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Banks prepare to crash economy - CAUTION

Started by David Icke Bot, Nov 26, 2018, 06:22:26 AM

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David Icke Bot

Supersized mortgages are back: Desperate homebuyers are being offered 'irresponsible' deals worth SIX times their salaries as borrowing soars to record levels

'First-time buyers are saddling themselves with record levels of debt as banks launch super-sized mortgages for up to six times people's salaries.

Britons buying their first home now borrow an average of 3.68 times their annual income – the highest since records began in the 1970s.

In the summer of 2007, the lead-up to the financial crisis, people typically borrowed 3.39 times their salary.

A quarter of mortgages are now for 4.5 times someone's salary or higher, compared to a fifth just three years ago, according to Bank of England data.

Some banks are lending as much as six times borrowers' salaries – rates branded 'irresponsible' and 'alarming' before the housing crash a decade ago.
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Families are already a record £25billion in the red – equivalent to more than<div class="" style="width: auto; display: block; margin: 0 auto;">

a fifth of the annual NHS budget.

With house prices soaring by a third in just five years, to an average of £233,000, mortgages are helping to push up debts to levels never seen before.

This week, Darlington Building Society launched a mortgage offering professionals up to six times their salary. It last offered loans for up to six times' income in 2007, just before the housing crash.

Barclays and Santander are also offering loans of up to 5.5 times income to high earners, while Clydesdale Bank offers the same rate for some newly-qualified professionals.'

Read more: Supersized mortgages are back: Desperate homebuyers are being offered 'irresponsible' deals worth SIX times their salaries as borrowing soars to record levels


Last Edit by Humphrey


Household debt hit a record high of $13.5 trillion last quarter


The total debt shouldered by Americans has hit another record high, rising to $13.5 trillion in the last quarter, while an unusual jump in student-loan delinquencies could provide another signal that the nation's economic expansion is growing old.

QuoteTotal household debt, driven by a $9.1 trillion in mortgages, is now $837 billion higher than its previous peak in 2008, just as the last recession took hold. Such debt has risen steadily for more than four years and sits more than 21 percent above a trough in 2013.

Last Edit by Humphrey


* cat  sigh

Got to love how every time they push the blame onto the paupers borrowing money - never, ever, blame The Banks.

Last Edit by Humphrey

David Icke Bot

The Independent

GM slashes 14,700 jobs with multiple factories facing closure in the US

'General Motors (GM) will fire 14,700 workers in North America and put five plants up for possible closure as it restructures to cut costs.

GM has said it will cut car production and stop building a number of slow-selling models. The company plans to halt production next year at three assembly plants - Lordstown, Ohio, Hamtramck, Michigan, and Oshawa, Ontario.

The news comes amid repeated claims from President Donald Trump that car and manufacturing jobs are returning to the US under his presidency.

GM also plans to stop building several models now assembled at those three plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse. Spam_A Spam_B Also affected are transmission factories in Warren, Michigan, as well as Baltimore. GM will also close two factories outside North America, but did not identify those plants.

The United Auto Workers Union (UAW) has vowed to "confront this decision by GM through every legal, contractual and collective bargaining avenue open to our membership."

"General Motors decision today to stop production at the Lordstown, Ohio, and Hamtramck, Michigan, assembly plants will idle thousands of workers, and will not go unchallenged by the UAW," Terry Dittes, UAW Vice President in charge of negotiations with GM, said.'

Read More : GM slashes 14,700 jobs with multiple factories facing closure in the US


Last Edit by Humphrey

David Icke Bot


Three Things That Happened Just Before The Crisis Of 2008 That Are Happening Again Right Now

'Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy. It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don't want to admit the reality of what we are facing. Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement. And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is "very happy" with how the U.S. economy is performing, but he shouldn't be so thrilled. Signs of trouble are everywhere, and we just got several more pieces of troubling news. Spam_A Spam_B Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent. Just like in 2008, that is killing the housing market and it has us on the precipice of another real estate meltdown.

And some of the markets that were once the hottest in the entire country are leading the way down. For example, just check out what is happening in Manhattan...

