The second largest stock market in the entire world is collapsing right in front of our eyes.

Guess What Happened The Last Time The Chinese Stock Market Crashed Like This?

Markets hold breath as China's shadow banking grinds to a halt

Out of the shadows and into...a crash?

A slew of shockingly weak data from China and Japan has led to a sharp sell-off in Asian stock markets and the biggest one-day crash in iron ore prices since the Lehman crisis, calling into question the strength of the global recovery.

READ MORE

Warning: Stocks Will Collapse by 50% in 2014

Money News: It is only a matter of time before the stock market plunges by 50% or more, according to several reputable experts.

It's now legal in the US for any financial institution to steal customer funds...and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution!

RED ALERT: It's Open Season on All Customer Funds

Posted by Ann Barnhardt, - August 10, AD 2012 3:33 PM MST

The NFA is collusion with the Banksters, government and judiciary have achieved their goal. The entire concept of "customer segregated funds" is officially, completely, legally dead.

Guys, it is OVER. I know that many of you are still cowering in normalcy bias, unable to deal with reality, unable to face the world as it is, but you have GOT to snap out of it. The marketplace is DESTROYED. You CANNOT be in these markets. All legal protections are now officially gone.

Do you remember how I told you about the Ponzi scheme that imploded in 2007 called "Sentinel Management Group" that stole over $500 million in customer funds? The NFA was the auditing regulator of Sentinel, and the NFA admitted after the Sentinel Ponzi imploded that they signed off on their audits even though the NFA claimed not fully understanding Sentinel's books or accounting methods. In other words, the NFA didn't really audit Sentinel at all - they just PRETENDED to audit them, drew up some forms, had some robosigners sign off, and then just hoped that when the shit hit the fan, everyone in the industry would be so terrified of the NFA that no one would hold the NFA accountable for their criminal malfeasance - or even talk about it.

Sentinel took customer segregated money and fraudulently used it as the collateral on a loan from Bank of New York Mellon for $312 million to fund their own in-house proprietary trading operations. When the Sentinel Ponzi collapsed, BNYM sued to go to the front of the line of creditors - ahead of the customers of Sentinel whose money was fraudulently used as collateral, which has now been "linguistically sanitized" into the word "hypothecated".

The federal appeals court ruled yesterday that not only does BNYM stay at the front of the line, but that using customer segregated funds as collateral is NOT a crime, and that co-mingling customer segregated funds with proprietary funds is NOT fraud.

Here is the Reuters piece.

Read this quote from the ruling, which is, in essence, the entire financial market paradigm being guillotined:

That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud' its customers.

U.S. Circuit Judge John D. Tinder

What this means is that even if Jon Corzine is somehow dragged into court by private citizens, because you know damn good and well that the Justice Department will never, ever touch him, Corzine now has a legal precedent, likely from a bribed or otherwise coerced Federal Appeals Court, explicitly stating that an FCM can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to their own monies, no matter what the law says, or what legal assurances, claims or guarantees are made to that customer about their funds held with an FCM or any other brokerage or depository institution. The "secured" party at the front of the line will always be the mega-bank who made the fraudulent loan using the stolen customer funds as collateral.

In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.

For the love of God, I don't know what more there could possibly be to say to snap you people out of your normalcy bias trance. You have GOT to get ALL MONIES out of the financial system NOW. This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.

The court has ruled that once your money passes out of your PHYSICAL POSSESSION, and I mean PHYSICAL possession, it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you. Do you comprehend this? The entire system is utterly devoid of any integrity or genuine security and is breaking down catastophically before our very eyes. You HAVE to comprehend that your money sitting in an account is no longer legally yours. You have to force your brain to process and comprehend this, no matter how incomprehensible it may seem. IT IS OVER. This is Marxist hell. We have arrived.

This ruling and precedent will be used by every brokerage, every bank, every insurance company and every pension fund to deny you your money when the financial system finally collapses, be it on Monday, or be it two years from now.

