Red alert: Prepare for severe stock market crash, warns HSBC

The technical analysis team at HSBC is warning recent stock market moves look eerily similar to just before 1987’s ‘Black Monday’, which saw the largest one-day market crash in history.


On October 19, 1987, the Dow Jones Industrial Average which comprises the 30 large US publicly traded companies, lost 22.6 percent of its value.

In a note to clients released Wednesday, Murray Gunn, the head of technical analysis for HSBC, said he was on red alert for an imminent sell-off in stocks in the light of the price action over the past few weeks.

“With the US stock market selling off aggressively on October 11, we now issue a RED ALERT. The possibility of a severe fall in the stock market is now very high,” Gunn wrote.


Other financial firms have also issued red alert warnings. Citigroup told clients that investors aren’t adequately hedging US election risk. The managing director at Citi Thomas Fitzpatrick has also pointed at the market’s similarities to the 1987 crash.

The volatility has continued to rise since the end of the summer and the recent sell-off was seen across many areas of the market, and not just selected groups, according to the HSBC analyst.

Last month, Gunn warned stocks were under an “orange alert.”Following the Dow Jones’ 200-point decline on Tuesday, Gunn threw up the ultimate warning signal, saying the drop is here.

The key levels that HSBC team is watching are 17,992 in the Dow Jones Industrial Average and 2,116 in the S&P 500.

“As long as those levels remain intact, the bulls still have a slight hope. But should those levels break and the markets close below, which now seems more likely, it would be a clear sign that the bears have taken over and are starting to feast,” Gunn said.

“The possibility of a severe fall in the stock market is now very high,” he added.

READ MORE: Wall Street closes down 3.6%, worst plunge since 2011

Wall Street stocks closed slightly higher on Wednesday – the Dow rose 15.54 points, or 0.09 percent, to 18,144.2. The S&P 500 gained 2.45 points, or 0.11 percent, to 2,139.18.

In its technical analysis the HSBC team uses the Elliott Wave Principle which tracks alternating patterns in the stock market to discern investor behavior and possible next moves.

Debt Under Obama Up $9,000,000,000,000…


( – The federal government passed a fiscal milestone on the first business day of fiscal 2017—which was Monday, Oct. 3—when the total federal debt accumulated during the presidency of Barack Obama topped $9,000,000,000,000 for the first time.

On Jan. 20, 2009, when Obama was inaugurated, the total debt of the federal government was $10,626,877,048,913.08, according to data published by the U.S. Treasury.

As of the close of business on Friday, Sept, 30, the last day of fiscal 2016, the total federal debt was $19,573,444,713,936.79. At that point, the total federal debt had increased under Obama by $8,946,567,665,023.71.

On Monday, Oct. 3, the first business day of fiscal 2017, the total federal debt closed at $19,642,949,742,561.51. At that point, the debt had increased under Obama by $9,016,072,693,648.43 from the $10,626,877,048,913.08 it stood at on the day of Obama’s inauguration.

As of the close of business, on Wednesday, Oct. 5—the latest day for which the Treasury has reported—the total federal debt was $19,663,411,497,797.40. That means that so far in Obama’s presidency, the federal debt has increased $9,036,534,448,884.32.

Given that there were 118,215,000 households in the United States in June (the latest estimate from the Census Bureau), the $9,036,534,448,884.32 increase in the federal debt under Obama so far equals approximately $76,442 per household.

The Treasury divides the total debt into two major parts: “debt held by the public” and “intragovernmental debt.” Debt held by the public are U.S. government securities—including bills, notes and bonds—held by individuals and institutions outside the U.S. government. Intragovernmental debt is the money that the Treasury has borrowed and spent out of federal government trust funds such as those for the Social Security program.

According to the Treasury, during Obama’s time in office so far, the “debt held by the public” has climbed from $6,307,310,739,681.66 on Jan, 20, 2009 to $14,170,897,492,757.91 on Oct. 5, 2015. That is an increase of $7,863,586,753,076.25—or about 125 percent.

