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I will admit that I am extremely concerned about the second half of 2012. Historically, a financial crisis is much more likely to begin in the fall than during any other season of the year. Just think about it. The stock market crash of 1929 happened in the fall.
"Black Monday" happened on October 19th, 1987. The financial crisis of 2008 started in the fall. There just seems to be something about the fall that brings out the worst in the financial markets. But of course there is not a stock market crash every year. So are there specific reasons why we should be extremely concerned about what is coming this year? Yes, there are.
"Black Monday" happened on October 19th, 1987. The financial crisis of 2008 started in the fall. There just seems to be something about the fall that brings out the worst in the financial markets. But of course there is not a stock market crash every year. So are there specific reasons why we should be extremely concerned about what is coming this year? Yes, there are.
The ingredients for a "perfect storm" are slowly coming together, and in the months ahead we could very well see the next wave of the economic collapse strike. Sadly, we have never even come close to recovering from the last recession, and this next crisis might end up being even more painful than the last one.
The following are 17 reasons to be extremely concerned about the second half of 2012....
#1 Historical Trends
A recent IMF research paper by Luc Laeven and Fabián Valencia showed that a banking crisis is far more likely to start in September than in any other month. The following chart is from their report....
So what will this September bring?
#2 JP Morgan
Do you remember back in May when JP Morgan announced that it would be taking a 2 billion dollar trading loss on some derivatives trades gone bad? Well, the New York Times is now reporting that the real figure could reach 9 billion dollars, but nobody really knows for sure. At some point is JP Morgan going to need a bailout? If so, what is that going to do to the U.S. financial system?
#3 Derivatives
Last week, Moody's downgraded the credit ratings of 15 major global banks. As a result, a number of them have been required to post billions of dollars in additional collateral against derivatives exposures....
Remember, the 9 largest U.S. banks have a total of more than 200 trillion dollars of exposure to derivatives. When this bubble completely bursts it is going to be impossible to fix.
#4 LEAP/E2020 Warning
LEAP/E2020 has issued a red alert for the global financial system for this fall. They are warning that the "second half of 2012" will represent a "major inflection point" for the global economic system....
One recent survey of corporate executives found that only 20 percent of them expect the global economy to improve over the next 12 months and 48 percent of them expect the global economy to get worse over the next 12 months.
#6 Spain
The Spanish financial system is basically a total nightmare at this point. Moody's recently downgraded Spanish debt to one level above junk status, and earlier this week Moody's downgraded the credit ratings of 28 major Spanish banks.
According to CNBC, Spain's short-term borrowing costs are now about three times higher than they were just one month ago....
#7 Italy
The situation in Italy continues to deteriorate and many analysts believe that it could be one of the next dominoes to fall. The following is from a recent Businessweek article....
I have written extensively about the financial nightmare that is unfolding in Greece. Unemployment has soared past the 20 percent mark, youth unemployment is above 50 percent, the Greek economy has contracted by close to 25 percent over the past four years and now Greek politicians are saying that a third bailout package may be necessary.
#9 Cyprus
The tiny island nation of Cyprus has become the fifth member of the eurozone to formally request a bailout. This is yet another sign that the eurozone is rapidly falling apart.
#10 Germany
German Chancellor Angela Merkel continues to promote an austerity path for Europe and she continues to maintain her very firm position against any kind of eurozone debt sharing....
#11 Bank Runs
Every single day, hundreds of billions of dollars is being pulled out of banks in southern Europe. Much of that money is being transferred to banks in northern Europe.
In a previous article I included an extremely alarming quote from a CNBC article about the unfolding banking crisis in Europe....
#12 Preparations For The Collapse Of The Eurozone
As I have written about previously, the smart money has already written off southern Europe. All over the continent major financial institutions are preparing for the worst. For example, just check out what Visa Europe is doing....
All over the globe the flow of credit is beginning to freeze up. In fact, the Bank for International Settlements says that worldwide lending is contracting at the fastest pace since the financial crisis of 2008.
#14 Sophisticated Cyber Attacks On Banks
It is being reported that "very sophisticated" hackers have successfully raided dozens of banks in Europe. So far, it is being estimated that they have stolen 60 million euros....
#15 U.S. Municipal Bankruptcies
All over the United States there are cities and towns on the verge of financial disaster. This week Stockton, California became the largest U.S. city to ever declare bankruptcy, but the reality is that this is only just the beginning of the municipal debt crisis....
