Tag Archives: Economic Decline

China Could Be Facing Their Own “1929 Stock Crash”

The Chinese government has been scrambling over the last few days in an attempt to stave off a massive stock collapse similar to the 1929 U.S. stock market crash which caused the Great Depression.

The Wall Street Journal said Wednesday that it appears the Chinese government is losing control of the market despite efforts to stop the slide.  The stock market has already begun to impact other parts of the Chinese economy, with the country’s bond and currency markets starting declines.

The Shanghai Composite Index (SCI) fell 5.9% on Wednesday and has lost 33% of its value since a peak on June 12.  The total of the loss, $3.5 trillion, is nearly five times the value of computer giant Apple, Inc.

“Beijing’s latest bid to calm the market has had the opposite effect,” said Bernard Aw, market analyst at IG Group, told the Journal. “The panic is spreading, and authorities appear to be grasping at straws to hold back the tide.”

While most of the world is focused on Greece, which as a nation has a gross domestic product for a year that totals only 13% of the losses on the Chinese stock market since June 12.

“China’s stock market had become detached from the reality of China’s own economy, and appallingly overvalued,” Patrick Chovanec, managing director at Silvercrest Asset Management, posted on Twitter.

Chinese government officials pushed more money to brokerage houses Wednesday in an attempt to prop up the market.  Over 1,300 Chinese companies, almost half the total in the market, have suspended their stock trading.

Some Greek Banks May Close Even With National Bailout

Some of Greece’s larger banks could end up disappearing as a result of the economic collapse taking place in their nation.

European officials confirmed to Reuters that some weaker banks will be taken over by larger rivals in a restructuring of the banking industry.  They estimated that two of the four major banks — National Bank of Greece, Eurobank, Piraeus and Alpha Bank — could end up being absorbed by other banks.

“The Greek economy is in ruins. That means the banks need a restart,” an official told Reuters. “Cyprus could be a role model.  You have a tiny bit of time … you would do restructuring straight away.”

The plan is expected to meet fierce Greek resistance.

The news from the EU officials comes as Greek government officials confirmed they would be extending bank closures and putting a 60-euro limit on ATM withdrawals until Monday because the European Central Bank (ECB) decided not to increase support for Greek banks until a solution is found for the current economic default.

Greek citizens have been attempting to clear out bank accounts and spend their money fearing that their deposits could be seized in a bailout deal.

The EU is facing internal conflict as Germany, the biggest creditor for Greece, is resisting calls to restructure Greece’s debt.

“Greece is in a situation of acute crisis, which needs to be addressed seriously and promptly,” International Monetary Fund chief Christine Lagarde said at the Brookings Institution think-tank in Washington.

New York Stock Exchange Halted By Computer Glitch

Trading at the New York Stock Exchange (NYSE) was suddenly halted around 11:32 a.m. Eastern Time because of what officials termed a “computer glitch.”

The market was down over 200 points (over 1%) at the time of the halt.

“We’re currently experiencing a technical issue that we’re working to resolve as quickly as possible,” Marissa Arnold, an NYSE spokeswoman, said in an e-mailed statement. “We will be providing further updates as soon as we can, and are doing our utmost to produce a swift resolution, communicate thoroughly and transparently, and ensure a timely and orderly market re-open.”

The Nasdaq reported to problems and said they continue to trade stocks that are listed on the NYSE.

“It’s been a little bit of a bumpy day. We had some technical problems even before the opening,” said Art Cashin, director of floor operations at the NYSE, in a CNBC interview.

“This will not cause a move in any particular direction, so I would kind of wait it out and see what happens,” he added.

The uncertainty about Greece and a massive selling of Chinese stocks were driving the market lower.

The Department of Homeland Security told CNN they found “no sign of malicious activity” at the stock exchange and no sign of a cyberattack.

Greece Given Until End of the Week For Economic Proposal

Greece has until the end of the week.

That’s the message being sent by European leaders who are meeting to discuss the nation’s rejection of austerity measures and bailout terms to help the country out of their default to the International Monetary Fund (IMF).

The deadline comes after a heated meeting Tuesday among members of the European Union.  If there is not an acceptable proposal on Sunday, Greece could be ejected from the Eurozone.

“The stark reality is that we only have five days to find the ultimate agreement,” said a visibly irritated Donald Tusk, the European Council president. “Until now I have avoided talking about deadlines. But tonight I have to say it loud and clear — the final deadline ends this week.”

“I’m strongly against Grexit (the nickname for a Greece exit from the Eurozone),” European Commission President Jean-Claude Juncker said. “But I can’t prevent it if the Greek government is not doing what we expect the Greek government to do.”

Greece’s Prime Minister Alexis Tsipras had told Greek voters if they rejected the referendum he could make a deal with Europe “within 48 hours.”  That time limit passed without a formal proposal and only some comments from the nation’s new finance minister reading off handwritten notes.

French President Francois Hollande said that the European Central Bank (ECB) would likely provide money Wednesday to keep Greek banks afloat through Sunday.

Greece Votes No To Bailout Terms

Greek voters sent a firm “no” to the demands of European creditors when they voted by a 61-39% margin on Sunday’s referendum on austerity measures.

