18 Signs That Global Financial Markets Are
Entering A Horrifying Death Spiral
August 20, 2013
You can see it coming, can’t you?
The yield on 10 year U.S. Treasuries
is skyrocketing, the S&P 500 has
been down for 9 of the last 11
trading days and troubling economic
news is pouring in from all over the
The much anticipated “financial
correction” is rapidly approaching, and
investors are starting to race for the
exits. We have not seen so many
financial trouble signs all come
together at one time like this since just
prior to the last major financial crisis.
It is almost as if a “perfect storm” is
brewing, and a lot of the “smart
money” has already gotten out of
stocks and bonds. Could it be possible
that we are heading toward another nightmarish financial crisis? Could we see a repeat of 2008 or
potentially even something worse? Of course a lot of people believe that we will never see another
major financial crisis like we experienced in 2008 ever again. A lot of people think that this type of
“doom and gloom” talk is foolish. It is those kinds of people that did not see the last financial crash
coming and that are choosing not to prepare for the next one even though the warning signs are
exceedingly clear. Let us hope for the best, but let us also prepare for the worst, and right now things
do not look good at all. The following are 18 signs that global financial markets are entering a
horrifying death spiral…
#1 The yield on 10 year U.S. Treasuries has risen for 5 of the past 6 days, and it briefly touched the
2.90% level on Monday.
#2 Rapidly rising interest rates are spooking investors and causing them to pull money out of bonds at a
very rapid pace…
Investors have yanked nearly $20 billion from bond mutual funds and exchange traded
funds so far in August. That’s the fourth highest pullback ever, according to TrimTabs data.
In June, investors took out $69.1 billion — the highest on record.
#3 The sell-off of U.S. Treasuries is being led by foreigners. In particular, China and Japan have been
particularly aggressive in selling off bonds…
China and Japan led an exodus from U.S. Treasuries in June after the first signals the U.S.
central bank was preparing to wind back its stimulus, with data showing they accounted for
almost all of a record $40.8 billion of net foreign selling of Treasuries.
The sales were part of $66.9 billion of net sales by foreigners of long-term U.S. securities
in June, a fifth straight month of outflows and the largest since August 2007, U.S. Treasury
Department data showed on Thursday.
China, the largest foreign creditor, reduced its Treasury holdings to $1.2758 trillion, and
Japan trimmed its holdings for a third straight month to $1.0834 trillion. Combined, they
accounted for about $40 billion in net Treasury outflows.
#4 Thanks to rapidly rising bond yields, some of the largest exchange-traded bond funds are getting
absolutely hammered right now…
• The $18 billion iShares iBoxx $
Investment Grade Corporate Bond
fund (ticker: LQD) has fallen
7.94% since May 2, according to
S&P Capital IQ. That’s including
reinvested interest from the fund’s
• The 3.7 billion iShares Barclays
20+ Year Treasury Bond (TLT) has
plunged 15.9% the same period.
Longer-term bonds typically get hit
harder when rates rise than shorter-
term bonds. For example, the
iShares Barclays 3-7 Year Treasury Bond fund (IEI) has fallen 3.2% since May 2.
• PowerShares Emerging Markets Sovereign Debt (PCY), which invests in government
bonds issued in developing countries, has fallen 12.7%. The fund has $1.8 billion in assets.
#5 In recent weeks we have witnessed the largest cluster of Hindenburg Omens that we have seen since
prior to the last financial crisis.
#6 George Soros has bet a tremendous amount of money that the S&P 500 is going to be heading down.
#7 At this point, the S&P 500 has fallen for 9 out of the last 11 trading days.
#8 Margin debt has spiked to extremely dangerous levels. This is a pattern that we also saw just before
the last financial crash and just before the dotcom bubble burst…
The exuberant mood comes as margin debt on Wall Street hovers near $377bn, just below
its all-time high and well above peaks before the dotcom crash and the Lehman crisis.
“Investors have rarely been more levered than today,” said Deutsche Bank, warning that the
spike in margin debt is a “red flag” and should be watched closely.
#9 The growth rate of new commercial bank loans and leases is now the slowest that it has been since
the end of the last financial crisis.
#10 According to a shocking new report, Fannie Mae and Freddie Mac are masking “billions of
dollars” in losses. Will they need to be bailed out again just like they were during the last financial
#11 Wal-Mart reported very disappointing sales numbers for the second quarter. Sales at stores open at
least a year were down 0.3%. This is a continuation of a trend that has been building for years.
#12 U.S. consumer bankruptcies just experienced their largest quarterly increase in three years.
#13 The velocity of money in the United States has hit another stunning new low.
#14 The massive civil unrest in Egypt threatens to disrupt the steady flow of oil out of the Middle
After last week’s bloody crackdown by the Egyptian army, fears of a disruption of oil
supplies to the West have boosted the oil price. Brent crude prices were propelled to a four-
month high of $111.23 on Thursday. If the turmoil gets worse – or unrest spreads to other
countries – the risk premium currently factored into the price of crude is likely to increase
#15 European stocks just experienced their biggest decline in six weeks.