DO YOU UNDERSTAND?

You have GOT to GET OUT.

And all of this goes straight back to the criminal mafia that is the National Futures Association, and the fact that they have not actually been auditing those firms who were in the "cosa nostra", and allowing Ponzi schemes to operate with full bureaucratic protection for decades. Sentinel. PFG Best. The legal precedent enabling this protection racket and blatant fraud and thievery is fully in force, and what Corzine did at MF Global is now legally PROTECTED.

This is ecomonic treason.

Treason is a capital offense, meaning that the death penalty is fully justified, warranted and on the table, should the day ever come when a Second American Republic is established, and with it the re-establishment of the rule of law and justice in this land.

UPDATE: Yes, the South Park "And . . . It's Gone" clip is now 100% factual. Here it is. It is clean. No dirty language, just the cold, hard reality of our dead civilization.

On this day...

American Minute for October 29th:

OCTOBER 29, 1929, the New York Stock Exchange crashed.

Panic ensued as Wall Street sold 16,410,030 shares in a single day.

Billions of dollars were lost and America plunged into the Great Depression.

In a drive to aid private relief agencies, October 18, 1931, President Herbert Hoover stated:

Time and again the American people have demonstrated a spiritual quality of generosity...

This is the occasion when we must arouse that idealism, that spirit, from which there can be no failure in this primary obligation of every man to his neighbor.

Herbert Hoover continued:

Our country and the world are today involved in more than a financial crisis.

We are faced with the primary question of human relations, which reaches to the very depths of organized society and to the very depths of human conscience...

This great complex, which we call American life, is builded and can alone survive upon the translation into individual action of that fundamental philosophy announced by the Savior nineteen centuries ago.

Hoover concluded:

Part of our national suffering today is from failure to observe these primary yet inexorable laws of human relationship...

Modern society can not survive with the defense of Cain, 'Am I my brother's keeper?'

Hoover, Herbert Clark. Oct. 18, 1931, address for national drive to aid private relief agencies during Great Depression. Herbert Hoover, The Memoirs of Herbert Hoover-The Great Depression 1929-1941 (NY: MacMillan, 1952), p. 151.

(Brought to you by AmericanMinute.com)

12 Shocking Quotes From Insiders About The Horrific Economic Crisis That Is Almost Here

The Economic Collapse blog included Ann Barnhardt among the twelve.

#11 Ann Barnhardt, head of Barnhardt Capital Management, Inc.: "It's over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken."

I've reproduced her particlar post below (she was #11 in the story on the Economic Collapse blog) since she does not permalink her posts and they do eventually disappear. Ms. Barnhardt has given permission for anyone to copy and share her posts.

barnhardt.biz

Please watch the video at the end:

There's no way in hell we're making it to Nov 2012
Posted by Ann Barnhardt - September 26, AD 2011 9:09 PM MST

Here is a piece from ZeroHedge.com that hopefully will make you all understand, once and for all, that this ain't the 1930's, and that there is absolutely no way in hell that this Republic is going to make it to November 2012.
HERE IT IS.

Summary: The five largest banks in the U.S. (JP Morgan Chase, Citibank, Bank of America, Goldman Sachs and HSBC) are carrying $238 TRILLION dollars in derivative exposure. JP Morgan alone is carrying $78 TRILLION in derivative exposure BY ITSELF.

Okay, what the hell is derivative exposure? What this is referring to are over-the-counter non-exchange traded forward delivery (or "futures") contracts of various kinds. I am a futures broker, but I only execute futures contracts on the futures exchanges, namely the Chicago Mercantile Exchange and the New York Mercantile Exchange. About ten years ago a new "novelty" emerged in the futures business - the so-called "over-the-counter" contracts. There was a kid in the office I worked in who got wind of this and had all kinds of stars in his eyes about making a killing off of these "OTC" contracts because the brokers' commissions were not a flat fee but a percent of the contract value. Here's the problem with OTC contracts: there is no exchange standing between the buyer and seller as a guarantor.

