If ever we needed an RV

[cbisinger]

By Michael Snyder - BLN Contributing Writer

Will global financial markets reach a breaking point during the month of October? Right now there are all kinds of signs that the financial world is about to experience a nervous breakdown. Massive amounts of investor money is being pulled out of the stock market and mammoth bets are being made against the S&P 500 in October. The European debt crisis continues to grow even worse and weird financial moves are being made all over the globe. Does all of this unusual activity indicate that something big is about to happen? Let's hope not. But historically, the biggest stock market crashes have tended to happen in the fall. So are we on the verge of a "Black October"?

The following are 21 signs that something big is about to happen in the financial world and that global financial markets are on the verge of a nervous breakdown....

#1 We are seeing an amazing number of bets against the S&P 500 right now. According to CNN, the number of bets against the S&P 500 rose to the highest level in a year last month. But that was nothing compared to what we are seeing for October. The number of bets against the S&P 500 for the month of October is absolutely astounding. Somebody is going to make a monstrous amount of money if there is a stock market crash next month.

#2 Investors are pulling a huge amount of money out of stocks right now. Do they know something that we don't? The following is from a report in the Financial Post....

Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the collapse of Lehman Brothers Holdings Inc., adding to the $2.1 trillion rout in American stocks.

About $75 billion was withdrawn from funds that focus on shares during the past four months, according to data compiled by Bloomberg from the Investment Company Institute, a Washington-based trade group, and EPFR Global, a research firm in Cambridge, Massachusetts. Outflows totaled $72.8 billion from October 2008 through February 2009, following Lehman’s bankruptcy, the data show.

#3 Siemens has pulled more than half a billion euros out of two major French banks and has moved that money to the European Central Bank. Do they know something or are they just getting nervous?

#4 On Monday, Standard & Poor's cut Italy's credit rating from A+ to A.

#5 The European Central Bank is purchasing even more Italian and Spanish bonds in an attempt to cool down the burgeoning financial crisis in Europe.

#6 The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank have announced that they are going to make available an "unlimited" amount of money to European commercial banks in October, November and December.

#7 So far this year, the largest bank in Italy has lost over half of its value and the second largest bank in Italy is down 44 percent.

#8 Angela Merkel's coalition is getting embarrassed in local elections in Germany. A recent poll found that an astounding 82 percent of all Germans believe that her government is doing a bad job of handling the crisis in Greece. Right now, public opinion in Germany is very negative toward the bailouts, and that is really bad news for Greece.

#9 Greece is experiencing a full-blown economic collapse at this point. Just consider the following statistics from a recent editorial in the Guardian....

Consider first the scale of the crisis. After contracting in 2009 and 2010, GDP fell by a further 7.3% in the second quarter of 2011. Unemployment is approaching 900,000 and is projected to exceed 1.2 million, in a population of 11 million. These are figures reminiscent of the Great Depression of the 1930s.

#10 In 2009, Greece had a debt to GDP ratio of about 115%. Today, Greece has a debt to GDP ratio of about 160%. All of the austerity that has been imposed upon them has done nothing to solve their long-term problems.

#11 The yield on 1 year Greek bonds is now over 129 percent. A year ago the yield on those bonds was under 10 percent.

#12 Greek Deputy Finance Minister Filippos Sachinidis says that Greece only has enough cash to continue operating until next month.

#13 Italy now has a debt to GDP ratio of about 120% and their economy is far, far larger than the economy of Greece.

#14 The yield on 2 year Portuguese bonds is now over 17 percent. A year ago the yield on those bonds was about 4 percent.

#15 China seems to be concerned about the stability of European banks. The following is from a recent Reuters report....

A big market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, two sources told Reuters on Tuesday.

#16 European central banks are now buying more gold than they are selling. This is the first time that has happened in more than 20 years.

#17 The chief economist at the IMF says that the global economy has entered a "dangerous new phase".

#18 Israel has dumped 46 percent of its U.S. Treasuries and Russia has dumped 95 percent of its U.S. Treasuries. Do they know something that we don't?

#19 World financial markets are expecting that the Federal Reserve will announce a new bond-buying plan this week that will be designed to push long-term interest rates lower.

#20 If some wealthy investors believe that the Obama tax plan has a chance of getting through Congress, they may start dumping stocks before the end of this year in order to avoid getting taxed at a much higher rate in 2012.

#21 According to a study that was recently released by Merrill Lynch, the U.S. economy has an 80% chance of going into another recession.

When financial markets get really jumpy like this, all it takes is one really big spark to set the dominoes in motion.

Hopefully nothing really big will happen in October.

Hopefully global financial markets will not experience a nervous breakdown.

But right now things look a little bit more like 2008 every single day.

None of the problems that caused the financial crisis of 2008 have been fixed, and the world financial system is more vulnerable today than it ever has been since the end of World War II.

As I wrote about yesterday, the U.S. economy has never really recovered from the last financial crisis.

If we see another major financial crash in the coming months, the consequences would be absolutely devastating.

We have been softened up and we are ready for the knockout blow.

Let's just hope that the financial world can keep it together.

We don't need more economic pain right about now.

http://www.blacklistednews.com/index.php

[Alex38]

Agreed.

[nettie]

I'm not an over religious person, however last night before I went to bed I prayed so hard that God would help us help ourselves with the economy. It's so bad, and I'm not sure where it's going to take us all before it ends. Peace to all.

[NotAChance]

Unfortunately, the RV has absolutely nothing to do with what we want or need. If it makes sense for Iraq, the dinar will be revalued. If it doesn't, it won't. And, in my opinion, it makes no sense for Iraq to RV.