QuoteIn the third quarter, the median price for a one-bedroom Manhattan home was $815,000, down 4% from the same period in 2017. The volume of sales fell 12.7%.

Of course things are even worse at the high end of the market. Some Manhattan townhouses are selling for millions of dollars less than what they were originally listed for.

Sadly, Manhattan is far from alone. Pending home sales are down all over the nation. In October, U.S. pending home sales were down 4.6 percent on a year over year basis, and that was the tenth month in a row that we have seen a decline...'

Read More : Three Things That Happened Just Before The Crisis Of 2008 That Are Happening Again Right Now


Last Edit by Humphrey

David Icke Bot


This Is How The 'Everything Bubble' Will End

'I think there's a very high chance of a stock market crash of historic proportions before the end of Trump's first term.

That's because the Federal Reserve's current rate-hiking cycle, which started in 2015, is set to pop "the everything bubble."

I'll explain how this could all play out in a moment. But first, you need to know how the Fed creates the boom-bust cycle...

To start, the Fed encourages malinvestment by suppressing interest rates lower than their natural levels. This leads companies to invest in plants, equipment, and other capital assets that only appear profitable because borrowing money is cheap. Spam_A Spam_B This, in turn, leads to misallocated capital – and eventually, economic loss when interest rates rise, making previously economic investments uneconomic.

Think of this dynamic like a variable rate mortgage. Artificially low interest rates encourage individual home buyers to take out mortgages. If interest rates stay low, they can make the payments and maintain the illusion of solvency.

But once interest rates rise, the mortgage interest payments adjust higher, making them less and less affordable until, eventually, the borrower defaults.

In short, bubbles are inflated when easy money from low interest rates floods into a certain asset.

Rate hikes do the opposite. They suck money out of the economy and pop the bubbles created from low rates.'

Read More : This Is How The 'Everything Bubble' Will End


Last Edit by Gladstone

David Icke Bot

RT - Russia Today

US protectionism leading global trade into 'deep crisis' – EU

'The EU ambassador to the World Trade Organization (WTO) has lambasted Washington's tariffs and protectionist trade policy. He called the US the "epicenter" of the crisis in the multilateral trading system.

"The multilateral trading system is in a deep crisis and the United States is at its epicenter," EU ambassador Marс Vanheukelen said on Monday as he was addressing the World Trade Organization (WTO) meeting to review US trade policies. The envoy also decried limitations on the US procurement market, in particular through "Buy American" legislation. Spam_A Spam_B The US has been at the forefront of blaming the WTO for mishaps, saying it treats America unfairly in global trade and even threatening to pull out of the organization. In apparent response to US president Donald Trump's calls to reform the WTO, Vanheukelen urged Washington to engage in talks on concrete proposals.

While several cases against US protectionism have already piled up in the WTO, the organization itself is believed to face an institutional crisis, as agreed by G20 leaders. During the summit in Argentina, the world powers agreed that the organization definitely needs changes and improvement to continue playing a role in the global trade system.

The EU representative was not alone in his criticism of Washington's polices during the meeting, as Japan and Switzerland also blasted the US for justifying its steel and aluminum tariffs using the national security exemption. The Trump administration slapped the European Union with 25 percent tariffs on steel and 10 percent on aluminum exports in June, prompting the EU to hit back with retaliatory measures and impose 25 percent import tariffs on a range of American products. The bloc also opened legal proceedings against the US in the WTO.'

Read More : US protectionism leading global trade into 'deep crisis' – EU


Last Edit by Gladstone

David Icke Bot

Longest Ever (Liquidity Fed) Bull Market Over?

Hindsight will best explain what only guesswork can do now. US equity market action in December has been uncharacteristically ugly for this time of year - the worst performance since December 1931 during the Great Depression.

Santa failed to arrive pre-Christmas like most often this time of year. Christmas eve market action was unprecedented - the worst ever for the Dow.

The day after the Wall Street Journal headlined "The Dow's Worst Christmas Eve." Bloomberg News was just as glum, headlining "US Stocks Endure Worst Pre-Christmas Day on Record."

The Nasdaq was practically in bear market territory before Wall Street trading began yesterday. The S&P 500 approaches it, reaching a 20-month low.