While the citizens of the country cheered, the rest of the world watched as the nation took steps closer to bankruptcy and bank failure. The banks in Greece had been shut down for the last week because of low balances and were only running because of emergency funds from the European Central Bank.  ECB officials plan to meet Monday to see if they continue to prop up the banks and if so, for how long.

Voters told news outlets they were tired of the demands of creditors and that a rejection of tax increases and pension cuts was “a matter of national dignity” according to the New York Times.

The vote was also seen as a victory for Prime Minister Alexis Tsipras, who ran on a campaign platform of rejecting new austerity measures.  He claims that the vote was not a vote to “rupture” from Europe.

“I’m fully aware that the mandate that I was given (by voters) is not for a rupture with Europe, but a mandate boosting our negotiating strength for reaching a sustainable deal,” Tsipras said.   “The people today replied to the right question.  They did not answer to the question in or out of the euro. This question needs to be taken out of the discussion, once and for all.”

European observers say, however, it’s now likely Greece will be forced into bankruptcy and removal from the Euro.  A possible expulsion from the European Union is now on the table.

Markets across the country saw tumbles due to the Greek rejection of the referendum.  The only market that did not show a massive decline was China, because the Chinese government dumped a massive stimulus into the economy.

Oil Prices Tumbling; Global Economy Slowing

World oil prices are continuing a downhill slide amid fears the world economy is slowing and could go back into recession.

Brent crude oil fell to near four-year lows and the US standard, West Texas Intermediate, lost more than a dollar.  Brent has lost almost 28 percent of its value since June.

The slide comes as economic news makes it appear the world is facing another slowdown or possible recession.  China’s consumer inflation fell to a five-year low this week and prices for U.S. producers fell for the first time in a year.

Also, US crude oil inventories rose at a level almost four times higher than previously estimated by analysts.

The news led to downward rallies on Wall Street with the Dow losing hundreds.

World leaders from oil producing countries are calling for emergency meetings to try and stop the slide in oil prices.    The International Energy Agency is cutting predictions for oil growth in 2015 as a result of the recent conditions.

The Imminent Judgment of God (Pt. 2)

John Shorey made the point that the middle class is disappearing in this country and we now have the very rich and those who are working two jobs at Walmart and McDonalds to make ends meet! John continued to read from Racing Towards Judgment, “God will judge this nation with economic disasters. Critical money problems will strike large and small cities alike.”

Then, David Wilkerson addresses the current issues of our day (in Racing Towards Judgment) that are in our news headlines with chilling accuracy; “There will be violence everywhere. Unheard of violence. Unbelievable violence. Unnecessary violence. Uncontrollable violence. The violence seething beneath the surface for years will explode.” They are saying today, this week, that crime is rising and even death. There is unrest in America, and when all this poverty hits and there is no food, it’s going to explode like crazy! If 50 million people suddenly did not receive their food stamp allocations, we will be seeing violence erupting in virtually every city in America. Continue reading →

Revelation 13 (Pt. 6)

For some time the world has been moving toward a cashless society. Soon, we are told, even checks will be a part of our economic history as more and more transactions will be done electronically. You know how this works; you probably pay many of your monthly bills now without ever taking a dollar out of your wallet or writing a check. Your computer is set to make the transaction for you in the right amount and on the proper date. It’s easy and convenient. After all, you could lose cash or misplace the checks. Even credit cards will soon be history. With increasing threats of identity theft, the world will be ready and willing to accept some way of maintaining control. All of your per­sonal information, from your bank accounts to your medical records, will be computerized and stored online, perhaps in the cyberspace “cloud.” Continue reading →

Venezuelan Troops Stop Food Protests

Thousands of Venezuelan citizens attempted to have an “empty pots march” to the country’s food ministry Saturday in protest of chronic food shortages when military troops forced them to disburse at gunpoint.

The move by the military is the latest effort by the Maduro government to stop public opposition to his government.

Activists said over 5,000 people banged pots and blew horns as they marched toward the capital with banners pointing out massive shortages of flour, milk and toilet paper.  In addition to the capital, similar protests were held in five other cities.

“There’s nothing to buy,” one of the marchers told The Guardian newspaper.  “You can only buy what the government lets enter the country because everything is imported.  There is no beef.  There is no chicken.”

The food protests are the latest outcries against the Maduro government, which has allowed 56 percent inflation to remain unchecked and has done little to lower one of the world’s highest murder rates.

Officials with the Maduro government say that no protests are actually started by native Venezuelans, but are rather efforts of the United States, Panama and other nations to undermine the country’s socialist leadership.

Food Stamp Use By Troops Skyrockets

A new study from the Defense Commissary Agency says that food stamp use by soldiers and their families has skyrocketed during the current administration.

The DCA report says that use of the Supplemental Nutrition Assistance Program has more than tripled since 2008.  In 2008, the amount of SNAP benefits used by troops was $31.1 million.  At the end of fiscal year 2013, the amount used by troops had jumped to $103.6 million.

The report did show the rate of increase is slowing.

Pentagon officials interviewed by CNN said they do not track soldiers who are receiving assistance but that the troops using food stamps are likely those who are at the bottom of the ranks.  Base pay for a new soldier with a spouse and child is about $20,000.

The amount given to soldiers is only a small amount of the $80 billion annually given out on the food stamp program.