The New Year Bear Market Is Here

Major Market Meltdown Under Way

Financial markets worldwide are in free fall the first week of 2016. Last Thursday, New Years Eve the Dow was down 179, a prelude to the start of the new year.

Monday, the first day of 2016, the Dow was slammed lower by 276, a calmer day followed on Tuesday with the Dow rising a mere 10 points. The carnage returned Wednesday as the market sank another 251 points. As I type at 2:30 on Thursday the market losses are accelerating with the Dow down 360 points. That’s a decline of 1056 points in one week (6%).

Now is the time (actually last week) to get into a safe place. The risk of a major market meltdown circa 2008 is growing by the day. 2016 is going to be one for the books……in many ways.

Tip of the day: Do not have significant funds in any major bank (if they have a commercial on national TV or have a stadium named after them). Get out while you still can.

Here are some scary charts.

                              Dow Industrials

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                              S&P 500

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                          NASDAQ 

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                           Even APPLE is cratering

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                           Gold is going up for a change

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Soros: It’s the 2008 crisis all over again

I really don’t like George Soros, I believe he is an evil man but I think he is right.-Lou

Soros: It’s the 2008 crisis all over again

 

Soros: It’s the 2008 crisis all over again 

Billionaire financier George Soros is warning of an impending financial markets crisis as investors around the world were roiled by turmoil in China trade for the second time this week.

Speaking at an economic forum in Sri Lanka’s capital, Colombo, he told an audience that China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world, according to media. He added that a return to rising interest rates was proving difficult for the developing world.

Soros: It’s the 2008 crisis all over again 

The current environment reminded him of the “crisis we had in 2008,” The Sunday Times in Sri Lanka reported on Thursday morning. “China has a major adjustment problem,” he added, according to Bloomberg. “I would say it amounts to a crisis.”

China’s CSI 300 tumbled more than 7 percent in early trade Thursday, again triggering the market’s circuit breaker. As well as roiling sentiment across Asia, it also battered European risk assets with the German DAX down 3.5 percent at 11 a.m. London time.

U.S. stock index futures also indicated a sharply lower open as investors focused on China’s swooning currency and economic slowdown.

China, the biggest economic story of the last 30 years, has soured in the eyes of many analysts. A stock market crash that began in the country last summer has thrown the vast difficulties officials are now facing into sharp relief. A raft of data has disappointed in recent months as the country’s leaders refocus the economy on consumption from manufacturing.

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Most Americans are one paycheck away from the street

America in 2016-Lou

 

 

Most Americans are one paycheck away from the street

Some 63% of people can’t deal with a $500 emergency

MarketWatch

Americans are starting 2016 with more job security, but most are still theoretically only one paycheck away from the street.

Approximately 63% of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair, according to a survey released Wednesday of 1,000 adults by personal finance website Bankrate.com, up slightly from 62% last year. Faced with an emergency, they say they would raise the money by reducing spending elsewhere (23%), borrowing from family and/or friends (15%) or using credit cards to bridge the gap (15%).

This lack of emergency savings could be a problem for millions of Americans. More than four in 10 Americans either experienced a major unexpected expense over the past 12 months or had an immediate family member who had an unexpected expense, Bankrate found. (The survey didn’t specify the impact of that expense.) “Without emergency savings, you may not have money to cover needed home repairs,” says Signe-Mary McKernan, senior fellow and economist at the Urban Institute, a nonprofit organization that focuses on social and economic policy. “Similarly, without emergency savings, people could raid their retirement account.”
The findings are strikingly similar to two other reports, one by the U.S. Federal Reserve survey of more than 4,000 adults released in 2014. “Savings are depleted for many households after the recession,” it found. Among those who had savings prior to 2008, 57% said they’d used up some or all of their savings in the Great Recession and its aftermath. And another survey of 1,000 adults released last year by personal finance website GOBankingRates.com found that most Americans (62%) have less than $1,000 in their savings account (although that doesn’t include retirement or other investment accounts).

