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Jim Cramer Is Predicting Bank Runs In Spain And Italy And Financial Anarchy Throughout Europe

From The Economic Collapse

During an appearance on Meet The Press on Sunday, Jim Cramer of CNBC boldly predicted that “financial anarchy” is coming to Europe and that there will be “bank runs” in Spain and Italy in the next few weeks.  This is very strong language for the most famous personality on the most watched financial news channel in the United States to be using.  In fact, if Cramer is not careful, people will start accusing him of sounding just like The Economic Collapse Blog.  It may not happen in “the next few weeks”, but the truth is that the European banking system is in a massive amount of trouble and if Greece does leave the euro it is going to cause a tremendous loss of confidence in banks in countries such as Spain, Italy and Portugal.  There are already rumors that the “smart money” is pulling out of Spanish and Italian banks.  So could we see some of these banks collapse?  Would they get bailed out if they do collapse?  It is so hard to predict exactly how “financial anarchy” will play out, but it is becoming increasingly clear that the European financial system is heading for a massive amount of pain.

Posted below is a clip of Jim Cramer making his bold predictions during his appearance on Meet The Press.  He is obviously very, very disturbed about the…

First Time Ever – Majority of Unemployed Have Some College Education; Five Solutions to Education, Student-Loan Crisis

From Mish’s Global Economic Trend Analysis

Those who think the answer to the unemployment problem is more education might be surprised to learn the Majority of Unemployed Attended College.

For the first time in history, the number of jobless workers age 25 and up who have attended some college now exceeds the ranks of those who settled for a high school diploma or less.

Out of 9 million unemployed in April, 4.7 million had gone to college or graduated and 4.3 million had not, seasonally adjusted Labor Department data show.

click on chart for sharper image

In 2011, 57% of those 25 and up had attended some college vs. 43% in 1992. Those without a high school diploma fell from 21% to 12% over that span.

But along with the increasing prevalence of college attendance has come a growing number of dropouts, who have left school burdened by student loan debt but without much to kick-start their careers.

Among everyone up to age 24 who has left college or earned a two-year degree — including those not actively searching — the full-time employment-to-population ratio has plummeted from 69% in 2000 to 62% in 2003 to 54%.

This has occurred even as student lending and enrollment at community colleges has soared, elevating the student loan crisis to the center of political debate and a rallying cry for the Occupy Wall Street movement.

Those who graduated with a four-year degree fared better employment-wise but many of…

The Market Ticker – The Tide Is Turning (Sunday 5/20 Edition)

From The Market Ticker

Well well what do we have here?  (From Chris Whalen and IRA)

To rescue Europe, to reinvigorate the United States, and to set the global economy on a sustainable path toward expansion, the current debate offers a so-called “choice”: either slash government spending or spend your way to growth.

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But framing the discussion between austerity and stimulus is a canard that has enveloped economists, commentators, and policymakers in a collective delusion.

I’d argue it’s an intentional diversion, intentional in both diversion and mathematical bankruptcy, but those are the finer points of intent.  The fact is that there’s no path “forward” that can be found in this movement but you have 30 years of political investment in it, and thus it is difficult to get anyone to talk about the facts of debt-driven economic cycles in honest terms.

This is found in the so-called “Presidential” campaign, where we have three contenders, none of which will take this issue on.  Not even the “Libertarian” Gary Johnson will tackle it.

Some ask why.  It’s not very difficult to figure out, really: All are highly invested in the frauds of the last 30 years, because without them none of their so-called “successes” would have worked.  Obama, ironically, is the least invested in them simply because he has the least in actual “things” he’s accomplished in that his actual tenure of “acts” only encompasses the last three years!

The key question facing the global community is how to manage

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Odds ‘n Sods:

From SurvivalBlog.com

Kevin S. suggested this piece : Be Resilient, Part I: How to Measure Resilience

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Steve H. sent this: New FBI Surveillance Backdoors? Six Key Points

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North Korea ‘executes three people found guilty of cannibalism’. One man… "reportedly resorted to cannibalism after supplies to the city dwindled in the wake of the government’s disastrous efforts to reform the currency triggered rampant inflation and worsened already critical food shortages."

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Ol’ Remus of The Woodpile Report recommended this piece: How Government Wrecked the Gas Can

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Finding a pre-1899 gun among junk

The Facebook IPO: The Last Great Wall Street Party

From The Economic Collapse

The Facebook IPO is kind of like a graduation party – everybody comes together for one huge blowout to celebrate the end of an era before going their separate ways.  Unfortunately, most people on Wall Street do not understand how bittersweet this moment really is.  A tremendous amount of pain is ahead for Wall Street in the next few years, and we will probably never see anything like the Facebook IPO ever again. But the Facebook IPO sure has been fun to watch.  Facebook is one of the largest companies to ever go public in the United States.  According to CNN, 247 million shares of Facebook exchanged hands in the first 45 minutes of trading.  The Facebook IPO was nearly ten times larger than any other Internet IPO in history, and the amount of money being made by some people on this deal is absolutely amazing.  For example, it is being reported that Bono will make more money on the Facebook IPO than he has from being part of the band U2 for the past 30 years.  Sadly, this euphoria is not going to last for long.  The next wave of the global financial collapse is rapidly approaching, and once it strikes there will not be much for anyone on Wall Street to be smiling about at all.

