonIt was recently announced that the Fed planned to re-open lines with other central banks, allowing them to swap for dollars. We’ve been down this path before. I want to review what happened last time, because if that pattern repeats, we are about to begin a brand-new stage of financial system stress and stock market losses.
To begin, you should review this article I wrote on September 25, 2009, which describes currency swaps and does a post-mortem on the relationship between dollar swap volumes and strength in the US dollar index. The correlation was pretty tight.
Here’s the primary image from that article with some of the text that followed it:
by
Chris Martenson
Recently I’ve argued that Deflation is Not on the Menu by pointing out that the immediate and devastating political and economic pain associated with deflation will spur decision-makers to do anything and everything within their power to stoke inflation.
And then, when discussing the Greek situation, I noted that there are only three possible actions for EU leadership to take:
- Let Greece fail
- Let French and German banks fail
- Fire up the QE particle accelerator, buy up all those dodgy Greek (and Spanish and Portuguese and…) bonds, and stuff them onto the ECB balance sheet like the Fed did with MBS paper
Providing no surprise to me at all, they chose option #3 this weekend and fired up the magic money machine to the tune of nearly a cool trillion:
A Cure Worse Than The Disease
PREVIEW by Chris MartensonRecently I’ve argued that Deflation is Not on the Menu by pointing out that the immediate and devastating political and economic pain associated with deflation will spur decision-makers to do anything and everything within their power to stoke inflation.
And then, when discussing the Greek situation, I noted that there are only three possible actions for EU leadership to take:
- Let Greece fail
- Let French and German banks fail
- Fire up the QE particle accelerator, buy up all those dodgy Greek (and Spanish and Portuguese and…) bonds, and stuff them onto the ECB balance sheet like the Fed did with MBS paper
Providing no surprise to me at all, they chose option #3 this weekend and fired up the magic money machine to the tune of nearly a cool trillion:
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