Bankers Are Telling Us What Will Happen Next

Are we on the verge of a major worldwide economic downturn? Well, if recent warnings from prominent bankers all over the world are to be believed, that may be precisely what we are facing in the months ahead. As you will read about below, the big banks are warning that the price of oil could soon drop as low as 20 dollars a barrel, that a Greek exit from the eurozone could push the EUR/USD down to 0.90, and that the global economy could shrink by more than 2 trillion dollars in 2015. Most of the time, very few people ever actually read the things that the big banks write for their clients. But in recent months, a lot of these bankers are issuing such ominous warnings that you would think that they have started to write for The Economic Collapse Blog. Of course we have seen this happen before. Just before the financial crisis of 2008, a lot of people at the big banks started to get spooked, and now we are beginning to see an atmosphere of fear spread on Wall Street once again. Nobody is quite sure what is going to happen next, but an increasing number of experts are starting to agree that it won’t be good.

Let’s start with oil. Over the past couple of weeks, we have seen a nice rally for the price of oil. It has bounced back into the low 50s, which is still a catastrophically low level, but it has many hoping for a rebound to a range that will be healthy for the global economy.

Unfortunately, many of the experts at the big banks are now anticipating that the exact opposite will happen instead. For example, Citibank says that we could see the price of oil go as low as 20 dollars this year…

The recent rally in crude prices looks more like a head-fake than a sustainable turning point — The drop in US rig count, continuing cuts in upstream capex, the reading of technical charts, and investor short position-covering sustained the end-January 8.1% jump in Brent and 5.8% jump in WTI into the first week of February.

Short-term market factors are more bearish, pointing to more price pressure for the next couple of months and beyond — Not only is the market oversupplied, but the consequent inventory build looks likely to continue toward storage tank tops. As on-land storage fills and covers the carry of the monthly spreads at ~$0.75/bbl, the forward curve has to steepen to accommodate a monthly carry closer to $1.20, putting downward pressure on prompt prices. As floating storage reaches its limits, there should be downward price pressure to shut in production.

The oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range — after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws. It’s impossible to call a bottom point, which could, as a result of oversupply and the economics of storage, fall well below $40 a barrel for WTI, perhaps as low as the $20 range for a while.

Even though rigs are shutting down at a pace that we have not seen since the last recession, overall global supply still significantly exceeds overall global demand. Barclays analyst Michael Cohen recently told CNBC that at this point the total amount of excess supply is still in the neighborhood of a million barrels per day…

“What we saw in the last couple weeks is rig count falling pretty precipitously by about 80 or 90 rigs per week, but we think there are more important things to be focused on and that rig count doesn’t tell the whole story.”

He expects to see some weakness going into….

In the end, a lot of these energy companies are going to go belly up if the price of oil does not rise significantly this year. And any financial institutions that are exposed to the debt of these companies or to energy derivatives will likely be in a great deal of distress as well.

Meanwhile, the overall global economy continues to slow down.

On Monday, we learned that the Baltic Dry Index has dropped to the lowest level ever. Not even during the darkest depths of the last recession did it drop this low.

And there are some at the big banks that are warning that this might just be the beginning. For instance, David Kostin of Goldman Sachs is projecting that sales growth for S&P 500 companies will be zero percent for all of 2015…

“Consensus now forecasts 0% S&P 500 sales growth in 2015 following a 5% cut in revenue forecasts since October. Low oil prices along with FX headwinds and pension charges have weighed on 4Q EPS results and expectations for 2015.”

Others are even more pessimistic than that. According to Bank of America, the global economy will actually shrink by 2.3 trillion dollars in 2015.

One thing that could greatly accelerate our economic problems is the crisis in Greece. If there is no compromise and a new Greek debt deal is not reached, there is a very real possibility that Greece could leave the eurozone.

If Greece does leave the eurozone, the continued existence of the monetary union will be thrown into doubt and the euro will utterly collapse.