#16 The Japanese national debt recently crossed the quadrillion yen mark, and many are expecting the
Japanese financial system to start melting down at any time.
#17 In Indonesia, the stock market is “cratering“.
#18 In India, the yield on their 10 year government bonds has skyrocketed from 7.1 percent in May to
9.25 percent now.
As the coming months unfold, keep a close eye on the “too big to fail” banks both in Europe and in the
United States. When the next great financial crisis strikes, they will play a starring role once again.
They have been incredibly reckless, and as James Rickards told Greg Hunter during an interview the
other day, we are in much worse shape to deal with a major banking crisis than we were back in
What’s going to cause the next crisis? Rickards says,“The problem in 2008 was too-big-
to-fail banks. Well, those banks are now bigger. Their derivative books are bigger. In
other words, everything that was wrong in 2008 is worse today.” Rickards goes on to
warn, “The last time, in 2008 when the crisis started, the Fed’s balance sheet was $800
billion. Today, the Fed’s balance sheet is $3.3 trillion and increasing at $1 trillion a
year.” Rickards contends, “You’re going to have a banking crisis worse than the last
one because the banking system is bigger without the resources because the Fed is
tapped out.” As far as the Fed ending the money printing, Rickards predicts, “My view is
they won’t. The economy is fundamentally weak. We have 50 million on food stamps,
24 million unemployed and 11 million on disability, and all these numbers are going
We never even came close to recovering from the last financial crisis and the last recession.
Now the next major wave of the economic collapse is coming up quickly.
I hope that you are taking this time to prepare for the approaching storm, because it is going to be very
Bill Clinton foundation has spent more than
$50M on travel expenses
By GEOFF EARLE
August 20, 2013
Bill Clinton’s foundation has spent more than $50
million on travel expenses since 2003, an analysis of
the non-profit’s tax forms reveal.
The web of foundations run by the former president
spent an eye-opening $12.1 million on travel in 2011
alone, according to an internal audit conducted by
foundation accountants. That’s enough to by 12,000
air tickets costing $1,000 each, or 33 air tickets each
day of the year.
That overall figure includes travel costs for the
William J. Clinton Foundation (to which Hillary and
Chelsea are now attached) of $4.2 million on travel in
2011, the most recent year where figures are
The Clinton Global Health Initiative spent another
$730,000 on travel, while the Clinton Health Action
Initiative (CHAI) spent $7.2 million on travel.
CHAI also spent $2.9 million on meetings and training, according to the report, conducted by the Little
Rock, Ark. Accounting firm BDK CPA’s and Advisors. All three entities have global reach, while CHAI
has the most staff.
It’s impossible to discern from tax filings how the total travel costs were reached, although the former
president is known to rack up his personal miles on private jets.
Wealthy businessman John Catsimatitis has lent aircraft to Clinton and to the foundation multiple times
for travel, including Clinton’s recent trip to Africa along with daughter, Chelsea.
Clinton sometimes uses Catsimatitis’ Boeing 727, opting on other flights to use a smaller Gulfstream
“I don’t think it’s necessarily their go-to plane, because the 727 is a pretty big plane. It all depends
where they’re going and what they’re doing,” said a Catsimatitis spokesman.
Sometimes Clinton uses the plane at a discount rate for the foundation, and sometimes Catsimatitis
donates the flight time to the charitable foundation, which has a variety of programs to improve global
health and improve conditions in Haiti and other far-flung locales.
According to previously undisclosed data provided by the Clinton Foundation, presidential trips
accounted for 13 percent of the 2010 travel budget and 10 percent of the 2011 travel budget.
That puts Bill Clinton’s single-year travel tab for 2011 at more than $1 million. A foundation official
wouldn’t say how many presidential trips occurred in that time frame. The remaining travel paid for an
array of foundation travel, with nearly 60 percent soaked up by the health access initiative, and about 5
percent going to the Clinton global health initiative, including flying students to attend Clinton Global
A Climate Change Initiative took up 12 percent of travel in 2010 and 11 percent in 2011, although the
program accounts for a much smaller fraction of foundation revenues. A foundation official said that’s
because the program employs many overseas staff and domestic staff doing transcontinental travel.
Clinton made reference to foundation overhead in an “open letter” posted on his foundation’s web site
– mentioning an outside review that called for “stronger management staff” and blaming his own
efforts to keep costs down.
“The review told us that my passion to keep overhead costs down – at about a low
8 percent for most of the last decade, rising only to above 11 percent in 2012 as we invested to support
our growth – had gone on too long and that the Foundation needed better coordination without
dampening the entrepreneurial spirit that infuses all our initiatives,” he wrote.
The sky-high travel costs come after a report revealed some of the foundation’s high-flying ways,
including letting actress Natalie Portman fly first class with her pooch to a foundation event.
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