The amount that President Obama has increased the total federal debt so far–$9,036,534,448,884.32—is $4,137,434,138,275.88 more (or 84 percent more) than President George W. Bush increased the debt during his full eight years in office.

When President George W. Bush took office on Jan. 20, 2001, the total federal debt was $5,727,776,738,304.64. During his eight years as president it increased by $4,899,100,310,608.44 to $10,626,877,048,913.08

It took the United States, which declared independence in 1776, 231 years to accumulate its first $9,000,000,000,000 in debt—with the debt first surpassing that level on the last day of August 2007.

On August 31, 2007, the total federal debt was $9,005,648,561,262.70, Since then it has grown by $10,657,762,936,534.70 (or approximately 118 percent) to the current level of $19,663,411,497,797.40



US created lower-than-expected 156,000 jobs in September


Nonfarm payrolls increased 156,000 for the month and the unemployment rate ticked up to 5 percent, the Bureau of Labor Statistics reported Friday. Economists surveyed by Reuters had expected 176,000 new jobs and the jobless rate to hold at 4.9 percent. The total was a decline from the upwardly revised 167,000 jobs in August (compared with the original number of 151,000).

“This is within the broad range of expectations,” said Mark Hamrick, senior economic analyst at “The main point is, slow and steady does win the race for this recovery, which began in the summer of 2009.”

Average hourly wages pushed higher, rising 6 cents to an annualized rate of 2.6 percent. The average work week also inched up one-tenth to 34.4 hours.

Fed's Mester: It's a 'solid' labor report

Fed’s Mester: It’s a ‘solid’ labor report  2 Hours Ago | 02:00

Job creation edged lower in September as the labor market showed there still may be room to run.

Nonfarm payrolls increased 156,000 for the month and the unemployment rate ticked up to 5 percent, the Bureau of Labor Statistics reported Friday. Economists surveyed by Reuters had expected 176,000 new jobs and the jobless rate to hold at 4.9 percent. The total was a decline from the upwardly revised 167,000 jobs in August (compared with the original number of 151,000).

“This is within the broad range of expectations,” said Mark Hamrick, senior economic analyst at “The main point is, slow and steady does win the race for this recovery, which began in the summer of 2009.”

Average hourly wages pushed higher, rising 6 cents to an annualized rate of 2.6 percent. The average work week also inched up one-tenth to 34.4 hours.

A broader measure of unemployment that includes those who have stopped looking for jobs as well as those working part-time for economic reasons was unchanged at 9.7 percent.

The number of workers considered not in the labor force fell by 207,000 to 94.2 million, the number in the labor population surged by 444,000 and the level of the employed jumped by 354,000, according to the household survey. The employment-to-population ratio rose to 59.8 percent, a half-percentage point gain from a year ago.

Professional and job services led the way with 67,000 new jobs while health care added 33,000 and restaurants and bars contributed 30,000.

The report comes at a critical time for the Federal Reserve as the U.S. central bank looks to resume getting rates back to normal. The Fed last hiked rates in December, the first such move in more than nine years. However, it has held off since then amid a variety of global and domestic concern.

Traders expect the Fed to hike again in December.

“This is a solid number,” Cleveland Fed President Loretta Mester told CNBC. “This is very consistent with what we expected to see, certainly with my forecast.”

Traders pushed chances for a December rate hike higher, from 63.9 percent prior to the payrolls report to 70.2 percent afterward.

Panic, Anxiety Spark Rush for Luxury Bunkers Among the Super-Rich… Underground Pools, Bowling Alleys, Gardens…

Oscar winners, sports stars and Bill Gates are building lavish bunkers — with amenities ranging from a swimming pool to a bowling alley — as global anxiety fuels sales and owners “could be the next Adam and Eve.”

