Eveyone seems to be completely focused on the terrorism activity and potential for more coming from various sources and conditions. While everyone has their eye on that ball, and with justification, the financial situation has definitely taken a turn for the worse today!
A decent sized junk bond fund froze redemptions today. This is a fund with over 700 million in customer money and now no one can get to their dough. Why? Well appears that to meet current redemption requests the fund would have to ‘fire sale’ bonds to meet them. Thus, the entire fund would suffer, or so they logic goes. Remember junk bonds are high risk and now we see that even junk bond funds can be extremely high risk, at least if you want to access your money.
This is significant folks. There is a ton, trillions, of dollars in bonds, bond funds and interest rate derivatives (especially high risk) and should interest rates go up – which the FED is promising – you could very likely see a tsunami of bond fund redemptions and not just in the junk class. When rates go up the value of the bonds declines…so if an investor wants to avoid punitive losses they would sell – right? Well that might not be as easy as you would think and todays actions by just one fund paves the way for a catastrophic event to unfold. Kind of like someone yelling fire in a theater and there is only one exit…not many get out and the rest burn!
Terrorism, the violent kind, can kill tens if not hundreds at once – a truly terrible thing and sad. Another financial crisis could undo our system and indeed bleed over into the entire world at large. Gridlock and panic would ensue with no one able to get to their money. Makes gold and cash look pretty enticing doesn’t it?
Let’s see if the financial monkeys can keep a lid on this deal…stay tuned as this develops.
While I might disagree with Richard on the exact levels and timing of the ‘downturn’ I really can’t disagree with his end game scenario. If you haven’t been paying attention to the world finance game, it might be time to start! The powers that be are running hard and are trying to throttle Greece. I hope that Greece begins to print their own money and begins to bring some honesty back to their monetary policy! Click here to read Richard Russell’s article.
Some bond funds are beginning to accumulate cash, some as high as 10% of assets, which doesn’t sound like much but when you are talking billions, it adds up! These money managers are starting to get ‘defensive’ in light of the FED’s talk of raising interest rates which will cut the value of bonds…Of course, they will still have 90% tied up in what could become some serious money losing paper! For most of us these are not huge considerations unless you have shares in any of these bond funds.
No one knows when this rate increase will occur, just that it is inevitable. The timing is still somewhat up in the air, or at least that is what the FED would have us believe. Read the article here.
This is just enough to make one sick! First the TPP fast track was ‘defeated’ by a nice margin then passed by the same margin! It only took just over a million dollars to get that done! All the money spread around the senate to convince the esteemed members to change their minds! Folks this is the country we have now…how sad. Click here to read the article.
The saga continues, illegal immigration leading to more births to more ‘U.S. Citizen’ with loyalty to their own ethnic group. Added on top a bunch of buffoons that are loyal to big corporate interests and/or money and you get what we have today-a complete mess, to put it simply. Read more on illegal immigrant births here.
Great article on where you might put your money to avoid confiscation etc. Read here
It is now official I suppose, finance and money are now weapons of mass destruction. You can see it in the price of oil directed at the destruction of the Russian economy and I am sure that the intelligence community tracks money flows to and from ‘terrorist’ groups. If this is true, then we could infer that we are at war, a financial one as we speak. Read more here.
I haven’t been posting too much over the past several months as things in our country continue to deteriorate at the usual pace, fast and un challenged!
The economy is fragile and the ‘medicine’ that Ben Bernanke is giving the ‘system’ will soon become the poison–it is inevitable. This is not just me spouting off at the mouth but several very good economists with pretty darn good track records as well.
Take a look at this article, read it and weep for what once was and what is coming soon.
Major Bank, Economists Agree: Market Collapse Will Strike in 2013
Wednesday, 09 Jan 2013 10:22 AM
By Christian Hill
According to a major bank, a pair of noted economists, and one controversial billionaire, 2013 will be a “year of terrible reckoning” for the stock market.
JPMorgan just released its outlook for the first quarter. Surprisingly, this regularly bullish company has reversed course and revealed an ominous chart that every investor needs to be alerted to.
As you can clearly see, stocks have retraced the pattern from the last two big market rallies (averaging over 100%), and now face a massive decline in 2013 (of over 50%).
JPMorgan isn’t alone in its stark predictions.
Economist and NYU professor Nouriel Roubini has said in recent interviews that there is a chance that an economic “perfect storm” will devastate global markets in 2013. He points to a worsening eurozone crisis, a hard landing for the Chinese economy, and a war in the Middle East that could push oil prices above $200 a barrel.
Agreeing with Roubini’s worrisome outlook is billionaire Jim Rogers. In a recent interview with Yahoo Finance, Rogers says regarding 2013, “You should be very worried, and you should prepare yourself.”
Rogers referenced a little-known economic cycle that proves the United States experiences a slowdown every four to six years (and 2013 marks four years since our last slowdown).
Perhaps most alarming of all are the predictions made by economist Robert Wiedemer.
In a recent interview for his New York Times best-seller Aftershock, Wiedemer says, “The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2013.”