The U.S. economy is already a complete and total mess, and now the Obamacare decision is going to throw a huge wet blanket on it. All over America, small business owners are saying that they are going to have to let some workers go because they cannot afford to keep them all under Obamacare. It would be hard to imagine a more job killing law than Obamacare, and now that the Supreme Court decision has finally been announced we are going to see many businesses making some really hard decisions.
#17 The U.S. Election
It is being reported that Barack Obama is putting together an army of "thousands of lawyers" to deal with any disputes that arise over voting procedures or results. It certainly looks like this upcoming election is going to be extremely close, and there is the potential that we could end up facing another Bush v. Gore scenario where the fate of the presidency is determined in court. This campaign season is likely to be exceptionally nasty, and I fear what may happen if there is not a decisive winner on election day. The possibility of significant civil unrest is certainly there.
We definitely live in "interesting" times.
Personally, I am deeply concerned about the September, October, November timeframe.
The other day, Joe Biden delivered a speech in which he made the following statement....
When people lose everything, they tend to get desperate. And desperate people do desperate things - especially when they are angry.
A whole host of recent opinion polls have shown that anger and frustration in the United States are rising to unprecedented levels. The ingredients are certainly there for an explosion. Someone just needs to come along and light the fuse. We truly do live in frightening times.
Let us hope for the best, but let us also prepare for the worst.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.#2 JP Morgan
Do you remember back in May when JP Morgan announced that it would be taking a 2 billion dollar trading loss on some derivatives trades gone bad? Well, the New York Times is now reporting that the real figure could reach 9 billion dollars, but nobody really knows for sure. At some point is JP Morgan going to need a bailout? If so, what is that going to do to the U.S. financial system?
#3 Derivatives
Last week, Moody's downgraded the credit ratings of 15 major global banks. As a result, a number of them have been required to post billions of dollars in additional collateral against derivatives exposures....
Citigroup’s two-notch long-term rating downgrade from A3 to Baa2 could have led to US$500m in additional liquidity and funding demands due to derivative triggers and exchange margin requirements, according to the bank’s 10Q regulatory filing at the end of the first quarter.
Morgan Stanley – which Moody’s downgraded from A2 to Baa1 – said a two-notch downgrade from both Moody’s and Standard and Poor’s could spur an additional US$6.8bn of collateral requirements in its latest 10Q. The bank did not break down its potential collateral calls under a scenario where only Moody’s downgraded the bank below the Single A threshold.
Royal Bank of Scotland estimated it may have to post £9bn of collateral as a result of the one-notch Moody’s downgrade to Baa1 in a statement on June 21, but did not detail how much of this additional requirement was driven by margin for swaps exposures.The worldwide derivatives market is starting to show some cracks, and at some point this is going to become a major disaster.
Remember, the 9 largest U.S. banks have a total of more than 200 trillion dollars of exposure to derivatives. When this bubble completely bursts it is going to be impossible to fix.
#4 LEAP/E2020 Warning
LEAP/E2020 has issued a red alert for the global financial system for this fall. They are warning that the "second half of 2012" will represent a "major inflection point" for the global economic system....
The shock of the autumn 2008 will seem like a small summer storm compared to what will affect planet in several months.
#5 Increasing PessimismIn fact LEAP/E2020 has never seen the chronological convergence of such a series of explosive and so fundamental factors (economy, finances, geopolitical…) since 2006, the start of its work on the global systemic crisis. Logically, in our modest attempt to regularly publish a 'crisis weather forecast', we must therefore give our readers a 'Red Alert' because the upcoming events which are readying themselves to shake the world system next September/ October belong to this category.
One recent survey of corporate executives found that only 20 percent of them expect the global economy to improve over the next 12 months and 48 percent of them expect the global economy to get worse over the next 12 months.
#6 Spain
The Spanish financial system is basically a total nightmare at this point. Moody's recently downgraded Spanish debt to one level above junk status, and earlier this week Moody's downgraded the credit ratings of 28 major Spanish banks.
According to CNBC, Spain's short-term borrowing costs are now about three times higher than they were just one month ago....
Spain's short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country's precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks.
The yield paid on a 3-month bill was 2.362 percent, up from just 0.846 percent a month ago. For six-month paper, it leapt to 3.237 percent from 1.737 percent in May.Needless to say, this is very, very bad news.
#7 Italy
The situation in Italy continues to deteriorate and many analysts believe that it could be one of the next dominoes to fall. The following is from a recent Businessweek article....