Given the increased frequency of terrorist bombings and mass shootings and an under-lying sense of havoc fed by divisive election politics, it’s no surprise that home security is going over the top and hitting luxurious new heights. Or, rather, new lows, as the average depth of a new breed of safe haven that occupies thousands of square feet is 10 feet under or more. Those who can afford to pull out all the stops for so-called self-preservation are doing so — in a fashion that goes way beyond the submerged corrugated metal units adopted by reality show “preppers” — to prepare for anything from nuclear bombings to drastic climate-change events. Gary Lynch, GM at Rising S Bunkers, a Texas-based company that specializes in underground bunkers and services scores of Los Angeles residences, says that sales at the most upscale end of the market — mainly to actors, pro athletes and politicians (who require signed NDAs) — have increased 700 percent this year compared with 2015, and overall sales have risen 150 percent. “Any time there is a turbulent political landscape, we see a spike in our sales. Given this election is as turbulent as it is, we are gearing up for an even bigger spike,” says marketing director Brad Roberson of sales of bunkers that start at $39,000 and can run $8.35 million or more (FYI, a 12-stall horse shelter is $98,500).

Adds Mike Peters, owner of Utah-based Ultimate Bunker, which builds high-end versions in California, Texas and Minnesota: “People are going for luxury [to] live underground because they see the future is going to be rough. Everyone I’ve talked to thinks we are doomed, no matter who is elected.” Robert Vicino, founder of Del Mar, Calif.-based Vivos, which constructs upscale community bunkers in Indiana (he believes coastal flooding scenarios preclude bunkers being safely built west of the Rockies), says, “Bill Gates has huge shelters under every one of his homes, in Rancho Santa Fe and Washington. His head of security visited with us a couple years ago, and for these multibillionaires, a few million is nothing. It’s really just the newest form of insurance.”

A hidden door by Creative Home Engineering leads to a secret passageway that connects to an underground bunker.

Rising S Bunkers installed a 37-room, 9,000-square-foot complex in Napa Valley for an Academy Award-winning client that rang in at $10.28 million, with a bowling alley, sauna, jacuzzi, shooting range and an ultra-large home theater. Swimming pools, greenhouses, game rooms and gyms are other amenities offered. This year, on another Napa Valley property, the company constructed a $9 million, 7,600-square-foot compound with horse stables and accommodations for 12, along with four escape tunnels leading to outlets on the estate, multiple hidden rooms — in case “you let someone in whom you do not fully trust,” says Lynch — and an aboveground safe house “disguised as a horse barn.” The company also is designing a $3 million bunker for “a major sports figure from Southern California.”

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The company’s best-selling bunkers for L.A. are 10 by 50 feet, start at $112,000 and have their own power sources, water supplies and air-filtration systems: “These complexes accommodate families of four or five and are self-sustaining,” says Roberson, adding: “You can pretty much put a palace underground anywhere there is physically enough room.” Regardless, Ellia Thompson, chair of land use practice at Ervin Cohen & Jessup in Beverly Hills, notes that zoning guidelines vary throughout L.A., so one should check with the city department of building and safety about permits: “A special permit may be required if you are digging out more dirt than certain basement quantities.”

Business has doubled in the past year at Ultimate Bunker, which just built a $10 million complex on a 700-acre property a few hours north of Minneapolis for a client “known for television, who has his own show,” says Peters. Two 1,000-square-foot bunkers (one for storage) are connected by 300 feet of tunnels to the main 6,800-square-foot home as well as three guesthouses that each boast a $200,000 bunker “to take care of his family and friends,” says Peters. “It’s like an underground mansion with more mansions on top of it.”

