Prelude to Economic Disaster: Billionaire Liquidates All Real Estate Ahead of Crash

economy-rip

If you were to contact a real estate agent in any major market today they’d likely advise you the market is so “hot” that if you intend on purchasing property you’d better be prepared to act fast. They’ll adamantly point out, contrary to reality, that the housing market has recovered, available inventory is dropping, prices are rising, and they can only go higher from here.

But if you’re paying attention to what’s happening around us, and not just with our own economy here in the United States, then you’d likely have noticed that while many Americans are flying high on hopes of change and recovery, there is an economic disaster of unprecedented scale in the making.

First, we know that the third largest economy in the world, China, is going through a massive credit crunch as bad loans there have soared to near all time highs, meaning that loans are quickly becoming non-existent and credit markets are now frozen. This means that no one is going to be building ghost cities and empty malls in the Peoples’ Republic again any time soon. Moreover, it means no more easy cash. We know what happened in the United States and the rest of the world when the last credit crunch hit.

Second, as Sovereign Man points out, the richest man in Asia Li Ka-Shing (their version of Warren Buffet or Bill Gates with a reported net worth of $ 30 billion) has rapidly liquidated his real estate holdings and is existing the market as quickly as possible.

Here’s a guy you want to bet on– Li Ka-Shing.

Li is reportedly the richest person in Asia with a net worth well in excess of $ 30 billion, much of which he made being a shrewd property investor.

Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.

Since August of last year, he’s dumped billions of dollars worth of his Chinese holdings. The latest is the $ 928 million sale of the Pacific Place shopping center in Beijing– this deal was inked just days ago.

Once the deal concludes, Li will no longer have any major property investments in mainland China.

This isn’t a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?

Simple. China’s credit crunch.

But Li Ka-Shing isn’t the only one bailing. Luxury real estate investors are unloading their real estate assets as well in an effort to raise cash and not be the last one holding a dead asset. For all intents and purposes, the music in China has stopped:

Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.

On the domestic front we’ve seen stock markets drop a fairly significant level in recent weeks. So much so that company’s hoping to launch new IPO initiatives have chosen to just sit this one out as they are worried that investors are running out of money to help fund their operations.

You wouldn’t know that, of course, because mainstream media pundits like Dennis Kneale continue to sell Americans on the notion that we’re in a robust recovery:

Yet the economy, both locally and globally, is in vastly better shape than it was when we took that terrible tumble, down to Dow 6,800 in March 2009.

Americans have cut back on debt, and so have companies.

Karl Denninger of the Market Ticker calls this one what it is – a complete lie – and points out that we are nowhere near cutting back on our debt.

I Despise Liars

US debt to present

“Cut back”?  Really?  Worse, ex mortgages this is not true at any level; there is $ 3,733.5 billion in non-mortgage consumer debt outstanding.  That is an all-time high; in Q4/2006 (just before the crash, remember?) that stood at $ 3,047.2 billion or nearly $ 700 billion less.

An awful lot of that increase since 2007, incidentally, is student loans — exactly where it cannot be for sustainable economic progress since the younger generation has to eventually take the reins from us older folks.  This is nothing more than an economic Ponzi scheme with its cheering section led by people like Dennis who refuse to look at and argue from facts.

As for corporate debt it never decreased at all.

Something is amiss, and the fact that no one in the mainstream, which is where tens of millions of Americans get their “facts,” is really talking about it should be a blaring alarm.

There are, however, some Americans paying attention. As in China, it’s the billionaires and elite who have direct access to the puppeteers pulling the strings, and like Li Ka-shing, they have been quietly and rapidly dumping millions of shares of stock:

Despite the 6.5% stock market rally over the last three months, a handful ofbillionaires are quietly dumping their American stocks . . . and fast.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.

Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.

The big money, often referred to as the smart money, is getting out of the game and they are dumping these assets on unsuspecting investors.

They know, for example, that earnings growth has now plunged to its lowest levels since 2012.

As these in-the-know elites unload their positions, average investors depending on their financial advisers to tell them the truth are slamming money into these stocks and paying, in some cases, 500 times earnings. Real estate investors are, likewise, overpaying for homes based on the idea that markets are “hotter” than they’ve been in years.

It’s a recipe for disaster and it won’t end well – at least for 99% of people who blindly believe the opinions of their favorite “experts.”

economy-rip---tumb


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

Wall Street Journal: “Scary 1929 market chart gains traction. If market follows the same script, trouble lies directly ahead.”

stockmarket-chart(Washington, D.C.) — I hope there is nothing to this. But I thought I ought to share it with you anyway.

“There are eerie parallels between the stock market’s recent behavior and how it behaved right before the 1929 crash,” says a columnist writing for the Wall Street Journal’s Market Watch. “That at least is the conclusion reached by a frightening chart that has been making the rounds on Wall Street. The chart superimposes the market’s recent performance on top of a plot of its gyrations in 1928 and 1929. The picture isn’t pretty. And it’s not as easy as you might think to wriggle out from underneath the bearish significance of this chart.”