In my business, when a customer executes a trade on a futures or options contract, it makes no difference who the other guy is on the other side of the trade, be it executed electronically or in the pit. None of us have to worry for a second about the counterparty on our executions because the EXCHANGE ITSELF stands between ALL transactions as the ultimate guarantor. The exchange then enforces the financial requirement rules with the Clearing Houses, the Clearing Houses enforce the financial requirement rules with the brokers, and the brokers enforce the financial requirement rules with the customers. That is the chain of financial responsibility. So, even if a customer bugs out and fails to financially perform on a contract, the contract WILL BE MADE GOOD by extracting the money from the broker, then the Clearing House and finally the Exchange. This massive enforcement buffering is what gives the system integrity.

OTC contracts have no exchange. They are a flipping free-for-all. If someone bugs out on a contract, the poop hits the fan. The counterparty has their pants around their ankles and the broker is caught in the middle. That's why when that kid in my office years ago got all starry-eyed, I thought to myself, "I wouldn't do that OTC crap if you put a gun to my head - no matter what the commissions were. It would be Russian Roulette. Eventually someone would default and it would financially destroy the broker instantly, and perhaps the counterparty as well."

Let's take my business - cattle futures. One contract is 40,000 pounds of live cattle. The spot contract settled at $119.725 per hundred pounds today. So, 40,000 pounds X $1.19725 (shift the decimal) = $47,890 total value of the contract. Since this is an exchange traded instrument, the customer doesn't really don't have to worry about default and can go ahead and book that $47,890 today, and it will be offset at a later time, and the net of the entry and exit will be the P&L. The contract isn't going to default, so the derivative exposure is limited.

Okay. These banks are carrying these OTC futures contracts with NO exchange to guarantee anything. And they are carrying these contracts largely WITH EACH OTHER. So JP Morgan might be the long and Goldman Sachs, or some insolvent bank in Europe is the short on the other side. If these banks default, which is now a mathematical certainty because they are not only insolvent, but insolvent multiple times over and there isn't enough money in the world to bail them out, there is going to be a cascading default on all of these OTC contracts.

Now look at the value and exposure of these OTC derivatives again: the top 5 banks in the US alone have exposure of $238 TRILLION dollars.

The total GDP of the United States is $14.5 Trillion.

The total GDP of China is $6 Trillion.

The total land mass on earth is 36.8 billion acres. If every acre of land on earth was "sold" for $6467 per acre, that would total $238 Trillion.

JP Morgan BY ITSELF has derivative exposure equal to over FIVE TIMES the value of the entire US GDP.

And no, there will not be a 1:1 offsetting in a collapse, because the collapse will be asymmetrical, and the bankrupt party will first pursue FULL payment on its "longs" (think of these as accounts receivables) while its "shorts" (accounts payable) will only pay out 20 cents on the dollar OR LESS. In other words, these entities will tear each other apart in a mad dogfight and this dogfight will take the entire world down with it.

TWO HUNDRED AND THIRTY-EIGHT TRILLION DOLLARS.

AND THAT IS JUST FIVE BANKS.

AND THE MASSIVELY CORRUPT AND INCOMPETENT SECURITIES REGULATORS, BOTH GOVERNMENTAL AND PRIVATE, SAT BY AND WATCHED THIS HAPPEN. That is what happens when you let a group of criminals run a bureaucracy of affirmative action hires to "audit" the financial industry. Scroll down and read my post titled "There Must Be A Reckoning."

It's over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.

Here is an intellectually honest trader who was interviewed this morning by the BBC. As much as you may not want to believe it, what this guy says is correct. This iteration of human civilization is approaching an end.

Lack of confidence in leaders was cited as a reason for the plunging markets

When will Democrats kick this guy out? How much are they going to make us suffer? They who claim to care about the poor are making everyone poorer.

