As we enter
the second half of 2015,
financial panic has gripped most of the globe. Stock prices are
crashing in China, in Europe and in the United States. Greece is on the
verge
of a historic default,
and now
Puerto Rico and Ukraine are both threatening to default on
their debts if they do not receive concessions from their creditors.
Not since the financial crisis of 2008 has so much financial chaos been
unleashed all at once. Could it be possible that the great financial
crisis of 2015 has begun? The following are 16 facts about the
tremendous financial devastation that is happening all over the world
right now…
1. On Monday, the Dow fell by
350 points. That was the
biggest one day decline that we have seen
in two years.
2. In Europe, stocks got absolutely smashed.
Germany’s DAX index dropped
3.6 percent, and France’s CAC 40 was down
3.7 percent.
3. After Greece,
Italy is considered to be the most
financially troubled nation in the eurozone, and on Monday Italian
stocks were down
more than 5 percent.
4. Greek
stocks were down an astounding
18 percent on Monday.
5. As the week began, we witnessed the largest one day increase in European bond spreads that we have seen
in seven years.
6. Chinese stocks have already met the official definition of being in a
“bear market” – the Shanghai Composite is already down
more than 20 percent from the high earlier this year.
7. Overall, this
Chinese stock market crash is the worst that we have witnessed
in 19 years.
8. On Monday, Standard & Poor’s slashed Greece’s
credit rating once again and publicly stated that it believes that
Greece now has a
50 percent chance of leaving the euro.
9. On Tuesday, Greece is scheduled to make a
1.6 billion euro loan repayment. One Greek official
has already stated that this is
not going to happen.
10. Greek banks
have been totally shut down, and a daily cash withdrawal limit of
60 euros has been established.
Nobody knows when this limit will be lifted.
11. Yields on
10 year Greek government bonds have shot past
15 percent.
12. U.S. investors are far more exposed to Greece than most people realize.
The New York Times explains…
But
the question of what happens when the markets do open is particularly
acute for the hedge fund investors — including luminaries like David
Einhorn and
John Paulson
— who have collectively poured more than 10 billion euros, or $11
billion, into Greek government bonds, bank stocks and a slew of other
investments.
Through
the weekend, Nicholas L. Papapolitis, a corporate lawyer here, was
working round the clock comforting and cajoling his frantic hedge fund
clients.
“People
are freaking out,” said Mr. Papapolitis, 32, his eyes red and his voice
hoarse. “They have made some really big bets on Greece.”
13. The
Governor of Puerto Rico has announced that the debts that the small island has accumulated are “
not payable“.
14. Overall, the government of Puerto Rico owes approximately
72 billion dollars to the rest of the world. Without debt restructuring, it is inevitable that Puerto Rico will default. In fact,
CNN says that it could happen by the end of this summer.
15. Ukraine has just announced that it may “
suspend debt payments” if their
creditors do not agree to take a 40 percent “haircut”.
16. This week the Bank for International Settlements(BIS)
has just come out with a
new report that says that central banks around
the world are “defenseless” to stop the next major global financial crisis. Without a doubt, we are overdue for another major financial crisis. All over the planet, stocks are
massively overvalued,
and financial markets have become completely disconnected from economic
reality. And when the next crash happens, m
any believe that it will be
even worse than what we experienced back in 2008. For example, just
consider the words of
Jim Rogers…