Editor’s Note: Watch the disturbing interview with Wiedemer. click here to view
Now before you dismiss Wiedemer’s claims as impossible or unrealistic, consider that he and his team of economists correctly foresaw the real estate collapse in 2006, the stock market crash of 2008, and the federal debt bubble plaguing America now.
And bear in mind, Sam Stovall of Standard & Poor’s has stated that Wiedemer “makes a compelling argument for a chilling conclusion,” and MarketWatch’s Paul Farrell called Wiedemer’s work “your bible.”
When the interview host questioned Wiedemer’s latest data, the author unapologetically displayed shocking charts backing up his allegations, and then ended his argument with, “You see, the medicine will become the poison.”
The interview has become a wake-up call for those unprepared (or unwilling) to acknowledge an ugly truth: The country’s financial “rescue” devised in Washington has failed miserably.
Wiedemer says blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including current Federal Reserve Chairman Ben Bernanke and former Chairman Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation’s economy strong through monetary and credit policies.
Shocking Footage: See the eerie chart that exposes the ‘unthinkable.’
At one point, Wiedemer even calls out Bernanke, saying that his “money from heaven will be the path to hell.”
But it’s not just the grim predictions that are causing the sensation; rather, it’s the comprehensive blueprint for economic survival that’s really commanding global attention.
Now viewed over 50 million times, the interview offers realistic, step-by-step solutions that the average hard-working American can easily follow.
The overwhelming amount of feedback to publicize the interview, initially screened for a private audience, came with consequences as various online networks repeatedly shut it down and affiliates refused to house the content.
Bernanke and Greenspan were not about to support Wiedemer publicly, nor were the mainstream media.
“People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it,” said Newsmax Financial Publisher Aaron DeHoog, “but unfortunately, it kept getting pulled.”
“Our real concern,” DeHoog added, “is what if only half of Wiedemer’s predictions come true?
“That’s a scary thought for sure. But we want the average American to be prepared, and that is why we will continue to push this video to as many outlets as we can. We want the word to spread.”
I urge you to take the necessary precautions as things could get rather weird in the coming days and months ahead! No one knows the exact moment, but many will point back in time and pick some arbitrary event that ’caused it all’. Ben Bernanke will most likely avoid ridicule. Many have been, are and will be responsible for our economy and none will be made responsible.
As the can tumbles down the road, we are now hearing that the Euro is showing signs of some deeper issues developing. At first the Euros flowed from the troubled nations to the core now the capital flows are outward, from the Euro to outside currency havens.
The Euro has lost 8% against the dollar just since May. For many that might not seem too large but in the currency game this is huge! Seems that everyone is just losing hope as the European Central Bank and Germany can’t seem to come together on anything.
Ultimately the only weapon that they have is the printing press…buying more bonds with newly printed money to keep rates down in the ‘troubled’ nations. This in turn will eventually lead to inflation. Too much money chasing limited goods and services leads to higher prices for those same goods and services…at least that is the traditional thinking.
In my opinion we have not seen a ton of inflation in typical safe haven assets such as real estate due to the tremendous amount of price inflation that was artificially injected into the system via virtually unlimited cheap credit. Now we are seeing that ‘fluff’ taken out of the market entirely.
Given this logic then we might see a ‘bottom’ in that market and then a huge bounce. Rates will begin to rise and so will prices. We are already seeing food costs soar due to the drought and the drop in worldwide food supplies.
We will see if the making of the perfect storm are here and develop. The system is, in my opinion, severely stretched and it won’t take a lot to just see it disassemble. The rate and timing of this event is a moving target and when it becomes evident it may be too late for those that are not prepared!
We will continue to see more and more foreclosures, especially now that the government has ‘settled’ with the big banks that have abused the entire process from loan to foreclosure.
I am wondering what will happen to the funds awarded to the government to ‘help’ those homeowners that have been abused? I suspect that pennies on the dollar will actually end up in the hands of the abused and probably too late to matter, as the government in their efficient execution eats up all the dough and takes their sweet time in doing so.
The criminal activities will proceed most likely in many states. It appears to be difficult for these folks to actually follow the law while they use it to protect themselves. Way too much money involved here to not see abuses.
What have we come to?
States with the most homes in foreclosure
Five major U.S. banks accused of foreclosure abuses have agreed to a $26 billion settlement with the government, the largest payout from banks arising from the financial crisis. The amount, which will include aid from banks in the form of loan forgiveness and refinancing, is intended to help homeowners avoid mortgage default and foreclosure. Most economists believe this is a step in the right direction, albeit only a small one.
Homeowners in at least 49 states represented in the agreement will benefit, though some states have more homes in trouble than others. California, one the hardest-hit states in the foreclosure crisis, will reportedly receive mortgage relief of up to $18 billion. Based on Corelogic’s national foreclosure report, 24/7 Wall St. identified the states with the highest foreclosure rates.
Many of the states with the highest foreclosure rates experienced the worst of the housing crisis. However, analysis by 24/7 reveals that the primary driver of higher foreclosure rates is a lengthy foreclosure process.