Al Corbi, president and founder of S.A.F.E. (Strategically Armored & Fortified Environments), with offices in West Hollywood, says that his most spectacular projects were $100 million subterranean residences, one for a global venture capitalist and the other for an East Coast developer to mimic the Universal CityWalk promenade, with a pizzeria and wellness outpost that, he says, “resembles a Burke Williams day spa.” Corbi says both bunkers protect from nuclear holocaust (8 feet of soil blocks radioactive fallout), pandemic (a positive-pressure air system with HEPA filters keeps contaminants out), electromagnetic pulses and solar flares (using a metal encasement), among other threats. “Power technology has improved tremendously thanks in part to Tesla and lithium-ion batteries that only degrade a maximum of 10 percent after 30 years,” says Corbi. “And now there is food with a 25-year minimum shelf life. [The owners] could be the next Adam and Eve.” (Note to L.A. chefs, however: The rations are grim, ranging from beef Stroganoff to chili.)

A secret entrance to a safe room, complete with a fully stocked bar.


Hollywood’s Newest Home Trend: Safe Rooms

When it comes to the details of secret passageways and hidden doors, many in Hollywood turn to Arizona-based Creative Home Engineering. “We’ve seen year-over-year growth of about 20 percent, but perhaps more telling is an increasing percentage of clientele who need their secret door to employ high-security features,” notes president Steve Humble, who says before, 60 percent of secret doors in cigar rooms, home theaters, children’s bedrooms and the like were for novelty value. “Nowadays, 80 percent are used for security. In the past year, I have performed installations inside two nuclear-protected complexes with more than 10 secret doors each, one in the L.A. area owned by a plastic surgeon.”

Film fantasies play a part in the choice of secret entrances. “Many of my clients come to me knowing what movie secret door they would like duplicated,” says Humble, who cites as top inspirations Indiana Jones and the Last Crusade, the Batman and James Bond franchises, Mr. & Mrs. Smith and Goonies, on which a popular access control device that “requires that a certain sequence of notes be played on the piano to get the door to open” is based. There’s also Get Smart: “At this moment, we are converting a phone booth [inside a private residence] so that when the user dials the correct number, the back panel opens to grant access to a secure area.” He adds: “I can tell you that we’ve built secret doors for many of the most recognizable and highly awarded directors and celebrities in Hollywood. There are a lot of Oscars and Emmys tucked away safely behind my secret doors.”

1. A floor plan for an $8.35 million, 6,000-square-foot bunker from Texas company Rising S Bunkers includes a decked-out game room.

2. The largest swimming pool that Rising S has built measures 40 feet.

3. Fitness rooms are a must to compensate for a lack of outside activity.

4. Natural light tubes and ultraviolet LED lamps promote growth in underground gardens of consumable plants and vegetables.

5. Theaters seat as many as 20 people and come with 10-foot screens.

6. Rising S has seen garages with 15 vehicles, including Rolls-Royces, muscule cars and armored personnel carriers (one client has three).

This story first appeared in the Oct. 14 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

DRAMA: Germany ‘not preparing rescue plans’ for DEUTSCHE BANK…

We got the internal Deutsche Bank memo on its bombed-out share price which says it doesn’t need to raise money


Deutsche Bank sent a memo, seen by Business Insider, to staff reassuring them of the bank’s financial position and coaching them on what to tell clients who ask about the company’s bombed-out share price.

Deutsche Bank shares crashed to a 33-year low this week, amid concerns about big fines in the US and the bank’s general financial health.deutsche

Shares began crashing after the Wall Street Journal reported that the US Department of Justice is seeking a $14 billion (£10.7 billion, €12.4 billion) settlement with the bank over misselling mortgage-backed securities in the run-up to the financial crisis. This led to fears that the bank would have to raise additional capital, as the floated figure is well above Deutsche Bank’s settlement reserves.

In an internal memo to staff, seen by Business Insider, the bank repeats its line that it has “no intention to settle these potential civil claims anywhere near the opening position of $14 billion.” It adds: “Regarding litigation, we are confident we can put some important cases behind us in the near future.”

Deutsche Bank also reassures employees about its financial position in the memo, sent to staff on Tuesday. The bank says it has “no current plans to raise capital” and emphasises that it has ample reserves to cover debt payments.