Thanks Barack… Dow Drops 460 Points – Lack of Confidence in Leaders Cited

Rate of Return Nonsense

by Dick McDonald Ownership Society Institute

The most effective argument against the privatization of Social Security and Medicare that Democrats and their propagandists have used to defeat any meaningful discussions is “the stock market is too risky.”

Ignoring the reality that almost all existing government and private retirement and old-age medical plans invest in the stock market (with the exception of Social Security and Medicare which are pay-as-you-go “Ponzi-type” schemes) their “too risky” propaganda doesn’t hold water.

First we have to consider what we are doing in crafting plans to finance Social Security and Medicare costs. Isn’t it true that we are looking to finance costs that won’t arise until after the taxpayer retires from an active working life of 40 to 50 years? Therefore we need to craft a plan that is very long-term in nature not short-term.

This brings us back to the rate of return nonsense that is accepted by so many Americans – “the stock market is too risky.” Well it isn’t risky over the long-term. In fact its average rate of return in 40-year increments ever since the S&P 500 started being tracked in 1871 is almost 10% per year.

In its long march from 1 to today’s 12,000 the DOW industrial average has experienced dramatic “short-term” swings. The DOW fell 60% in the great depression. Generally it falls 40% in recessions. In today’s Great Recession it fell 50%. It tumbled from 12,000 to 6,000. However, we are not in unchartered waters. The market always rebounds and then moves higher. Isn’t it over 12,000 today?

Now let’s add to the anti-privatization rhetoric the common argument that I can only get 1% interest on my savings account. Well bank interest is not worthy of discussion. Let’s take a look at the rate of return stocks have experienced on the rebound as of today February 26, 2011.

1. The DOW is up 85% from its March 9, 2009 low.
2. NASDAQ is up 119% from its March 9, 2009 low.
3. S&P 500 is up 95% from its March 9, 2009 low.

Therefore if you funded your retirement on March 9, 2009 your portfolio has probably doubled in value. Now discard the nonsense about bank interest and embrace stocks – they are our salvation.

The long-term advantages of investing in a fund of stocks that track average rates of return are undeniable. A plan that invests in indexed-type stock funds is the only answer to solving our present entitlement-debt crisis.

By replacing Social Security and Medicare with a reasoned stock-investment plan we not only solve our debt problem but our economic problems as well. By investing our annual payroll taxes of $1 trillion in the stock market will generate trillions in new economic activity and tens of millions of jobs.

We must realize such a plan will make even a janitor a millionaire at retirement. The rich will become richer and the country that promised shining city on the hill. It will deliver the American Dream, not the political one but the one we all day dream of.

Today society is in a budget-cutting frenzy to solve its financial problems. However they are ignoring the revenue factor. New Congressman Colonel Adam West put it bluntly this morning “we don’t have a revenue problem we have a spending problem.” I totally disagree, we have both and the Tea Party is missing the boat by agreeing with West.

Republicans, Tea Partiers, Democrats and the talkers are presently recommending less than 1% solutions to our endemic spending problems and zero on direct revenue raising solutions. The solution in raising revenues is not by raising taxes but increasing tax revenues which only occur in a free society when tax rates are low and the returns on investments high.

Now if you understand the rate of return issue turn your focus on to increasing economic activity by reducing tax rates. The attending increase in economic activity will solve many of our problems by exploding the tax revenues without raising rates.

Those interested in cutting Federal taxes by 40% and reducing the average tax load on Americans by 40%, solving our debt crisis and exploding the economy upwards might consider the plan enumerated here.

The rate of return will take care of itself. Invest in America.

SAVING OUR ECONOMY

LACA (Los Angeles Conservatives Alliance) interviews Richard McDonald

Reseda, CA 1-11-11

Over the next eleven months, LACA will be featuring a series of articles by the Ownership Society Institute. They will outline a plan the Institute calls Rise Up America (RUA). This plan has been designed to change the way the United States government works in a manner that will substantially increase the material wealth of the nation and each individual as well as their social well-being.

