Thursday, June 6, 2013


There are numerous signs that another stock market crash is possible, but as the whole thing is rigged it is actually quite impossible to know when such a thing is likely to occur. However, with the emergence of another Hindenburg Omen, housing stats that spell trouble, banks that are mimicking the exact same principles that tanked the market in 2008, these are just a few of the warning signs that economic Armageddon may be right around the corner.

Take housing which has had a tremendous jump in prices these last few months as property is becoming harder to find. Many see this as a sign the market is rebounding from record lows. The truth of the matter is that sentiment is not true. For sales houses are being bought en masse by hedge funds and equity firms who see low prices as a way to invest their money and make a profit. With no money down offers to the well off from banks, the elites are buying all the property, turning some into rental units while flipping the rest, which are driving costs upward again, just like the buildup to 2008. This is a ponzi scheme where it will work until you run out of buyers or renters for the properties you own and the then the whole house of cards falls over again. To quote Yogi Berra "It's deju vu all over again."

One such investment company is the Blackstone Group, which have bought thousands of homes in areas hit hardest by the financial crisis. They own 26,000 in nine states. Another is Colony Capital, based out of LA, is spending $250 million every month on housing and owns at least 10,000 right now. This is where all the buying is going, not to individuals which now make up less than 20% of the housing buying public with foreclosures, or the most seriously discounted properties. This is an unsustainable number that will have serious reprecussions when it all falls apart which it will. It is inevitable. Another fact is that a lot of these investors come from overseas. Will they maintain properties they own if they live in Dubai or Berlin?

We are already seeing cracks in the wall as housing investments in places like Phoenix have already fallen by over 10% meaning saturation has been achieved. California and Florida are increasing in investors, meaning a scorched earth policy is being used. Once one area dries up, the investors move like locusts to another. The problem with this is that there is only a finite amount of housing and once all the meat has been picked to the bone, housing will crash again. And the banks and government are doing nothing to stop this. Hell, they are encouraging it.

The economy is barely hanging on but at least we are not Europe where the IMF in all the hindsighty goodness, declared that austerity was not working the way they thought it would in Greece. You think? This is the same brain powers that noticed Iceland was doing just fine by doing the exact opposite as the EU, yet still refuses to implement any of what they are doing. That is some world class stupidity and greed.

The EU is in it's longest recession ever, even though a few of those countries like Greece and Spain are in a deep depression, but that word never gets mentioned to hold hope to the insanity they keep trying. Italy has had seven straight quarters of contraction and their manufacturing, also offshored for disastrous results, has dropped for 15 consecutive months. The number of poor there has doubled in the same time. Unemployment is rampant across the EU with places like Greece hitting 62.5% for people under 24 (in Spain it’s 56.4%, Portugal is 42.5%, and then Italy at 40.5%) and the entire zone hitting 12.2% overall. These numbers have all risen as austerity has failed, which is odd because the GOP here is still clamoring for it. The Japanese bond market has collapsed and their markets have dropped 20% these last few weeks. The other Asian market have not fared well either. As we keep pumping money into ours, the effects have been muted.

This is all signs of a massive meltdown coming, a fact that many economists agree with me on. David Stockman, Nouriel Roubini and Paul Krugman have all said that a market crash is likely due to the bubble nature we are seeing in housing, college tuition bills and the stock market. The big difference between this one and the one seen in 2008 is that we will have no way of fixing any of this when it goes belly up this time. Much like 2008, the same people who warned us about that are back and considering they were right then, there is no evidence to support them being wrong this time. We should listen and listen good because if the world economy collapses, we are going to to be in a world of hurt. We could fix everything if we wanted to, but corporations and government would have to give away a lot of power and money to do that so what do you think the chances are of that happening? Between slim and none is the correct answer. Start fighting for your rights, the right to for a safe place to live, a good job and access to decent medical care. We have none of that right now. And until we do have those things, life planetwide is going to to get worse and worse until something explodes and we will all be caught in the crossfire when it does.


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