Of course I am not the only one saying these things. Analysts at Morgan Stanley….

By Michael Snyder – The Economic Collapse –

Non-Muslim African Troops Kill 250 Boko Haram Terrorists

Soldiers from Cameron and Chad have killed 250 Muslim Terrorists, and killed all of the mass murdering Islamic Muslim terrorists they were sent to hunt out

As the report on Christianity Daily tells us: Cameroonian and Chadian forces say they have killed over 250 Boko Haram militants.

On Wednesday, forces from Cameroon said they killed about 50 militants in a battle at a border town between Cameroon and Nigeria. Boko Haram has been attacking northern Nigeria and had started to affect towns in Cameroon. Wednesday, Boko Haram militants fought with Cameroonian troops in the town of Fotokol. Cameroonian officials say that at least 50 militants and six soldiers were killed in the fight.

Armed forces in Chad reported to have killed at least 200 Boko Haram militants on Tuesday. State media as well as military officials confirmed the numbers. Chad’s forces attacked the Boko Haram bases of Ngara and Gambaru in northern Nigeria. They lost nine soldiers to the militants during the attack.

The regional forces of Niger, Nigeria, Chad, and Cameroon have contributed thousands of troops in order to combat the growing threat of Boko Haram. Chad is considered one of the strongest militaries in the region and has been conducting air strikes on Boko Haram territories for the past few days. Though Nigeria is no longer alone in the battle against the militant group, the country makes it clear that it will remain completely autonomous and not be influenced by the governments of its neighboring countries.

Nigeria is currently the biggest nation in Africa in both economy and population. Many of its resources come from its oil fields. Further, presidential elections will take place on February 14, and many believe that the current president….

Judge overturns Mora County’s anti-fracking ordinance

A federal judge has overturned a New Mexico county’s ban on oil and natural gas drilling that was the first of its kind when it was enacted nearly two years ago.

In a sprawling, nearly 200-page decision that touched on several constitutional elements, U.S. District Judge James O. Browning ruled that the ordinance clashes with federal law.

“Historically, a county cannot enact or supersede federal law,” Browning wrote. “The ordinance thus goes beyond Mora County’s historical lawmaking just to deprive a corporation of their rights.”

The ordinance, enacted in April 2013, cited environmental concerns and put the county’s decision-making rights ahead of business interests, and federal and state permits. It was believed at the time to have been the first time a county had banned hydraulic fracturing amid debates over the practice nationwide in communities that have experienced oil and gas booms.

….Mora County is far from the energy hotspots in southeastern and northwestern New Mexico, and there are no active oil or gas wells within the county. But county officials took the step out of fear that their scarce water supply could become further threatened by pollution from hydraulic fracturing, which extracts oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel, and chemicals.

By Associated Press – Albuquerque Journal –

What’s really behind the steep drop in oil prices?

Gas prices have fallen far, and quickly. But don’t celebrate yet. It’s a manipulated price and behind the manipulation are some horrific trends.

Saudi Arabia’s producers can break even selling oil at $20 per barrel. Most others, like those in the USA, cannot. It is a price war closing wells.

By David Knight – Infowars.com –

Oil prices sink further, dollar hit by wage data

Oil prices tumbled again Monday, while most Asian stock markets also retreated after a sell-off in New York at the end of last week in response to data showing weak US wage growth.

The news on wages, which overshadowed another forecast-beating rise in job creation, pushed the dollar down against the euro because it complicates the Federal Reserve’s plans to raise interest rates.

Sydney fell 0.78 percent, or 42.9 points, to close at 5,422.7 and Seoul closed 0.19 percent lower, or 3.75 points, at 1,920.95.

Shanghai — which has surged more than 50 percent over the past year — slipped 1.71 percent, or 56.09 points, to 3,229.32….

Crude prices have lost more than half their value since the middle of last year, with weakness in key markets China and the eurozone adding to the supply and demand crisis.

