Performance of a Number of Global Stock Exchanges Year-To-Date

Except for a few Asian countries, and special situations not pictured perhaps, it looks like a global slump from here.

There are still a select few unbroken housing bubbles out there that may find some adjustment in a future capital crisis.  Canada and Australia come to mind, among others.

Despite the billions of taxpayer funds poured into them, some if not quite a few of the troubled multinational Banks are still in trouble, and a few may be teetering.

Does anyone who is well informed not recognize that the policy errors of the Central Banks and their political cronies have failed to foster a sustainable recovery after five long years of enormous bank subsidies and public misery?

And the fruits of this selfish foolishness may likely be another crisis that is even more decisive?

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.


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GolemXIV: Trouble In Bankland

In the US:

• Home Equity Loans (HELOCs) are up 20% this year. 15% of all home loans originated are home equity extraction loans.
• People are taking equity out of their homes in the reigniting housing bubble, but adding to their bank debt.
• Student loans now total $1.2 Trillion.
• Nearly 35% of student loans [I believe David inadvertently says HELOC at one point] given to people under 30 are now 90 days delinquent.
• There are $924 Billion in auto loans, with nearly one third being subprime.
• It will not take much of a downturn for the HELOCs to go underwater.
• Jobs for those servicing new student loans are often low paid and hard to find and could become scarcer prompting more defaults.

In Europe:

• Royal Bank of Scotland (RBS) has now lost ALL of the £46 Billion bailout from taxpayers
• Espirito Santo recently went bankrupt AFTER recently passing the ECB stress test.
• Not only the bank, but the entire Espirito Santo group went bankrupt, after the bank sold their associated debt to unsuspecting clients.
• This certainly does not inspire confidence in any of the ECB testing of the Banks. We would have no confidence in an agency that tested cars with these kinds of results.
• There were fifteen other EU banks that passed in the weak manner of Espirito Santo.
• The Spanish/Italian/Greek Banks were allowed to count tax credits from the government as assets.
• What if China decides to support its domestic coal production by assessing a 3 to 6 percent surcharge on imported Australian coal? It would dampen exports and GDP.
• Australia's huge housing bubble is counting on 8 to 12 percent house increase NEXT year.

If things go south, the ECB,  Fed, and other Central Banks will have to engage in another enormous bailout.





Source: GolemXIV

Gold Daily and Silver Weekly Charts - A Little Flight to Safety

Gold caught a little 'flight to safety' today as stocks fell out of bed in the last hour of trading.

Silver cannot seem to get out of its own way, but managed to post a little gain in the aftermarket.

As a reminder, this Friday is a stock option expiration, so let's be on the lookout for the games Wall Street people play.

There was no real economic news in the US for Columbus Day holiday, but we have some news later this week, and as always earnings reports.

I don't know if it is the November elections effect or what, but the commentary on American television is going from silly to absurd. The Very Serious People in New York and Washington must be living in some alternate universe.

Let's see what happens when the adults come back to work tomorrow. We will probably see some follow on selling in overseas markets, although it was not quite clear what triggered the big selloff this afternoon. Just skittish, perhaps.  And some pre-option expiration hijinks.

As J. M. Keynes observed, it is not a good policy to allow your investment allocations and price discovery to be decided by a casino.  And that is exactly what is being done in the West.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - A Whiff of Panic - Option Expiration on Friday

Stocks were weak all day, but then turned decidedly south in the last hour of trading.

I posted the Year-To-Date stock market performance earlier today here. Jim Rickards also made a 'crash call' yesterday and I note it in this post. Marc Faber is pretty much there as well. His video is worth seeing.

I am a bit cynical, considering that there is a stock option expiration on Friday. We'll see more selling overnight most likely, and perhaps some follow through tomorrow. The NDX and SP500 futures charts don't have much room to go lower and stick a close without some technical damage. And the 200 DMA on the cash SP 500 is now shot to hell.

Let's see if the bots and the Fed can manage to turn things around later this week, and make for a happy options expiration having cleaned out the bulls, and then whipsaw the put buyers.

There will be more economic news later this week, and also earnings reports.

But as I said the markets are skittish.

Someone sent me a message last week with a link to some stock advisor who dismissed my cautions about an exceptionally edgy stock market, telling his followers to stay fully invested. After all, I am just a 'metalhead.'  Well, how did you like that VIX today? As Dr. Phil says, how's that working out for you?

I am keeping an open mind for now.   This is still a very technical market.  No crash calls here, yet.

But I own no stocks, just gold exposure. I am laying off silver until it figures out how to get out of its own way. As always, none of these comments touch upon my long term investments which are just 'there.'

Protect yourselves. 

Have a pleasant evening.