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Monday, July 29, 2013

18 Similarities Between The Last Financial Crisis And Today

By Michael Snyder on The Economic Collapse Blog, posting an article with the title "It Is Happening Again: 18 Similarities Between The Last Financial Crisis And Today"

#1 According to the Bank of America Merrill Lynch equity strategy team, their big institutional clients are selling stock at a rate not seen "since 2008".

#2 In 2008, stock prices had wildly diverged from where the economic fundamentals said that they should be. Now it has happened again.

#3 In early 2008, the average price of a gallon of gasoline rose substantially. It is starting to happen again. And remember, whenever the average price of a gallon of gasoline in the U.S. has risen above $3.80 during the past three years, a stock market decline has always followed.

#4 New home prices just experienced their largest two month drop since Lehman Brothers collapsed.

#5 During the last financial crisis, the mortgage delinquency rate rose dramatically. It is starting to happen again.

#6 Prior to the financial crisis of 2008, there was a spike in the number of adjustable rate mortgages. It is happening again.

#7 Just before the last financial crisis, unemployment claims started skyrocketing. Well, initial claims for unemployment benefits are rising again. Once we hit the 400,000 level, we will officially be in the danger zone.

#8 Continuing claims for unemployment benefits just spiked to the highest level since early 2009.

#9 The yield on 10 year Treasuries is now up to 2.60 percent. We also saw the yield on 10 year U.S. Treasuries rise significantly during the first half of 2008.

#10 According to Zero Hedge, "whenever the annual change in core capex, also known as Non-Defense Capital Goods excluding Aircraft shipments goes negative, the US has traditionally entered a recession". Guess what? It is rapidly heading toward negative territory again.

#11 Average hourly compensation in the United States experienced its largest drop since 2009 during the first quarter of 2013.

#12 In the month of June, spending at restaurants fell by the most that we have seen since February 2008.

#13 Just before the last financial crisis, corporate earnings were very disappointing. Now it is happening again.

#14 Margin debt spiked just before the dot.com bubble burst, it spiked just before the financial crash of 2008, and now it is spiking again.

#15 During 2008, the price of gold fell substantially. Now it is happening again. #16 Global business confidence is now the lowest that it has been since the last recession.

#17 Back in 2008, the U.S. national debt was rapidly rising to unsustainable levels. We are in much, much worse shape today.

#18 Prior to the last financial crisis, Federal Reserve Chairman Ben Bernanke assured the American people that home prices would not decline and that there would not be a recession. We all know what happened. Now he is once again promising that everything is going to be just fine.

Are the American people going to fall for it again?

Add to Michael Synder's points is that the stimulus from the Fed's printing money and dumping into the market is or has to stop at some point. Everything Bernanke makes a comments about slowing or stopping the fiat currency printing, the markets go crazy in a bad way. Not that I have any trust in the market financials anyway. They are hocus pocus.

The welfare rolls continue to grow. We are on target for 1/3 of the American population to be on welfare and this is not counting Social Security Insurance or Disability. Add to the underfunded state and muncialaity retirement costs from cities like Detroit going bankrupt, and there will be many more, is ading to the population rosters of financially strapped and therefore at risk.

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