Wall Street provided a negative lead for stock markets after figures showed US wages grew 1.7 percent year-on-year in December, barely keeping up with inflation and indicating consumer spending power remained low….

Traders latched on to the data, ignoring the fact that unemployment fell to 5.6 percent, the lowest level in six and a half years, while 252,000 new posts were created in December to cap the best year for job creation since 1999.

“Despite the robust US jobs data, markets chose to focus on the weak wages growth and the likelihood that it will keep the Fed Reserve ‘patient’ about any rate hike,” United Overseas Bank said.

Economists took the report as allowing the Fed to delay raising interest rates. This dented speculation of an increase in April and made the dollar less attractive to investors.

“This tug of war between deflation and expectations of the first rate hike in many years by the US Fed is likely to result in intense volatility,” Nader Naeimi at AMP Capital Investors in Sydney, told Bloomberg TV….

From Yahoo News –

Bank of North Dakota Outperforms Wall Street

While 49 state treasuries were submerged in red ink after the 2008 financial crash, one state’s bank outperformed all others and actually launched an economy-shifting new industry. So reports the Wall Street Journal this week, discussing the Bank of North Dakota (BND) and its striking success in the midst of a national financial collapse led by the major banks. Chester Dawson begins his November 16th article:

It is more profitable than Goldman Sachs Group Inc., has a better credit rating than J.P. Morgan Chase& Co. and hasn’t seen profit growth drop since 2003. Meet Bank of North Dakota, the U.S.’s lone state-owned bank, which has one branch, no automated teller machines and not a single investment banker.

He backs this up with comparative data on the BND’s performance:

[I]ts total assets have more than doubled, to $6.9 billion last year from $2.8 billion in 2007. By contrast, assets of the much bigger Bank of America Corp. have grown much more slowly, to $2.1 trillion from $1.7 trillion in that period.

. . . Return on equity, a measure of profitability, is 18.56%, about 70% higher than those at Goldman Sachs and J.P. Morgan. . . .

Standard & Poor’s Ratings Services last month reaffirmed its double-A-minus rating of the bank, whose deposits are guaranteed by the state of North Dakota. That is above the rating for both Goldman Sachs and J.P. Morgan and among U.S. financial institutions, second only to the Federal Home Loan Banks, rated double-A-plus.

Dawson goes on, however, to credit the BND’s remarkable performance to the Bakken oil boom. Giving his article the controversial title, “Shale Boom Helps North Dakota Bank Earn Returns Goldman Would Envy: U.S.’s Lone State-Owned Bank Is Beneficiary of Fracking,” he contends:

The reason for its success? As the sole repository of the state of North Dakota’s revenue, the bank has been one of the biggest beneficiaries of the boom in Bakken shale-oil production from hydraulic fracturing, or fracking. In fact, the bank played a crucial part in kick-starting the oil frenzy in the state in 2008 amid the financial crisis.

That is how the Wall Street-owned media routinely write off the exceptional record of this lone publicly-owned bank, crediting it to the success of the private oil industry. But the boom did not make the fortunes of the bank. It would be more accurate to say that the bank made the boom.

Excess Deposits Do Not Explain the BND’s Record Profits

Dawson confirms that the BND played a crucial role in kick-starting the boom and the economy, at a time when other states were languishing in recession. It did this by lending for critical infrastructure (roads, housing, hospitals, hotels) when other states’ banks were curtailing local lending.

But while the state itself may have reaped increased taxes and fees from the oil boom, the BND got no more out of the deal than an increase in deposits, as Dawson also confirms. The BND is the sole repository of state revenues by law….

By Ellen Brown – OpEdNews.com –

Watching Russian News & Reading Pravda : What I Learned

I grew up hating America. I lived in the Soviet Union and was a child of the Cold War. That hate went away in 1989, though, when the Berlin Wall fell and the Cold War ended. By the time I left Russia in 1991, the year the Soviet Union collapsed, America was a country that Russians looked up to and wanted to emulate….