The euro zone’s third-biggest economy is seen as the next domino at risk of toppling after the European Union’s June 9 deal to lend Spain $125 billion in bank bailout funds. Yields on Italy’s 10-year government bonds reached 6.2 percent on June 13, up from just 4.8 percent in March. By pushing up Italy’s borrowing costs out of fear of default, investors are making a default more likely.A recent Fortune article detailed some of the economic fundamentals that have so many economists deeply concerned about the Italian economy right now....
The main glaring risk threats that could propel Italy down the path to become Europe's next domino is the size of country's outstanding debt (at €1.9 trillion or 120% of GDP); the mountain of debt it has to roll over in the next 12 months (nearly €400 billion); and the market's cracking credibility around Prime Minister Mario Monti's ability to reduce the country's fiscal footprint and spur growth.
Further, fear around Italy's creditworthiness, which has recently been expressed by near cycle highs in sovereign CDS spreads and government yields on the 10-year bond, follow some rather glaring negative fundamentals over recent quarters and years: declining GDP over the last three consecutive quarters; a rising unemployment rate (especially among its youth); deterioration in labor market competitiveness; and increased competition for export goods to its key trading partners.#8 Greece
I have written extensively about the financial nightmare that is unfolding in Greece. Unemployment has soared past the 20 percent mark, youth unemployment is above 50 percent, the Greek economy has contracted by close to 25 percent over the past four years and now Greek politicians are saying that a third bailout package may be necessary.#9 Cyprus
The tiny island nation of Cyprus has become the fifth member of the eurozone to formally request a bailout. This is yet another sign that the eurozone is rapidly falling apart.
#10 Germany
German Chancellor Angela Merkel continues to promote an austerity path for Europe and she continues to maintain her very firm position against any kind of eurozone debt sharing....
Merkel, speaking to a conference in Berlin today as Spain announced it would formally seek aid for its banks, dismissed “euro bonds, euro bills and European deposit insurance with joint liability and much more” as “economically wrong and counterproductive,” saying that they ran against the German constitution.
'It’s not a bold prediction to say that in Brussels most eyes -- all eyes -- will be on Germany yet again,' Merkel said. 'I say quite openly: when I think of the summit on Thursday I’m concerned that once again the discussion will be far too much about all kinds of ideas for joint liability and far too little about improved oversight and structural measures.'In fact, Merkel says that there will be no eurobonds "as long as I live". This means that there will be no "quick fix" for the problems that are unfolding in Europe.
#11 Bank Runs
Every single day, hundreds of billions of dollars is being pulled out of banks in southern Europe. Much of that money is being transferred to banks in northern Europe.
In a previous article I included an extremely alarming quote from a CNBC article about the unfolding banking crisis in Europe....
Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros ($125,000), are reporting a "bank run by wire transfer" that has picked up during May.
Much of this money has headed north to banks in London, Frankfurt and Geneva, financial advisers say.
'It's been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer,' said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm.
How long can these bank runs continue before banking systems start to collapse?
#12 Preparations For The Collapse Of The EurozoneAs I have written about previously, the smart money has already written off southern Europe. All over the continent major financial institutions are preparing for the worst. For example, just check out what Visa Europe is doing....
Visa Europe is holding weekly meetings to discuss scenarios in the event the euro zone collapses, joining other companies that are preparing for a potential breakup of the currency bloc.
Chief Commercial Officer Steve Perry said Tuesday that management at the U.K.-based credit-card company meets weekly to explore various possible outcomes, including a total collapse of the euro zone.#13 Global Lending Is Slowing Down
All over the globe the flow of credit is beginning to freeze up. In fact, the Bank for International Settlements says that worldwide lending is contracting at the fastest pace since the financial crisis of 2008.
#14 Sophisticated Cyber Attacks On Banks
It is being reported that "very sophisticated" hackers have successfully raided dozens of banks in Europe. So far, it is being estimated that they have stolen 60 million euros....
Sixty million euro has been stolen from bank accounts in a massive cyber bank raid after fraudsters raided dozens of financial institutions around the world.
According to a joint report by software security firm McAfee and Guardian Analytics, more than 60 firms have suffered from what it has called an "insider level of understanding.What happens someday if we wake up and all the money in the banks is gone?
#15 U.S. Municipal Bankruptcies
All over the United States there are cities and towns on the verge of financial disaster. This week Stockton, California became the largest U.S. city to ever declare bankruptcy, but the reality is that this is only just the beginning of the municipal debt crisis....
Stockton, California, said it will file for bankruptcy after talks with bondholders and labor unions failed, making the agricultural center the biggest U.S. city to seek court protection from creditors.