LACA: Our series is authored by Dick McDonald (DM). Dick believes conservatives should adopt RUA to solve many of the economic and social problems the country faces. Please tell us something about yourself and your RUA plan.

DM: I am retired now but I spent my working life as a tax man helping rich people avoid taxes. As a young CPA working for an international accounting firm I did the personal and corporate income taxes for very rich clients like Jimmy Stewart and J. Paul Getty. After ten years there I spent the next 30 years designing and operating tax shelters.

For the last six years I have been perfecting the RUA plan that does for the poor and middle class what Ronald Reagan’s so-called “trickle down” economic theory did for the rich. In other words it creates wealth for the little guy. If adopted it would create enormous wealth for the country as well.

LACA: Dick your background sounds impressive but just how does doing tax work for billionaires equate with creating wealth for poor people?

DM: That is simple. It is so simple that it escapes most people’s radar. I use the same tax shelter for the poor and middle-class people as a tax man uses for the ultra rich – the non-taxability of appreciation in the value of stock. Think about it. Bill Gates is worth $54 Billion in the latest Forbes survey. He didn’t pay income taxes to create after-tax wealth of $54 billion. His wealth is in the stock of Microsoft. He didn’t pay tax on the appreciation in that stock.

LACA: I see where you're going – most people don't think of appreciation as a tax shelter. I see how rich people use it but how can your plan generate wealth for the poor. They don't have the money to invest in stock.

DM: You're right – they don't – and that is where my plan begins. Today the country needs a kick in the economic pants. We need jobs and a better growth rate. But no one is hiring and few are investing in new products and services. So my plan calls for an annual investment (from the private sector) of over a trillion dollars in the stock market. In the first year it should create millions of jobs and jump the country's growth rate towards 10%.

LACA: Dick that's a great idea but where are the poor and middle class going to get new investment capital of a trillion dollars each year.

DM: Here again that is relatively simple – we privatize the Social Security, Disability and Medicare programs, place the 15.3% of payroll taxes in each taxpayer's personal investment account and have it immediately invested at their direction and for their sole benefit into secure index funds for their 40-year working life.

LACA: Wow – that brings up so many questions we don't have time to cover all of them today. But let's take some obvious ones. First there is a great fear of investing in the stock market. How do you overcome that fear.

DM: First of all the average American household makes over $50,000 a year and pays slightly over $7,500 in Federal payroll taxes. Over a 40-year working life they would have invested $300,000 with the government. However such taxes invested weekly in the stock market grow into a $4 million nest egg through accumulation and compounding. The rate of return we use is the same 10% average rate of return the S&P 500 has returned in long-term 40-year investments since 1871.

Now when the recent stock market crashed and the $4 million dropped to $2 million, the taxpayer only had invested $300,000. He was still way ahead of the game. As the stock market has gone from 12,000 on the Dow to 6,000 and returned to 11,500 the taxpayer's account has come almost back to $4 million. The citizens understand simple arithmetic – they just have to be informed.

A $4 million stock account should throw off a $33,000 a month Social Security check which will make a mockery of the $1,300 the government presently pays. On top of that the taxpayer is worth $4 million whereas under our present system they get no nest egg.

LACA: I'm sorry we only have space for one more question. Presently the payroll taxes collected by government are used to pay current retirees. By abandoning these entitlements what happens to current retirees and where will the money come from to pay them.

DM: Our plan will immediately reduce the over $100 trillion unfunded entitlement debt to a manageable $6 to $8 trillion as the growth in each account will eventually eliminate the need to fund retirees. In the meantime we can fund the benefits by privatizing unneeded departments of the government, selling and leasing back government properties such as lands, buildings and rights (oil, airtime) and a myriad of cost cutting steps. We also can borrow a little as we have made such a massive dent in the overall debt of the country.

The increase in economic activity will swell to the point that the private sector will open jobs up to absorb the government workers displaced by privatization. It can be done.

LACA: I'm sorry we'll have to continue next month. Where can the readers presently get more information about RUA.