During the IPO process, Facebook sold more…

Real Estate Crash in China Underway: Foreign Funding Down 80%, Land Sales Down 57%, Starts Down 27%; Expect Chinese GDP to Plunge

From Mish’s Global Economic Trend Analysis

Inquiring minds are reading an excellent report China Real Estate Unravels by Patrick Chovanec, a professor at Tsinghua University’s School of Economics and Management in Beijing, China.

The report confirms many of the things I said would happen in regards to the Chinese real estate bubble and GDP.

Here are a few items of note.

Developers, burdened by 70% leverage ratios and loans threatening to come due, rushed to complete projects already in their pipeline, to put those units onto the market and raise cash.

That rush to complete inflated real estate investments, allegedly up 23.5% in the first quarter. Other statistics from the report tell the real story.

• Year-on-year sales in Q1, for all real estate, was down 14.6%.
• Residential property sales were down 17.5%
• Office sales were down -10.2% 
• Sales in January-February were a disaster, falling 20.9% overall,
  compared to the first two months of 2011, -24.7% for residential.
• Total amount of floor space “for sale” was up 35.5%, compared to the
  same date last year
• Floor space of residential units “for
  sale” grew 47.4%.
• At the end of 2011, total floor space “under construction” was roughly 4.6 times the floor space sold
• A year and a half worth of excess inventory is hidden somewhere in the pipeline
• New starts in April fell 14.6% year-on-year and 27.0% month-on-month, for property as a whole
• Housing starts fell -14.4% year-on-year and -23.4%

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Economics and Investing:

From SurvivalBlog.com

JPMorgan’s losses grow

Massive Inflation Coming, Warns Donald Trump. (Thanks to Pierre M. for the link.)

Ned M. suggested this: Geithner Comes Clean: "I Don’t Understand It"

I found a link at The Drudge Report to this: $ 12,984–Increase in Debt Per Household Since First 2011 Bipartisan Spending Deal

Items from The Economatrix:

The $ 1.024 Billion Bank Run

Why A Greek Exit From The Euro Would Mean The End Of The Eurozone

Over 55 and Jobless, Americans Face Tough Hunt

Screeching Halt in China; Weak Trade Data; Imports and Exports Fall Way Short of Expectations; Credit Crunch Underway; Feeble Forecasts From Pimco, Others

From Mish’s Global Economic Trend Analysis

China bulls are in for a multi-year shock because rebalancing from an economy overly dependent on exports is going to be far more painful, and last much longer than most think. Data is coming in much weaker than expected, but I propose this is only the very beginning.

The New York Times reports Data Signal Economic Trouble in China

China announced Thursday that growth in imports had unexpectedly come to a screeching halt in April — rising just 0.3 percent from the same period a year earlier, compared with expectations for an 11 percent increase. Businesses across the country appeared to lose much of their appetite for products as varied as iron ore and computer chips.

Growth in other sectors appears to be slowing, too, particularly in real estate. Soufun Holdings, a Chinese real estate data provider, released figures Monday showing that residential land sales in the country’s 20 largest cities had fallen 92 percent last week from the week before, as declining prices for apartments have left developers short of cash and reluctant to start further projects.

In a series of interviews over the past week, bankers and senior executives from provinces all over China, in a range of light and heavy industries, cited a broad deterioration in business conditions. Two of them said that some tax agencies in smaller cities had been telling companies to inflate their sales and profits to make local economic growth look less

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The Market Ticker – Our Corrupt Banking System

From The Market Ticker

Here it comes again folks….. and it’s our fault for allowing it.

U.S. banks increased sales of protection against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the last quarter of 2011 as the European debt crisis escalated.

Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose 10 percent from the previous quarter to $ 567 billion, according to the most recent data from the Bank for International Settlements. Those guarantees refer to credit-default swaps written on bonds.

That would be ok if it was known that the seller could pay because they had laid actual capital against that position.  That’s “One Dollar of Capital” and while it can lead to a nasty loss it can’t cause systemic risk because you can only bet what you have.  If you want to bet more you have to either sell bonds, sell common stock or retain earnings (first), so your position is always covered.

But that’s not what we allow.  We allow banks to simply claim they can cover it because “someone else” took the other side of the position — who is not required to prove they can clear the trade if it goes the wrong way.

Counterparty failure is another risk for banks selling insurance on the debt of the five counties. When a swap is triggered by default, a bank

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18 Signs That The Banking Crisis In Europe Has Just Gone From Bad To Worse

From The Economic Collapse

With each passing day, the banking crisis in Europe escalates.  European banks are having their credit ratings downgraded in waves, bond yields are soaring and billions of euros are being pulled out of banks all across the eurozone.  The situation in Europe is rapidly going from bad to worse.  It is almost like watching air being let out of a balloon.  The key to any financial system is confidence, and right now confidence in banks in Greece, Italy, Spain and Portugal is declining at an alarming rate.  When things hit the fan in Europe, it is going to be much safer to have your money in Swiss banks or German banks than in Greek banks, Spanish banks or Italian banks.  Millions of people in Europe are starting to realize that a “euro” is not necessarily always going to be a “euro” and they are starting to panic.  The Greek banking system is already on the verge of total collapse, and at this rate it is only a matter of time before we see some major Spanish and Italian banks start to fail.  In fact it has already been announced that the fourth largest bank in Spain, Bankia, will be getting bailed out by the Spanish government.  It is only a matter of time before we hear more announcements like this.  Right now, events are moving so quickly…