CRASH2: Forget the technicals….2 out of 3 psycholgical levels have now been breached

AND OIL’S DEAD-CAT BOUNCE IS OVER

levelsFTSESSE

I have explained before my belief in the three key-market psychological levels that could easily trigger a panic: 16,000 on the Dow, 6,000 on the FTSE, and 3,000 on the Shanghai. Two of them are now below those levels, and the Dow futures for its session later today do not look good…..all three monitors are down 1.7 to 2%.

You should now regard this as officially the second global correction following the first one last September. Whether this is The Big One remains to be seen: but either way, there are clear differences in sentiment on the news media between then and today:

  • Mainstream talking heads are starting to nail QE as a busted flush….and as the deliniator between this crisis and all previous ones.
  • Establishment figures and analysis firms are being more blunt – using phrases like “sell everything” and “we are about to pay for a decade of denialism”.
  • Big hedge funds are being extremely bearish and even pulling out of the markets
  • The commodities ‘narrative’ is desisting from ‘supply’ bollocks and started to show some sense at last about the dramatic demand-slump.

Having become good boys this week, Iran is adding to the oversupply situation: but that doesn’t explain a sudden 4.2% plunge to 12-year lows today so far. We are heading for $25 oil, and that is going to bring some horrific consequences along for the trip.

Russia,  Saudi Arabia, Nigeria and Venezuela will quickly move from the bumpy seats over the tail to the baskets in the hold. All of these – but especially the first two – mean some potentially dramatic changes in geopolitics, notably in the face of Arab nationalism and fundamentalism. (At a lower international but equally disastrous domestic level, Canada too is looking at the most serious crisis it’s faced in recent years).

The case for fracking is now dead and buried under several very heavy boulders, and the industry in the US has dried up almost completely. Whatever risible case there was for it in the UK is now neither ecologically or economically sound. (And by the way, way isn’t Osborne buying every litre of oil he can lay his hands on at these prices?)

Thanks to US-driven obduracy on the subject of developing beyond oil, global dependence on its energy and enormous by-product industries means that the effects will be both numerous, and – in a collective sense – impossible to predict. Whether commodities trading firm collapses set some banks a-wobbling or the Putin régime gets into trouble in ways that go way beyond economics, the spectrum is one that goes beyond dominoes.

Very few globalists are Buddhists. That’s why – although they know everything is connected – Buddhists would never be dumb enough to create an economic system where every virus was connected to every person in the world with no resistance to it….at the press of a pc button.

Nuts, crazy, insane, deranged etc etc etc.

 

 

15 thoughts on “CRASH2: Forget the technicals….2 out of 3 psycholgical levels have now been breached

  1. The risible case for fracking in the UK and everywhere else was understandable IMO.
    How else are you to give birth to imaginary dollar bytes, rotate them as fast as Satan permits, turn them into paper currency, make profits and pay crazy bonuses?
    They got in there at $100/barrel with QE pumping at full chat. QE(D).

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  2. This is way bibles,qorans etc where written all the books describe the bedlam madness of humanity before them & how defending these books from allowing it ever to happen again might involve some nasty work! that’s a thought!

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  3. Okay John I think that we are headed for deep doodoo. My wife keeps telling me that Bavarian houses and land will always climb for ever. But I know better from the 1993 UK recession. How do I convince her?

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  4. …and if we are headed for a global ctrl-alt-del what do we do? The US answer is always “buy ammo” which is somewhat daft and teenage when you are going to need your neighbours in a crash. My thinking is to buy land and once you have enough buy physical precious metals.. was reading a fascinating interview with a gold smelter somewhere on Tweb today and he said that the gold price no way reflects reality. So that leaves silver. in a Reset that currency will buy stuff.

    I have been making sure our firewood supplies are high but I wish not to panic anyone yet. I think heating and lighting will become important.

    If the dollar goes under how will this affect the Euro if the Euro is partially gold-backed? Or is there enough gold in the German bank to keep us afloat? I think actually not. I think the shadow gold sector is huge.

    I share this from the Argentina crisis:

    http://www.rapidtrends.com/surving-argentinas-economic-collapse-part-1-3/

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  5. I suspect the oil price game plan was to destroy the Russian economy and thereby render Putin impotent and to hell with the collateral damage. Also a wonky Saudi is yet another planned domino to fall. The new masters of the universe are taking economic colonialism to new heights-long live the military industrial complex.

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  6. As to UK “fracking” the important caveat in the Infrastructure Act is the wording that the recovery of UK Petroleum is ECONOMIC ~It doesn’t particularly say the Act doesn’t apply if it’s not but that ought to be the way it reads

    On another front the value to watch is the “Spot Market” TEU container rate from Asia to Northern Europe. Even after several GRI’s before Christmas it seems to have dropped again recently and that of course is just ahead on the Chinese New Year

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  7. after all the QE printing (which they are finally admitting doesn’t work) we are now drowning in dead cats that will not bounce.

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  8. “I suspect the oil price game plan was to destroy the Russian economy and thereby render Putin impotent and to hell with the collateral damage. Also a wonky Saudi is yet another planned domino to fall. ”

    All the latest panic about 47 chopped heads. It has been known for decades since “Death of a Princess” that they chop heads so the MSM hypocrisy is blatant. If you have put petrol in your car you have funded jihad and built madrassas for decades.

    I think they are waiting to reveal the “28 pages” to the world then the domino will go. When it comes out how dirty the BAe/Bandar thing was then we all start learning Persian.

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  9. @kfc1404.
    The deposit insurance savings at the private banking is backed by Govt. This surely is an anomaly.
    What other industry can secure Govt backing for failure. Not our steel industry,shipbuilding, ,manufacturing ,mining agriculture etc.
    In effect the private citizen is on the hook for bank failures by way of his taxes being used to prop up the banks.
    If the banks need insurance surely they should take it out privately as with all other industries.

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  10. Do you mind if I quickly return to the notion of doublespeak that has been so interesting. It appears that the british government has not officially declared the Paris attacks a few weeks ago as terrorism so that it doesn’t have to pay out compensation – article here:

    https://tompride.wordpress.com/

    it can nevertheless send war planes to bomb Syria although goodness knows what for now????

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  11. Russia backs out of oil market to make room for Iran.
    Win-win situation.
    Think, Syrian “biological/chemical” weapons scenario.
    Someone will be unhappy.

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  12. @Salford Lad: That was how the German Sparkassen and Volksbanken (Credit Unions) worked. They “clubbed” together in the case of one of them going bankrupt, so that no losses to customers were incurred. Last year’s EU “Einlagesicherung” law (setting depositer, sorry, creditor, “insurance” to €100K) was fiercely fought by the Credit Unions – as it effectively means a reduction in service – but they lost.

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