'The city is fiscally insolvent and must seek Chapter 9 bankruptcy protection,' Stockton said in a statement released yesterday after its council voted 6-1 to adopt a spending plan for operating under bankruptcy protection.#16 The Obamacare Decision
The U.S. economy is already a complete and total mess, and now the Obamacare decision is going to throw a huge wet blanket on it. All over America, small business owners are saying that they are going to have to let some workers go because they cannot afford to keep them all under Obamacare. It would be hard to imagine a more job killing law than Obamacare, and now that the Supreme Court decision has finally been announced we are going to see many businesses making some really hard decisions.
#17 The U.S. Election
It is being reported that Barack Obama is putting together an army of "thousands of lawyers" to deal with any disputes that arise over voting procedures or results. It certainly looks like this upcoming election is going to be extremely close, and there is the potential that we could end up facing another Bush v. Gore scenario where the fate of the presidency is determined in court. This campaign season is likely to be exceptionally nasty, and I fear what may happen if there is not a decisive winner on election day. The possibility of significant civil unrest is certainly there.
We definitely live in "interesting" times.
Personally, I am deeply concerned about the September, October, November timeframe.
The other day, Joe Biden delivered a speech in which he made the following statement....
It's A Depression For Millions And Millions Of Americans.And what Biden said was right for once. Millions of Americans are out of work right now and millions of Americans have fallen out of the middle class in recent years. If you have lost everything, it does feel like you are living through a depression.
When people lose everything, they tend to get desperate. And desperate people do desperate things - especially when they are angry.
A whole host of recent opinion polls have shown that anger and frustration in the United States are rising to unprecedented levels. The ingredients are certainly there for an explosion. Someone just needs to come along and light the fuse. We truly do live in frightening times.
Let us hope for the best, but let us also prepare for the worst.
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19 comments:
Gee, I guess Wall St. getting it's pound of flesh from real people who work in the real economy is a really important issue for Michael Snyder. How about the fact that stock markets or other aggregates of criminal, er, I mean "financial" activity have nothing to do with the real economy?
I think that we are in for far worse than just an economic collapse. We are likely to get slammed with war, famine and disease as well. I figure that the big boys are going to use 2012 for all it's worth and give us one hell of a show.
Really? Who gives a 'friggin' whoop' about an "economic collapse"...bring it on! The corruption in every sector of our ruling elite (financial, political, religious, et al) runs so deep that, to those of us to whom a hundred dollars is meaningful, a billion-trillion-gazillion is meaningless! Let it all collapse! The sooner the better. Maybe then we (real people) can return to reality and begin to remember who we truly are. Until we acknowledge what gullible fools we've been, that we've been played like the useful idiots we've become, and begin to understand that the real villians/criminals are nothing more than slimey little crap shooters who have stolen and played with our lives and fortunes, mankind/humanity is stuck in its own willful ignorant state of existance. Beam Me UP!!
ELITE(corrupt) planned a lot of fireworks from Wall street to War street, all to obfuscate the ELECTION FARCE that installs democratic-dictator or http://members.beforeitsnews.com/story/1710/724/Democratic-Dictatorship_Dichotomy.html
Apart from AGENDA NWO by ELITE(corrupt):
http://members.beforeitsnews.com/story/1751/787/AGENDA_NWO:_Screw_the_MEN.html?currentSplittedPage=0
Only recourse is to 'STAY UNITED and ACT UNITED' to combat above UNILATERAL ELITE agenda!
It's about goddam time! This should have happened long ago. The parasites keep propping up their corrupt system using our blood sweat and tears.
ITS SHTF TIME FOLKS !
F*"k the economic collapse. Let it collapse these whatever you want to call them only designed it for their own purpose. Lets swash these parasites and make a better world for the human race. Even as we speak their foundations are shaking. Freedom for the people
SWP... CA.
""Every single day, hundreds of billions of dollars is being pulled out of banks in southern Europe. Much of that money is being transferred to banks in northern Europe.""
Wow does it matter what bank the Money is in.They are all some what tied together via the loop of IMF and the Fraud they run.I think this is what it is going to take to finally rid the world of these parasites.When it all comes crashing down around us and the people will want to put the Blame where the Blame is due,there will be no rock for them to hide under.Sooner or later they will have to come to the surface for air and that will be their undoing.One by one,group by group will meet their demise and justice dealt firmly and harshly.The new Spring that will dawn will see a more polite society.Bankers and the like will be just a faded memory.There will be a new order and it won't be run by them.The people will once again stand tall and rule and Governments will be just a footnote of their former self.
We are screwed as people and things are going to hit the fan and soon! There will be Marshal Law so stock up on guns,Ammo,dry foods,water,Cash.