Nearly all of the states with the highest rates also have the longest foreclosure periods. The average foreclosure process for the nation is 140 days. The average foreclosure process for the eleven states with the highest foreclosure rates is 220. As a result, many homes foreclosed in 2011 in these states were actually at the end of a process that began more than a year ago. New York, one of the states with the worst foreclosure rates, has an average processing period of 445 days.
The reasons why the foreclosure processing period is longer in these states is because it usually involves the court system. Judicial foreclosures are handled by the court and usual include filing motions and seeking a final judgment from a judge. Nonjudicial foreclosures, which tend to take less time to process, are governed by state law and do not require court intervention. Nine of the 11 states with the highest foreclosure rates have a judicial-only foreclosure process.
While some of the states with high foreclosure rates have had substantial improvements in their economies, others continue to be hit hard. In Nevada and Florida, two states with the highest foreclosure rates, homes lost roughly half of their value over the past five years — and prices are still falling. Foreclosures that began several years ago and that are still active cannot be the only reason nearly 12% of Florida’s homes with mortgages were in foreclosure last year. Home prices in the state fell nearly 50% over the past five years, unemployment remains extremely high, and 17.4% of people with mortgages in the state were 90 days or more late on their mortgage payments.
24/7 Wall St. reviewed housing data provided by Corelogic to rank the states that had the highest percentage of homes with mortgages that were in foreclosure in 2011. Corelogic’s report also provided the percentage of homeowners that were delinquent on their mortgages for 90 days or more last year. In order to highlight the conditions of these state economies and housing markets, we included unemployment rates from the Bureau of Labor Statistics and home price changes from Fiserv-Case Shiller.
Check out the five states with the most homes in foreclosure:
5. New York
2011 foreclosure rate: 4.6%
December, 2011 unemployment: 8% (23rd highest)
Home price change (2006Q3-2011Q3): -13.6% (23rd largest decline)
Processing period: 445 days
New York’s processing period for foreclosures is 445 days — by far the longest among all states. This could explain why the state has such a high foreclosure rate for mortgaged homes. And although New York’s housing prices didn’t decline as much as in other states, the 13.6% decline since the third quarter of 2006 is still quite large. Moreover, home prices are forecast to decrease among the most in the country over the next year and drop nearly 6% by the third quarter of 2012.
2011 foreclosure rate: 5.3%
December, 2011 unemployment: 12.6% (the highest)
Home price change (2006Q3-2011Q3): -59.3% (the largest decline)
Processing period: 116 days
For Nevada, things aren’t going well. Its already dismal economy and housing situation are still getting worse. Nevada didn’t experience a glut of foreclosures last year because the state has a particularly lengthy foreclosure process. Between the third quarter of 2006 and the third quarter of 2011, the median home value in the state tumbled by nearly 60%. By the third quarter of this year, Fiserv-Case Shiller projects home prices will fall an additional 13.9% — by far the worst drop in the country. Nevada has the worst unemployment rate in the country, at 12.6%, and 13.4% of mortgage owners were delinquent on payments for 90 days or more last year.
2011 foreclosure rate: 5.4%
December, 2011 unemployment: 9.8% (7th highest)
Home price change (2006Q3-2011Q3): -29% (7th largest decline)
Processing period: 300 days
Home prices in Illinois have dropped 29% from the third quarter of 2006 — one of the largest declines in the country. It also takes 300 days to process foreclosures in the state. And Illinois residents are not lining up to pay off their mortgages either. The state’s 90+ day delinquency rate for mortgage payments is 9.2%, the fourth highest in the country.
2. New Jersey
2011 foreclosure rate: 6.4%
December, 2011 unemployment: 9% (13th highest)
Home price change (2006Q3-2011Q3): -22.6% (14th largest decline)
Processing period: 270 days
New Jersey has one of the longest foreclosure processing periods in the country at 270 days. The state also has a 90+ day delinquency rate of 10.6%, which is the third highest rate in the country. On top of this, the state’s housing market is not expected to rebound for some time. In fact, home prices are forecast to decrease an additional 3.9% by the third quarter of 2012.
2011 foreclosure rate: 11.9%
December, 2011 unemployment: 9.9% (6th highest)
Home price change (2006Q3-2011Q3): -49% (3rd largest decline)
Processing period: 135 days
Florida’s 2011 foreclosure rate for mortgaged homes is not only the highest in the country, but it is almost twice that of New Jersey — the state with the second-highest rate. As with many other states on this list, Florida has a very long foreclosure processing period of 135 days. There is more to the state’s high foreclosure rate than just that, however. Home prices dropped 49% since the third quarter of 2006, which is the third-largest drop in the country. The state’s unemployment rate of 9.9% is among the highest as well. Finally, the state’s mortgage payment delinquency rate is 17.4% — the nation’s absolute highest
There is some good news though. Several cities in Florida including Miami have seen a bounce in home prices over the last year. Several other cities in the worst hit states have also recovered in home prices somewhat. I hope for the best here.