The memo reads:

“CDS spreads which reflect risk of our senior unsecured debt are no longer an especially reliable proxy for probability of default. Thin volumes amplify price movements. Year-to-date, Deutsche Bank’s funding costs have been substantially lower than CDS spreads indicate.”

CDS stands for “credit default swap” and is basically a form of insurance against Deutsche Bank defaulting on its debt. The price of this insurance has been going up, signalling that the market thinks a default is more likely. But the bank argued in the note that the price does not reflect its underlying business and is more down to a few people making bullish bets than reality.

The bank told staff that the share price “reflects a number of uncertainties regarding the macroeconomic environment, interest rates and the consequences of the Brexit vote, but also regarding DB-specific factors like litigation.”

Deutsche Bank is a “much safer and stronger bank than it was before the financial crisis,” the memo says, adding that “depositors enjoy very significant protection.”

Deutsche Bank declined to comment on the memo when contacted by Business Insider.

As well as reassuring staff privately, Deutsche Bank management have begun a public defence of the share price. An interview with CEO John Cryan was published in Bild, Germany’s best-selling daily, on Wednesday morning carrying the headline: “State aid is not an issue.”

The action appears to be working. Deutsche Bank shares opened over 3% higher on Wednesday, suggesting a possible end to 4 days of steep falls.db

US federal debt Soars At Fatest Pace Since Financial Crisis


US federal debt

A few days ago, the federal debt of the United States rather quietly and unceremoniously passed the$19.5 trillion mark.

And while that figure may seem absolutely confounding, what’s even more alarming is how rapidly the US government is racking up this debt.

In fact, for the 2016 fiscal year that ends in just ten more days, the US government’s debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.

The only two years in all of US history that posted higher US debt growth were 2010 and 2011– the peak of the financial crisis.

Even more acutely, last month the US federal debt grew by $151.5 billion.

Not counting the financial crisis, and a few anomalous months following a debt ceiling reset, August 2016 was the single biggest expansion of US debt EVER.

In other words, US federal debt is expanding at its fastest rate since the financial crisis, and one of the fastest rates in all of US history.

This isn’t supposed to be happening. We’re in ‘peacetime’. The financial crisis is over. The economy is supposedly growing, and unemployment is supposedly falling.

None of the normal big deficit triggers exists; if you read the mainstream press, the news about the US economy is all rainbows and buttercups.

You’d think they would actually be running a surplus at this point and paying down the debt. Or at a minimum the rate of debt growth would be shrinking.

But no. Despite all of this good economic news, the government is still piling up debt at record levels.

If the debt is growing this quickly in good times, just imagine how dire the debt situation will become once the economy slows down and recession kicks in.

US federal debt

US federal debt James Grant - Federal Debt

US federal debt


M.J. Bodhi

The slow walk to collapse continues. Lets the pull the plug and get this over with so we can rebuild.
Sonja Papiro

no not the bow tie – of course the Federal Reserve does NOTHING.. More stores are closing (Kmart closing 64 stores ) Evolution System -is a must have…

I quite like the bow tie, classic. I’m in the arm pit of the earth, SA. it’s freakin scary, 64 Kmart stores close, collapse is within our grasp, even it’s three month’s from now, a year fly’s by…..
Max Amillion

No rate raise. BIG surprise hahah. Been calling it for the past month. Can’t raise, won’t raise. Would ruin Obama’s “legacy”. Greg, you’ve been hammering that point in all year and I hope people have been listening and betting against the banks, getting precious metals and becoming your own bank!
Alan Fox

Low rates is basically backdoor QE, which will continue ad infinitum. Shouldn’t we as investors accept this? Shouldn’t we just buy up equities and assets because it is the only way to make gains over time?
Max Amillion

btw Marc Faber just said that the DOW could do to 100,000. Whaaa?!