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EXOGEN:  WE ARE IN THE MIDDLE OF THE GLOBAL RESET!!!!!!!!
EXOGEN:  Global Stocks Enter Bear Market: One-Fifth Of All Worldwide Stock Market Wealth Is Already Gone
By Editor on January 21, 2016 0 Comments
By Michael Snyder

It’s official – global stocks have entered a bear market.  On Wednesday, we learned that the MSCI All-Country World Index has fallen a total of more than 20 percent from the peak of the market.
So that means that roughly one-fifth of all the stock market wealth in the entire world has already been wiped out.  How much more is it going to take before everyone will finally admit that we have a major financial crisis on our hands?  30 percent?  40 percent?
This new round of chaos began last night in Asia.  Japanese stocks were down more than 600 points and Hong Kong was down more than 700 points.  The nightmare continued to roll on when Europe opened, and European stocks ended up down about 3.2 percent when the markets over there finally closed.  In the U.S., it looked like it was going to be a truly historic day for a while there.
At one point the Dow had fallen 566 points, but a curious rebound resulted in a loss of only 249 points for the day.
As bad as things are in the U.S. right now, the truth is that we still have a long way to go to catch up with the rest of the planet.  Around the world, many major stock indexes are already down more than 30 or 40 percent.  Overall, the MSCI All-Country World Index is now down 20 percent, which officially puts us in bear market territory…
The MSCI All-Country World Index, which measures major developed and emerging markets, fell into a bear market Wednesday, with its decline from early last year now totaling more than 20 percent.
A plunge in U.S. stocks, which caused the Dow Jones industrial average to decline by more than 400 points at one point, pushed the global index into bear territory at midmorning during New York trading.
Japan fell into a bear market as well as the Nikkei 225 index dropped 3.7 percent Wednesday, bringing its total pullback to 22 percent from its high in June.
Much of this chaos is being driven by the price of oil.  On Wednesday the price of U.S. oil dropped below 28 dollars a barrel for a while, and as I write this article Brent crude is still below 28 dollars a barrel.
As energy prices continue to plummet, this is putting a tremendous amount of pressure on junk bonds.  On Wednesday JNK actually dipped beneath 32.00 for a time before rebounding at the end of the day.  I expect to see junk bonds continue to crash during the days ahead as investors feverishly race for the exits.
And of course global economic fundamentals continue to deteriorate as well.  Global trade is absolutely imploding and shipping rates have fallen to unprecedented levels.  If you can believe it, Bloomberg is reporting that it is now actually cheaper to rent a 1,100 foot merchant vessel than it is to rent a Ferrari…
Rates for Capesize-class ships plummeted 92 percent since August to $1,563 a day amid slowing growth in China. That’s less than a third of the daily rate of 3,950 pounds ($5,597) to rent a Ferrari F40, the price of which has also fallen slightly in the past few years, according to Nick Hardwick, founder of supercarexperiences.com. The Baltic Exchange’s rates reflect the cost of hiring the vessel but not fuel costs. Ships burn about 35 metric tons a day, implying a cost of about $4,000 at present prices, data compiled by Bloomberg show.
I could hardly believe that when I first read it.
But this is the kind of thing that we would expect to see happen when the greatest financial bubble in world history bursts.
The 200 trillion dollar global debt pyramid is now collapsing all around us, and the former chief economist of the Bank for International Settlements is warning that we could soon be facing “an avalanche of bankruptcies”…
The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.
“The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up,” said William White, the Swiss-based chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements (BIS).
Of course it is a little late in the game to be warning us about this now.
At this point there is very little that can be done to stop the collapse that is already happening.
White went on to tell the Telegraph that things are going to become “uncomfortable for a lot of people who think they own assets that are worth something”…
“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something,” he told The Telegraph on the eve of the World Economic Forum in Davos.
For years, I have been warning that the global financial system is an incredibly shaky house of cards, and now we have finally reached the endgame.
But the mainstream media in the United States is telling everyone not to panic.  Instead of a time to sell, the mainstream media is urging people to jump in and take advantage of all of the “great deals” in the stock market right now.  I really like what Mike Adams of Natural News had to say about what we are seeing…
The pathetically stupid and dishonest financial media is desperately running stories right now to maintain false faith in the markets, even while their own people are behind the scenes selling like mad. As long as they can keep the public believing in the “faith” of never-ending cheap money, they can bail out their own positions to suckers and fools who think a tiny dip in a massively overvalued, fraudulent market is a “buying opportunity.”
Watch for desperate headlines from propaganda financial outlets (such as MarketWatch.com) like, “10 reasons you shouldn’t sell” or “The upside potential of the market is HUGE!” These are psychological operations to try to persuade people that the collapse they’re seeing in global markets isn’t actually happening.
The financial chaos that has erupted in recent weeks has really caught a lot of people by surprise, but my readers knew that it was coming well in advance.
For months, I have been warning about this exact kind of scenario.