DM: They can go to www.ownershipsocietyinstitute.com. Your readers should be aware that many benefits emanate from such a plan including cutting the size of the government by 40%.

Now THIS is Armageddon

RedState: What the Democrats are hiding and why they are really scared...

10 ways to make real money

From CNN Money: These hidden values offer the chance for returns that shine -- as long as you've got an appetite for some risk...

Take some profits before The Tax Man Cometh

Excerpt from Larry Kudlow at CNBC:

...the Tax Man is coming to town on January 1, 2011. Taxes are going up across-the-board. So investors should seriously consider selling into any stock market strength ahead of the tax deadline. Doing this will enable investors to lock in a lower capital-gains tax this year and beat next year’s higher rates.

It’s a lesson investors literally cannot afford to forget: If after-tax investment returns decline, because the key capital-gains tax rate and other investment taxes go up, the future value of stocks is damaged.

In other worrisome news, despite some improvement in consumer sentiment, U.S retail sales fell on Friday for the first time in eight months. That was something of a shocker...

Read the whole thing

SEC is commencing 'cease-and-desist' proceedings against the rating agency Moody's Investors Service (MIS)

What did Warren Buffett know and when did he know it???

Jim Cramer on Obamacare: "It is the single biggest impediment to the stock market going higher."

VIDEO:

First, it is the single biggest impediment to the stock market going higher,” Cramer said. “And a lot of this has to do with what's not being talked about enough with how it's going to be paid and also about what it will do to small business formation. This bill is a disaster for both.

Will Obama-Care Topple the Market?

There's a big difference between entrepreneurs who make a fortune in the market, and those who do so by gaming the government...

Bring Back The Robber Barons

Obama's "Agenda to Nowhere"

Gary Starr for American First Principles: Obama Declares War on Banks & Profit -- Stock Market Tanks...Again

GIGANTIC STOCK MARKET RALLY PREDICTED...

...IF Scott Brown wins in this Tuesdays Massachusetts senatorial election!

(Per CNBC's Jim Cramer of MAD MONEY!)

The Dreadful Record of Barack Obama

President Obama keeps racking up a dreadful record:

• The stock market had its worst January in 113 years
• The stock market had its worst February since 1933
• The Dow has dropped faster under Obama than any other new president in 90 years
• In March the dollar saw its worst drop in value in 25 years
• And, today we found out that the stock market had its the worst first quarter since 1939.

Under Obama Stock Market Sees Worst First Quarter Since 1939

Worse than the Great Depression

Over the last couple years I loved to ridicule all the scaremongers who always said this, that or the other thing is “the worst since the Great Depression.” I stand by my ridicule, for the most part -- those prophets of doom were mostly broken clocks who look right now just by sheer luck. But there's no question now that things have gotten quite bad in the economy and the markets.

So let me do the preachers of Armageddon one better. Today's stock market isn't just the “worst since the Great Depression,” like they're so fond of saying. No, it's even worse than the Great Depression.

Read the whole thing charts and all

‘Obama Bear Market’ Punishes Investors as Dow Slumps (Update2)

March 6 (Bloomberg) -- President Barack Obama now has the distinction of presiding over his own bear market.

The Dow Jones Industrial Average has fallen 20 percent since Inauguration Day, the fastest drop under a newly elected president in at least 90 years, according to data compiled by Bloomberg. The gauge has lost 53 percent from its October 2007 record of 14,164.53, slipping 4.1 percent to 6,594.44 yesterday.

More than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The president is in danger of breaking a pattern in which the Dow rallied 9.8 percent on average in the 12 months after a Democrat captured the White House, according to data compiled by Bloomberg.

“People thought there would be a brief Obama rally, and that hasn’t happened,” said Uri Landesman, who oversees about $2.5 billion at ING Groep NV’s asset management unit in New York. “It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”

A bear market is defined as a decline of 20 percent or more.

IMPORTANT: READ THE WHOLE THING!