“I should know, because I quoted a number of this chart’s skeptics in a column I wrote in early December,” notes Wall Street analyst Mark Hulburt. “Yet the market over the last two months has continued to more or less closely follow the 1928-29 pattern outlined in that two-months-ago chart. If this correlation continues, the market faces a particularly rough period later this month and in early March. (See chart, courtesy of Tom McClellan of the McClellan Market Report; he in turn gives credit to Tom DeMark, a noted technical analyst who is the founder and CEO of DeMark Analytics.)”

“One of the biggest objections I heard two months ago was that the chart is a shameless exercise  in after-the-fact retrofitting of the recent data to some past price pattern,” Hulburt notes. “But that objection has lost much of its force. The chart was first publicized in late November of last year, and the correlation since then certainly appears to be just as close as it was before. To be sure, as McClellan acknowledged: ‘Every pattern analog I have ever studied breaks correlation eventually, and often at the point when I am most counting on it to continue working. So there is no guarantee that the market has to continue following through with every step of the 1929 pattern. But between now and May 2014, there is plenty of reason for caution.’ Tom Demark added in interview that he first drew parallels with the 1928-1929 period well before last November. ‘Originally, I drew it for entertainment purposes only,’ he said—but no longer: ‘Now it’s evolved into something more serious.’”….

To read the rest of the column, please click here.

>> Please click here to read Implosion: Can American Recover From Its Economic & Spiritual Challenges In Time?

 


Joel C. Rosenberg’s Blog

Egypt Stays One Step Ahead of Obama [Dan From New York]

Guest post by Dan From New York

I had argued some time ago that the fall of Morsi and the Muslim Brotherhood in Egypt dealt a crushing blow to Obama’s scheme to empower the Islamist side in Israel’s volatile region – one which would be hard-to-impossible for Obama to turn back.

Now comes word the Egyptian military has taken further steps to shore up its gains; gains which Obama is now in no position to reverse.

To date, most of Obama’s foreign debacles have been easy for him and the White House media to sweep under the rug.

But this one is different. It’s disruptive, permanent and impossible to cover up.

12/25/2013

Egypt Names Muslim Brotherhood a Terrorist Group

CAIRO (AP) — Egypt’s military-backed interim government has declared the Muslim Brotherhood a terrorist group, a dramatic escalation that gives authorities more power in cracking down on them.

Hossam Eissa, the Minister of Higher Education, read out the Cabinet statement after long meeting on Wednesday.

Eissa said: “The Cabinet has declared the Muslim Brotherhood group and its organization as a terrorist organization.”

Eissa added that the implications of the declaration punish those who belong to the group, financing it and those promoting the group’s activities.

Continue reading here

Image: Frontpage

Doug Ross @ Journal

U.S. Web Attacks Skyrocket Ahead of Mid East Action: 81% Above Normal *Real Time Heat Map*

Outgoing Department of Homeland Security secretary Janet Napolitano ominously warned of a coming “cyber event” in an open letter to her successor this week, claiming that such an attack on the domestic internet “will have a serious effect on our lives, our economy, and the everyday functioning of our society.”

With tensions at a breaking point in the middle east, and all military options on the table, there can be no doubt that we (meaning all sides involved) are now engaged in cyber warfare ahead of traditional military activities.

According to Akamai, which monitors global internet conditions, the United States is experiencing a surge in web attacks this morning, clocking in at 81% above normal.

webattacks-082813

Via: The Woodpile Report
See the Real Time Web Attack Heat Map

While not necessarily indicative of an immediate threat to the national cyber infrastructure, the up-surge in web attacks comes on the heels of last week’s breakdown of the NASDAQ trading system, which handles billions of dollars in capital flows on an hourly basis.

Last week may have been a prelude to what is to come should the United States and western allies launch another offensive in the middle east. As we reported last week, one major internet security firm indicated that the attack on the U.S. stock exchange was not a “glitch” as suggested by the NASDAQ. Rather, it may have originated from the Cyber Fighters of Izz ad-Din al-Qassam, an Iranian backed organization.

Russia, China, Iran, Syria and a host of other nations would like nothing more than to end U.S. hegemony in the middle east, and bringing down our domestic internet could be one potential strategy should conflict spread beyond the borders of Syria.

As noted by Napolitano, such an attack could be crippling to the systems of commerce that keep the U.S. economy moving. Should an attack, for example, target the merchant processing systems and large banking institutions like they did the NASDAQ utilizing a large-scale coordinated distributed denial of service attack (DDOS) it would paralyze the flow of money between customers, companies, and their financial accounts.

Such an “event” would have immediate consequences for all aspects of commerce including everything from just-in-time stocking of grocery stores and transportation systems, to labor force compensation and consumer activity.

In addition, DHS and well known Cyber Security firms like Norton and Mcafee have previously warned that attacks would likely not be limited to just our systems of commerce, but would also target physical infrastructure like the power grid, water plants and oil refinery operations.

When Janet Napolitano suggests the effects on our lives will be “serious,” she means it. In a study looking at the effects of a widespread infrastructure outage that targets our power grid for an extended period of time it was noted that a large percentage of the population – up to 90% of americans – would be dead within a year.

The U.S. government has been simulating the collapse of our financial system as the result of a cyber attack for many years. They know this is a distinct possibility, so they are preparing for it.

We urge our readers to consider the ramifications of such an attack and make an effort to prepare personal contingency plans should it ever come to pass. The blow back could potentially be as disastrous as a nuclear weapon being detonated in a major U.S. city.


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You