The deflationary financial meltdown that started during the last six months of 2015 is now making headlines all over the planet, and what we have experienced so far is just the tip of the iceberg.
The bears have gotten out of their cages, and global investors are running for cover.  Nobody is exactly sure what is going to happen tomorrow, but without a doubt the entire world will be watching.
Source: Economic Collapse   http://theeconomiccollapseblog.com/archives/global-stocks-enter-bear-market-one-fifth-of-all-worldwide-stock-market-wealth-is-already-gone
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EXOGEN:  Run on Italy’s Third Largest Bank? Capital Controls or Bail-Ins Next?…

Italian Bank Customers Pull Deposits
The CEO of Monte dei Paschi, Italy’s third largest bank, and the oldest surviving bank in the world, admits Customers Pulling Deposits as share prices sink.
Some Monte dei Paschi customers have been pulling savings out of the Italian bank, its chief executive said on Wednesday, as it faces a crisis over a mountain of bad loans that has wiped nearly 60 percent off its market value this year.
CEO Fabrizio Viola did not say how much money savers had withdrawn, or when the outflow began, though he said the fall in deposits was “limited” and that the bank could cope with it as he sought to reassure customers and investors.
Italian bank shares have lost 24 percent since the beginning of 2016 as investors, already rattled about global economic growth, have sold out of a sector with low profitability and about 200 billion euros ($218 billion) of loans that are unlikely to be repaid.
Monte Paschi – Italy’s third-biggest bank – has lost the most ground as it is perceived to be the most vulnerable; it has the highest level of bad loans as a proportion of assets and was the worst performer in a 2014 health check of euro zone lenders.
“Of course clients turning to our local branches are worried about what they read,” Viola said in a statement.
“At present the size of the funding lost due to clients who decided to move part of their savings elsewhere is limited and anyway below levels seen during the previous crisis the bank faced in February 2013 which was overcome brilliantly.”
Believability Standards
The problem with statements like “fall in deposits is limited” is that no one can possibly know if they are true. We can’t expect Viola to admit the problem is serious.
European Commission President Jean-Claude Juncker set the believability standard in 2011.
Juncker admitted “When it becomes serious, you have to lie”. At the time, he was Luxembourg prime minister.
It’s Serious! Share prices of Monte dei Paschi are down over 50%, the worst of any major Italian bank. Deposits are leaving, and the only statement we have is that withdrawals are “limited”.
Bail-ins have already hit other Italian banks.
In December, bail-ins at smaller Italian banks wiped out subordinate bondholders.
Sergio Picinotti, a 63-year-old unemployed man, lost his entire €40,000 nest egg in Banca Etruria. A friend at the bank said “Trust me, it will take the third world war to shut down Banca Etuuria,” said Picinotti.
Did a third world war just start?
Bad Bank Plan Stalls
On January 20, Bloomberg reported Italy’s Lending Recovery at Risk as Renzi Bad Bank Plan Stalls
With non-performing loans touching a record high of 201 billion euros ($219 billion) in November and delays in creating a bad bank even as the European Central Bank ups its scrutiny, lenders may be reluctant to make new loans.
So far, the ECB’s bond purchase program, known as quantitative easing, has shielded government bonds from the country’s banking woes, with the yield on 10-year debt stable at 1.56 percent compared with a euro-era high of 7.5 percent in November 2011. Italy pays just 101 basis points more than German bunds to borrow for a decade.
Italian bank stocks and bonds, however, have not been spared.
To further grease the wheels of the economy by speeding up disposals of non-performing loans and free up more resources for credit to companies and households, Italian Prime Minister Matteo Renzi’s government has been trying to win approval at the European level for the creation of a bad bank.
The plan has been delayed several times and investors fear recent quarrels between European Commission President Jean-Claude Juncker and Renzi over an alleged lack of budget flexibility won’t make things easier.
“If there is a bail-in event this year, Italy is one of the countries where that is most likely to happen,” said Alberto Gallo, head of macro-credit research at Royal Bank of Scotland Group Plc.
“Many banks, deprived of a cheap source of funding such as subordinated bonds and having to repay the loans they got from ECB, may find themselves with a reduced liquidity at disposal to boost lending,” Gianluca Ziglio, executive director of fixed-income research at Sunrise Brokers LLP in London, said by phone.
“Gone are the days when concerns about NPLs [Non-Performing Loans]could be simply swept under the carpet,” said Wolfango Piccoli, managing director of Teneo Intelligence in London.
Europe Fears Bail-Ins
On January 11, I commented Europe Fears Bail-Ins: Capital Flight Intensifies in Italy, France,…
Here’s a table from that post, with Target2 Balances in billions of euros.