I was perplexed by how the Russian people could possibly support and not be outraged by Russia’s invasion of Ukraine. But I live in Denver, and I read mostly US and European newspapers. I wanted to see what was going on in Russia and Ukraine from the Russian perspective, so I went on a seven-day news diet: I watched only Russian TV — Channel One Russia, the state-owned broadcaster, which I hadn’t seen in more than 20 years — and read Pravda, the Russian newspaper whose name means “Truth.” Here is what I learned….

Russia’s propaganda works by forcing your right brain (the emotional one) to overpower your left brain (the logical one), while clogging all your logical filters. Here is an example: Russian TV shows footage of schools in eastern Ukraine bombed by the Ukrainian army. Anyone’s heart would bleed, seeing these gruesome images. It is impossible not to feel hatred toward people who would perpetrate such an atrocity on their own population. It was explained to viewers that the Ukrainian army continued its offensive despite a cease-fire agreement.

Of course if you watched Ukrainian TV, you would have seen similar images of death and despair on the other side. In fact, if you read Ukrainian newspapers, you will learn that the Ukrainian army is fighting a well-armed army, not rebels with Molotovs and handguns, but an organized force fully armed by the Russian army….

Comparing Putin to Hitler, as one of my Russian friends put it, is “absolutely abominable” because it diminishes Hitler’s atrocities and overstates by a mile what Putin has accomplished to date. Yet it feels as if we are at a Putin-of-1936 moment. Will he turn into a Putin of 1939 and invade other countries? I don’t know. But the events of the past nine months have shown Putin’s willingness to defy international law and seize the advantage on the ground, betting — correctly so far — that the West won’t call his bluff.

As Garry Kasparov put it, while the West is playing chess, responding tactically to each turn of events, Putin is playing high-stakes poker. We ignore Putin at our own peril.

By Vitaliy Katsenelson – InstitutionalInvestor.com –

Truth in Media: Feds Say Cannabis Is Not Medicine While Holding The Patent on Cannabis as Medicine

By Ben Swann – Truth In Media –

In marijuana there are multiple cannabinoids including THC, CBD, CBN, CBA, THCA, THCB and over 160 other compounds in the plant including terpenes from the plant that create the most effective medicine.

What you need to know, is where the U.S. government actually stands on this issue. Cannabis, marijuana, is today still a Schedule 1 Drug. That means, according to our government it has no medicinal use and has a high potential for abuse. Does our government really believe that? No. In 1999, the U.S. Department of Health and Human Services filed for a patent for the use of cannabinoids for medicinal purposes.

Also in 1999, HHS filed for a second patent, specifically for cannabis oil for the treatment of disease. That’s right, our government through the taxpayer funded Department of Health and Human Services holds two patents on cannabinoids and cannabis oil to treat certain diseases like alzheimer’s and auto-immune diseases like crohn’s.

Meanwhile, our government through taxpayer funded agencies like the Department of Justice pursue, arrest and in prison Americans who would attempt to access or use cannabis oil to heal their own bodies. Because in public they claim cannabis oil is not medicine and in private they seek to own the rights to that medicine.

 
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Scottish Independence: What Would Braveheart Do?

By Patrick J. Buchanan – VDare.com –

No matter how the vote turns out on Thursday in Scotland, either for independence or continued union with Britain, the disintegration of the Old Continent appears almost inevitable.

Already the British government has conceded that, even if the Scots vote for union, Edinburgh will receive greater powers to rule itself.

Cheering for the breakup of the U.K. are Catalans and Basques, Bretons and Corsicans, Tyroleans, Venetians, Flemish, all dreaming of nations of their own carved out of Spain, France, Italy and Belgium.

Europe’s secessionists have waxed ever stronger since the last decade of the 20th century when the Soviet Union and Yugoslavia splintered into 22 nations and Czechoslovakia broke in two.

 
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