The Dow is 18.77% off its October 3 high, the S&P 500 19.77% below its September 20 peak, and the Nasdaq is off 22% from its August high following Wednesday trading.

The global stock market and New York Stock Exchange composite indexes peaked in January. The Dow, S&P 500, and Nasdaq hung on, failing to roll over until late summer/early fall, high-fliers hammered most.

Noted investor Jeffrey Grundlach said bear market conditions arrived, believing we're in one, saying:

"(W)e've had the first leg down, and the second leg down is usually more painful than the first leg down if this is indeed a bear market."

He believes what's going on isn't short-term, things unlikely to be followed by resumption of the longest US bull market on record in the coming days or weeks.

Lots of factors contribute to bear markets. Economist Hyman Minsky warned about times like now. He constructed a "financial instability hypothesis," building on the work of John Maynard Keynes.

It showed how speculative bubbles grow out of outsized greed, asset values collapsing in the end-game part of a seven-stage up-then-reverse journey downward.

It's a "Minsky Moment," what he called "revulsion" when euphoria turns to panic. Large investors bail out, followed by market meltdown. Whether it's happening now will best be known in the weeks and months ahead.

According to Minsky, over a prolonged period of prosperity, investors pile into risk assets until lending exceeds what borrowers can pay off from incoming revenues.

When over-indebted investors sell to cover loan obligations, rising markets spiral lower. The final stage of bubble deflation happens when cheap credit ends. Downward momentum is much greater and faster than when markets are rising.

It's going on now, the Fed raising interest rates and unwinding $50 billion in proceeds from its $4.5 trillion+ balance sheet monthly, reinvesting the rest - a reverse quantitative easing (QE).

The Fed's balance sheet was around $800 billion at the start of the 2008-09 financial crisis. The longest-ever US bull market began in March 2009 - fueled by trillions of dollars of Fed created liquidity along with near-zero interest rates, not market fundamentals.

What stimulated years of speculative excess ended, the main factor driving markets lower.

Wall Street got an added boost by the great GOP tax cut heist last December, solely benefitting corporate America and high-net worth individuals, using their windfall to create greater wealth than already, including by stock market speculation - unrelated to stimulating economic growth and jobs creation.

In November, David Stockman warned of a steep market selloff, believing signs have been signaling it, saying:

"No one has outlawed recessions. We're within a year or two of one. Fair value of the S&P going into the next recession is well below 2000, 1500 — way below where we are today."

"If you're a rational investor, you need only two words in your vocabulary: Trump and sell. He's playing with fire at the very top of an aging expansion."

"He's attacking the Fed for going too quick when it's been dithering for eight years." After nine hikes, the Fed's benchmark short rate is historically low at from 2.25 - 2.50%.

Trump's trade war with China risks exacerbating a market selloff if it persists or worsens in the new year.

When sentiment turns negative, buyers hesitate stepping in (a so-called "buyers' strike"). Things up or down have a way of taking on a life of their own.

Since October, negative sentiment outweighed positives. Treasury Secretary Mnuchin heightened market jitters by holding an emergency meeting of major Wall Street banks by phone - JP Morgan Chase, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, and Morgan Stanley.

They comprise the president's Working Group on Financial Markets, the so-called "Plunge Protection Team," created in the aftermath of the October 1987 market crash.

One analyst called convening them to discuss market turmoil the "financial equivalent of yelling fire in a crowed theater."

Others fear the most dismal December in memory so far may signal the bull market's end, perhaps a significant selloff ahead in the new year.

Will 2019 bring greater market fire and fury? Only Cassandra was good at predicting future events.

I'll stick to what's ongoing domestically and geopolitically with a final comment.

Trump's tenure so far has been hostile to peace, equity and justice for everyone at home and abroad.

It's hard being optimistic for what lies ahead, things more likely to worsen, not improve - aside from what happens on Wall Street and world markets.

VISIT MY NEW WEB SITE: stephenlendman.org (Home - Stephen Lendman). Contact at lendmanstephen@sbcglobal.net.

My newest book as editor and contributor is titled "Flashpoint in Ukraine: How the US Drive for Hegemony Risks WW III."



Last Edit by Gladstone