Why aren’t people saving? Millions of Americans are struggling with student loans, medical bills and other debts, says Andrew Meadows, a San Francisco-based producer of “Broken Eggs,” a documentary about retirement. Central bankers hiked their short-term interest rate target last month to a range of 0.25% to 0.50% from near-zero, but that’s still a small return for savings left in bank accounts. Indeed, personal savings rates as a percentage of disposable income dropped from 11% in December 2012 to 4.6% in August 2015, according to the Bureau of Economic Analysis, and now hover at 5.5%.

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Listen To This Week’s Radio Show

Listen to my special New Years radio show. Today I review 2015 and give my views on 2016.-Lou

radio-microphone1

Listen Here

Financial New Years Resolutions We Should All Make

I appeared on Fox and Friends on New Years a few years ago to discuss Financial New Years Resolutions. All comments still apply.-Lou

 

Top DHS Screening Official Unable To Provide Stats On Refugees

This video should scare the crap out of you. The incompetence of this Administration is breathtaking and dangerous.-Lou

Sen Jeff Flake’s Waste Report : “Wastebook: The Farce Continues”

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Wastebook: The Farce Continues”

This year’s report from Senator Flack details unbelievable waste by the Federal Government.

We have almost $20 trillion in debt and this his what our government spends our money on (money we don’t have by the way)

 

Examples:

$1 million to study monkeys on a treadmill

$43 million for the worlds most expensive gas station

$21.5 million to subsidize political parties in Pakistan

$5 million for Hipster parties

Read the full report here, it will blow your mind

 

Signs of a Dying Society

Signs of a Dying Society

FBI statistics confirm a dramatic decline in violent crimes since 1991, yet the number of prisoners has doubled over approximately the same period. It’s but one sign of a deeply troubling decline. (Photo: PRCJ/file)

While Edward Snowden and Chelsea Manning and John Kiriakou are vilified for revealing vital information about spying and bombing and torture, a man who conspired with Goldman Sachs to make billions of dollars on the planned failure of subprime mortgages was honored by New York University for his “Outstanding Contributions to Society.”

This is one example of the distorted thinking leading to the demise of a once-vibrant American society. There are other signs of decay:

1. A House Bill Would View Corporate Crimes as ‘Honest Mistakes’

Wealthy conservatives are pushing a bill that would excuse corporate leaders from financial fraud, environmental pollution, and other crimes that America’s greatest criminals deem simply reckless or negligent. The Heritage Foundation attempts to rationalize, saying “someone who simply has an accident by being slightly careless can hardly be said to have acted with a ‘guilty mind.'”

One must wonder, then, what extremes of evil, in the minds of conservatives, led to criminal charges against people apparently aware of their actions: the Ohio woman who took coins from a fountain to buy food; the California man who broke into a church kitchento find something to eat; and the 90-year-old Florida activist who boldly tried to feed the homeless.

Of course, even without the explicit protection of Congress, CEOs are rarely charged for their crimes. Not a single Wall Street executive faced prosecution for the fraud-ridden 2008 financial crisis.

2. Unpaid Taxes of 500 Companies Could Pay for a Job for Every Unemployed American

For two years. At the nation’s median salary of $36,000, for all 8 million unemployed.

Citizens for Tax Justice reports that Fortune 500 companies are holding over $2 trillion in profits offshore to avoid taxes that would amount to over $600 billion. Our society desperately needs infrastructure repair, but 8 million potential jobs are being held hostage beyond our borders.

3. Almost 2/3 of American Families Couldn’t Afford a Single Pill of a Life-Saving Drug

62 percent of polled Americans said they couldn’t cover a $500 repair bill. If any of these Americans need a hepatitis pill from Gilead Sciences, or an anti-infection pill from Martin Shkreli’s company, they will have to do without.

An AARP study of 115 specialty drugs found that the average cost of a year’s worth of prescriptions was over $50,000, three times more than the average Social Security benefit. Although it’s true that most people don’t pay the full retail cost of medicine, the portion paid by insurance companies is ultimately passed on to consumers through higher premiums.

Pharmaceutical companies pay competitors to keep generic drugs out of the market, and they have successfully lobbied Congress to keep Medicare from bargaining for lower drug prices. The companies claim they need the high prices to pay for better medicines. But for every $1 they spend on basic research, they invest $19 in promotion and marketing.

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Have You Heard Of This Digital Currency That’s A Total Scam?