[cbisinger]

Unfortunately, the RV has absolutely nothing to do with what we want or need. If it makes sense for Iraq, the dinar will be revalued. If it doesn't, it won't. And, in my opinion, it makes no sense for Iraq to RV.

They have "NEVER" said they will RV they have only ever said that they "will" RD.

It would make compleate sense to RD, their money would be much more manageable, easier to coun't, something that must consume a lot of business time simply counting huge numbers in daily trading, efectivlty the same as the dollar, they could then dispense with using the dollar. The IQD could allso trade globably and no RV in sight

Sorry to pessamistic as this senario does us no good what so ever.

[Captjohn]

The revaluation of the IQD, that is, lifting it from its current artificial rate of 1168 to a value that truly reflects the asset base that underpins it (gold and oil) would help jump start world financial markets. And yet, the GOI continues to bicker and drag their feet. We can only hope that Shabibi says finally, "enough of this, time is up, we RV now, without further delay". Does he have a pair? We shall see.

[NotAChance]

The revaluation of the IQD, that is, lifting it from its current artificial rate of 1168 to a value that truly reflects the asset base that underpins it (gold and oil) would help jump start world financial markets. And yet, the GOI continues to bicker and drag their feet. We can only hope that Shabibi says finally, "enough of this, time is up, we RV now, without further delay". Does he have a pair? We shall see.

Nothing "underpins" the dinar. It is a fiat currency. It's value is declared by gov't decree. It is no different than any other currency out there, including the US dollar. You are correct that the exchange rate is artificial because it is set daily by the CBI and not by the currency market. But it is wrong to assume that it will go up in value if it is allowed to float. That's a grand assumption. Many things determine the rate at which people are willing to exchange dinar for other currencies. The amount of oil is only a very, very small part of it. Political stability, economic diversification and growth, and inflation (monetary expansion) are much more important. History is littered with failed currencies from resource rich countries.

Edited September 22, 2011 by NotAChance

[lizabeth1]

just sit back and watch what happens....maybe we will be amazed...l.ets hope so...

[imgesing]

Nothing "underpins" the dinar. It is a fiat currency. It's value is declared by gov't decree. It is no different than any other currency out there, including the US dollar. You are correct that the exchange rate is artificial because it is set daily by the CBI and not by the currency market. But it is wrong to assume that it will go up in value if it is allowed to float. That's a grand assumption. Many things determine the rate at which people are willing to exchange dinar for other currencies. The amount of oil is only a very, very small part of it. Political stability, economic diversification and growth, and inflation (monetary expansion) are much more important. History is littered with failed currencies from resource rich countries.

Yes everything you said is true. You also must consider their GNP and competition and trading with surrounding Arab Nations. I suspect they will RV not RD at a nice rate. Yet, like the rest of us we are in a speculative venture. The only truth is that not a single one of us here knows what will happen for sure. It may very well be one of the better kept secrets of the last 8 years. If I didnt think this would do well I would have invested in something else.

Peace...

[umbertino]

The revaluation of the IQD, that is, lifting it from its current artificial rate of 1168 to a value that truly reflects the asset base that underpins it (gold and oil) would help jump start world financial markets. And yet, the GOI continues to bicker and drag their feet. We can only hope that Shabibi says finally, "enough of this, time is up, we RV now, without further delay". Does he have a pair? We shall see.

It's very evident at this point ( it was even before,actually) that it takes Men with nuts to accomplish this ...,,,

Not Maliki nor Shabibi seem to have them.

[Francie26]

It's very evident at this point ( it was even before,actually) that it takes Men with nuts to accomplish this ...,,,

Not Maliki nor Shabibi seem to have them.

Or better yet, women.

[capt.cliff]

I want to make a reply to Micheal Syder's Post, you will have to look back to the post as I made my opinions in the same order as he posted his----mostly I am in agreement with him but just put my own take on them also--

#1 Buy on fear ,watch for the bounce ,sell on the upside---bottom fishing!

#2 investors need to pay bills, largest players are small investors [Millions of them]--72 billion is big to us but not in day to day trading --frequently goes way higher

#3 Siemans could of gotten a better rate from the ECB--happens all the time .25 can be billions for major players---they get better rates then we do!

#4 it is Italty same as greece

#5 silly move spending good money after bad!

#6 see number 5

#7 see greece's record

#8 gives credence the Germany and France are reprinting their countries money --how long can they bear the brunt of bailing out a bottomless well and kept coming up dry!

#9 Good after bad 90 % of the popularion can't work for the government or be dependent on the government for entitilements

{wake up pres]

#10 out of control , nothing will pull them back except TOTAL DEFAULT and starting over from the beginning!

# 11 No one will buy their debt even at that interest rate----sound familar---[wake up Pres]

#12 Greece one month cash to operate--why should anyone bail out a boat that has already sunk!

# 13 italy--back to the sunk boat

#14 same as greece

# 15---not surprised Chins has stated already it is not willing to buy more US debt due to not trusting our ability to pay back the money. They are paying for many of the comodity buying spree that they are on with US debt--pretty smart!

#16 Refinance the return to a commodity valued money standard---what the country is worth in reall assets! as to the ability of the country to repay their debt { no more fiat money]

#17 DUH!

#18 ahead of the curve for both countries--China is doing the same thing!

#19 could happen making it harder to sell new long term debt!

# 20 Good possibility that is a contributing factor to the sell off now

#21 80 % is being kind

Lastly Due to how far and the continuing fall of all the other currencies that is why the Iraqi Dinar could or will become a major reserve currency--their enconomy will be based on Phyiscal value instead of a fiat currency----that may be the real hold up here

The other shoe is about to fall!

thanks for the read, thats for the ability to express my opiniom

Capt Cliff