Country  Symbol  Target2 Balance  Comment
Spain  ES  -241.8  Worst Negative Since 2012
Italy  IT  -229.6  Worst Negative Ever
Greece  GR  -97.3  Least Negative Since 2015 Q1
ECB  ECB  -73.8  Worst Negative Ever
France  FR  -73.5  Worst Negative Since 2011
Germany  DE  592.5  Highest Since 2012
Luxembourg  LU  140.4  Highest Ever
Netherlands  NL  49.4  Highest Since September 2015
Finland  FI  31.8  Highest Since August 2015
Cyprus  CY  2.4  Second Highest Ever
Lack of Trust
Target2 is a measure of capital flight between eurozone countries. For example: A depositor in a Greek, Spanish, or Italian bank does not trust their bank so the depositor opens up a new account and transfers the balance to a bank in Germany, the Netherlands, or Luxembourg instead.
The recipient banks then park the money at the ECB at negative interest rates instead of  buying Greek, Spanish, or Italian bonds.
Money parked at the ECB at a negative rate of 0.3% hit a new high at the beginning of 2016.
image: http://4.bp.blogspot.com/-W-rS3v44a4w/VpMGp8fRn6I/AAAAAAAAg8Q/jpJ_g…
Brilliant Comeback Details
Viola claims there was a crisis in February of 2013 that was “overcome brilliantly”.
How many times does one want to bet on that roll of the dice?
Let’s explore Viola’s brilliant comeback idea from the perspective of Target2 balances for Italy (in billions of euros).
Date  Italy Target2 Imbalance
2008  22.9
2009  54.8
2010  3.4
2011  -191.4
2012  -255.1
2013  -229.1
2014 Q2  -149.4
2014 Q3  -197.4
2014 Q4  -208.9
2015 Q1  -191.5
2015 June  -188.6
2015 July  -195.2
2015 Aug  -214.6
2015 Sep  -235.7
2015 Oct  -223.9
2015 Nov  -229.6
2015 Dec  ?
Between 2008 and 2010, Italian banks had capital inflows.
Things went to hell in a hurry starting 2011. By the end of 2012, target2 liabilities of Italian banks hit €255.1 billion. By second quarter of 2014, those imbalances shrank to €149.4 billion.
“Brilliance” Explained
Did Viola do something to spur confidence in Italian banks?
Nope.
What caused the improvement?
On July 26, 2012, ECB president Mario Draghi made this Famous Statement: “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”
On February 14, 2014, Renzi Grabs Power in Italy Without Election.
The ECB and the financial markets liked that power grab by Matteo Renzi who then became Italy’s prime minister.
Money that had fled Italian banks, poured back in, for a while. That honeymoon is clearly over. Care to bet on another “brilliant” comeback?
Not a single fundamental problem with Italy, the ECB, the euro, or Europe in general has been fixed.
Capital Controls or Bail-Ins Next?
In December, only bondholders were at risk. Starting 2016, depositors are at risk, but allegedly only on amounts that exceed €100,000.
Don’t kid yourself into believing smaller deposits are safe. There are other problems, like capital controls. Greece and Cyprus both have them.
Capital Controls in Greece
In 2015, the ECB imposed Capital Controls on Ba…
In 2015, the ECB imposed Capital Controls on Bank Accounts limiting withdrawals to €1,800 a month.
On October 19, 2015, Bloomberg proclaimed A Quick End to Greek Capital Controls? Economists Don’t Think So.
Even if your money is not stolen, you may not have access to it for quite some time.
Why Take Chances?
Viola said the fall in deposits was “limited”.
I ask “Why Take Chances?”
Renzi wants to create a “bad bank”. Under new rules, effective 2016, bondholders and depositors are liable for any losses transferred to the “bad bank”.
Why is the ECB reluctant to approve a bad bank for Italy? Could it be the losses will be massive?
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Capital Controls or Bail-Ins Next?
In December, only bondholders were at risk. Starting 2016, depositors are at risk, but allegedly only on amounts that exceed €100,000.
Don’t kid yourself into believing smaller deposits are safe. There are other problems, like capital controls. Greece and Cyprus both have them.
Capital Controls in Greece
In 2015, the ECB imposed Capital Controls on Ba…
In 2015, the ECB imposed Capital Controls on Bank Accounts limiting withdrawals to €1,800 a month.
On October 19, 2015, Bloomberg proclaimed A Quick End to Greek Capital Controls? Economists Don’t Think So.
Even if your money is not stolen, you may not have access to it for quite some time.
Why Take Chances?
Viola said the fall in deposits was “limited”.
I ask “Why Take Chances?”
Renzi wants to create a “bad bank”. Under new rules, effective 2016, bondholders and depositors are liable for any losses transferred to the “bad bank”.
Why is the ECB reluctant to approve a bad bank for Italy? Could it be the losses will be massive?
Get Out Now!
Don’t be seen Standing in Line hoping for your money when withdrawals are ‘limited’ via capital controls or outright confiscated by bail-ins.
Avoid the rush. Get out now.
Where? Think carefully.
For further discussion, please see Europe Fears Bail-Ins: Capital Flight Intensifies in Italy, France,…
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com/2016/01/run-on-italys-third-largest-bank.html#StyELoewFxLCmxOi.99