 

Have You Heard Of This Digital Currency That’s A Total Scam?

Sovereign Man

It was back in May 2010 that the very first ‘real world’ Bitcoin transaction was conducted: 10,000 bitcoins traded for two Papa John’s pizzas.

Today that transaction would be worth nearly $4 million, probably making those the most expensive pizzas in the history of the world.

But back then it was considered revolutionary to trade a ‘digital’ currency, something that few people really understood at the time, for a real product.

People are still skeptical of digital currency. But the concept itself is not so esoteric.

As Jim Rickards reminded me some time ago, MOST currencies are digital, even the US dollar.

The Federal Reserve’s estimate of US dollar money supply is $12.1 trillion; yet only about 10% of that is physical cash in circulation.

The rest—more than $10 trillion—is simply a series of entries in banks’ core system databases.

In other words, the money in your savings account isn’t piled up inside your bank’s vault. Far from it.

Your savings doesn’t really exist. It’s all just digits in an electronic account ledger.

And yet we transact with these digital currency units all the time.

Whenever you use a credit card or send a bank transfer, you’re using the digital form of your currency.

This concept actually dates back to the Middle Ages when Italian bankers realized that they could conduct their transactions without physical money.

Rather than risk transporting gold coins across the countryside, medieval bankers merely annotated their ledgers with debit and credit entries.

They didn’t have the computers, but it was the same concept– they kept track of transactions and balances on account ledgers, instead of with physical money.

In the late 1960s, the IMF took this idea to the next level when they created their own digital currency for the exclusive use of governments and central banks.

They’re called Special Drawing Rights (SDR, or XDR).

And even though the IMF’s balance sheet totals nearly 300 billion SDR (around $211 billion USD), not a single SDR exists in physical form.

100% of the SDR money supply is digital. Just like Bitcoin, it exists in computer databases, making it the digital equivalent of a 500-year old accounting system.

There is one key difference, though.

No one controls Bitcoin. But dollars, euros, SDR, etc., are controlled by central banks.

Federal Reserve, Banque du Canada, Bank of Japan, etc. all decide how much of their currencies to create.

The SDR in particular is a total scam; the entire reason it was created was because the system didn’t have enough real savings.

So they ‘solved’ the problem by creating a new digital currency that allowed them to easily conjure more money out of thin air.

But the even bigger risk is the commercial banks, which control your account balances. They keep all the records and ledgers, they hold all the keys.

This means that the ‘money’ in your savings account isn’t really yours. You don’t actually have any savings.

What you really have is a claim on your bank’s savings. Your account is just an entry in the liability column of their digital ledger.

When you make a deposit, you’re trading your money for a banker’s promise to repay you.

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Debt ceiling lifted, and the same day, debt jumps $339B

It’s all games and more games.-Lou

 

 

Debt ceiling lifted, and the same day, debt jumps $339B

 

Washington Examiner

The U.S. national debt jumped $339 billion on Monday, the same day President Obama signed into law legislation suspending the debt ceiling.

That legislation allowed the government to borrow as much as it wants above the $18.1 trillion debt ceiling that had been in place.

The website that reports the exact tally of the debt said the U.S. government owed $18.153 trillion last Friday, and said that number surged to $18.492 on Monday.

The increase reflects an increasingly common pattern that can be seen in the total U.S. debt level when the debt ceiling is reached.

At the end of 2012, for example, the government hit the debt ceiling, and the Treasury Department was forced to use “extraordinary measures” to keep the government afloat until the ceiling could be increased again. Those measures included decisions to delay issuances of certain debt instruments.

When the ceiling was finally lifted a little more than a month later, the debt jumped $40 billion in a day as the pressure to stay under the ceiling eased, and after nine days, the U.S. was $100 billion deeper in debt.

In February 2013, the debt ceiling was suspended until mid-May. Extraordinary measures were again used through mid October, and the official debt burden hovered in place for more than six months. When the debt ceiling was suspended again in October, the debt exploded by $300 billion the next day.

This time around, the national debt has been frozen at its ceiling of about $18.1 trillion since late January, longer than nine months. The Bipartisan Policy Center estimated that the government had somewhere around $370 billion worth of extraordinary measures to use this time around.

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