Time for a mass strike!! A really easy one would be a voter's strike, "Stay home, don't vote". The outcome of this coming election has already been decided by the Bilderbergs,CFR and Tri-Lats anyway so why bother!
Discuss other forms of mass strike as well; how about everyone stay home from work for a day out of the week (of course the day should be decided ahead of time and commitments obtained to make it work).
Anyway, it's time we decide to do SOMETHING!
Excellent, then we can send the drones after the banksters and their cohorts, put them in jail and get back to business without their usury!
It's called trading, remember we used to do that!
The most important thing to note, the #1 reason to be concerned is that we(the human race) have been here before, more than once.
And it always ends badly for most of the regular folks.
And it is always planned that way by the few that always benefit from it.
Complete economic, social and political destruction and chaos was used in the 1920's to facilitate the rise of the National Socialists in Germany.
Then in the early 1930's they received over 30 billion dollars from the U.S FED so that they could repair the damage that was done prepping for their rise to power.
During that same time period the American people became extremely distrustful of their government after the discovery that most of the claims made against the German's during WWI to get people to support war with them turned out to be total BS propaganda.
So in the 1920's America's leading businessmen and women pushed policies of non-interference economic governance that helped bolster the corporations that had been facing a significant decline since the end of WWI.
And they screwed most of the average Americans who were "laid-off"/fired, cut back on full-time hours and cut benefits and such in order to bolster their companies at the expense of the working class.
When the reality that while corporations were back to making more money the average American worker was making far less finally hit home it exploded into the Great Depression.
And the people that caused it then turned around and said that more government control/interference was the solution.
And then Americans became way too dependent on the government to provide for them, paving the way for a shift in public perception back to trusting the government again.(don't bite the Hand that feeds you)
That trust in the government then paved the way for American entry into WWII.
Just as the current situation is being used to pave the way for WWIII.
There is no chance in hell the largely anti-government American people of the 1920's would have supported another war with Germany without the conditioning that came with the government taking so much control over their lives.
It was the Great Depression that drove many of them back into the arms of 'Big Brother' out of survival needs.
And even then they still needed Pearl Harbor in order to provide enough public support to get into the war.
And of course it allowed the tax-payers to pay to fix the messes the private corporations created, and consolidate new corporate empires from the old One's.
Nothing in this world happens by accident, not at that scale anyways.
Yes, let it collapse. The elite insiders will do just fine. The rest of us will lose everything, including our lives. Look up the Georgia Guidestones and the Denver Airport Mural.
To the person that suggested no one vote. Even if no one did, the results would rain in on every televised outlet of the corp/gov controlled mass media. After all, they're all owned by a mere 6 people. Everything we are witnessing, is by systematic design and they're not even being subtle. The majority of those who still believe themselves to be free, are simply well programmed sheep, awaiting their unimaginable fates.
Nothing is going to happen nothing at all. Things will stay exactly the as they are (just the way the PTB want it). Why?
Because nothing needs to happen when you have people putting list like this together to keep the fear going the PTB need do nothing more than sit back and let their controlled opposition keep the ball rolling for them.
Why would they screw up the perfect fleecing machine they have going by having an event.
The game is over this whole "we can take our country back" crap is exactly that crap fed to you by controlled opposition.
The Truth hurts and hurts bad so no one will ever accept it and the PTB know this so they keep giving us sweet little lies (via the so called patriot movement more like bowel movement)
If your waiting for a US city to blow up or the economy to crash or any one of a hundred other tragic events to take place you're mind is right where they want it and all they need is for you to keep thinking about those things.
for if they can keep everybody concerned about all these tragic events then none need to actually take place.
2012 the biggest Hype ever.
We create our own reality. Think positive thoughts and we will create positive outcomes. Nothing can overcome the power of thought. Watch for positive indicators and know that all will be well. Somguy
Bring it. Let all these 'too big to fail' bankster pigs lose it all. And for all us 99-percenters....don't forget to max out your credit cards and quit paying the bill. What are they going to do when 100 million of us quit politely paying the monthly vig?
California's a city?? Really?
"The euro zone’s THIRD-BIGGEST ECONOMY is seen as the next domino at risk of toppling after the European Union’s June 9 deal to lend SPAIN $125 billion in bank bailout funds."
When did Spain became the "euro zone's third-biggest economy"? Did I miss something?
The US Government debt is due 14 September 2012, the current debt is estimated to be over $122 trillion. To see the debt of key governments across the world including the debt of US and the 9 largest US banks stacked in USD $ see the economic infographics website:
http://demonocracy.info
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