Contagion

Is there anyone who is still unsure about whether the bond market panic in Europe can cross the ocean? Because I would hate for anyone to be able to say they weren't warned, I will say it again. I was all alone six months ago when I said the bond market would start panicking by the end of March and that it would end in the worst collapse in history. People thought I was nuts. Read these two articles from today and see if any experts still think I'm nuts. This is the real deal, and marching along exactly on the timeline I originally gave, just like clockwork.

My point is not that right now I am the most accurate economic forecaster on earth (though I seem to be), but that you know that when I tell you something is about to happen and you need to act preemptively, you won't stand around wondering if I know what I'm talking about. This has the potential to be a $600 TRILLION dollar collapse, not $5 or $10 trillion like in 2008.

Excerpt below is from the following article.

“The EU’s inability to contain the Greek crisis is sparking concern that other countries will have to fend for themselves and will struggle to win support from European parliaments. Portugal’s PSI-20 benchmark dropped 5.4 percent today, the most since the aftermath of Lehman Brothers Holdings Inc.’s collapse. Spain’s IBEX 35 Index dropped 4.2 percent.

Contagion

“There is a clear risk that contagion pressures might intensify in the coming months, perhaps after a brief respite immediately after the Greek package is finalized and money starts being disbursed,” said Marco Annunziata, chief European economist at UniCredit Group in London.”

Another excerpt from another article.

ATHENS -- Greece was pushed to the brink of a financial abyss and started dragging another eurozone country - Portugal - down with it Tuesday, fueling fears of a continent-wide debt meltdown.

Stocks around the world tanked when ratings agency Standard & Poor's downgraded Greek bonds to junk status and downgraded Portugese bonds two notches, showing investors that Greece's financial contagion is spreading.

Major European exchanges fell more than 2.5 percent, and on Wall Street, the Dow Jones industrial average finished down more than 200 points. The euro slid more than 1 percent to nearly an eight-month low.

"We have the makings of a market crisis here," said Neil Mackinnon, global macro strategist at VTB Capital.

Greece is struggling with massive debt, and with prospects for economic growth weak it could end up in default. Its 15 eurozone partners and the International Monetary Fund have tried to calm the markets with a euro45 billion rescue package, but it hasn't worked.

Standard & Poor's warned that holders of Greek debt could take large losses in any restructuring, but a greater worry is that Greece's debt crisis is mushrooming to other debt-laden members of the eurozone.

One more article.

And another.