Business

By EconMatters

At the peak of the last financial crisis, as the credit liquidation wave was jumping from one highly levered product to the next, one of the hardest hit sectors was Collateralized Loan Obligations (CLO) space, where the rout and massive P&L losses across most tranches led to a revulsion for new issuance, which effectively shut down the sector for the next 3 years.

Submitted by Harry Dent via EconomyandMarkets.com,

So the S&P 500 is out of correction for now and the coast is clear. NOT! This is exactly what we’ve been predicting would happen – after reaching new lows, stocks would have to bounce before they inevitably resume their longer-term trend, which is down.

But stocks haven’t been the only victims of late. Just a couple weeks ago the January nonfarm payroll report came in at 151,000 jobs. So much for the expected 190,000! And of the ones reported, they were mostly low-wage jobs.

More and more analysts and commentators have caught to the fact that the Powers That Be are actively preparing for the next financial crisis with even more extreme measures.

These measures include:

1)   Bank bail-ins

2)   Cash Bans

3)   NIRP

As we’ve been noting since 2013, the template for this process was first laid out in Europe, specifically in Cyprus. With that in mind, it’s worth remembering just how it played out there.

The quick timeline for what happened in Cyprus is as follows:

In December, Janet Yellen hiked right into what might as well be a recession in what Marc Faber suggests will go down as one the most ill-timed policy maneuvers in the history of central banking.

Things didn’t fall apart immediately, but the situation started to deteriorate markedly at the beginning of last month when collapsing crude prices and a bungled attempt to implement a circuit breaker in China triggered harrowing bouts of volatility across markets and set investors up for one of the most inauspicious starts to a year in history.