Corporations Are Defaulting On Their Debts Like It’s 2008 All Over Again - Michael Snyder The Economic Collapse Blog

Corporations Are Defaulting On Their Debts Like It’s 2008 All Over Again April 19, 2016  - Michael Snyder  The Economic Collapse Blog The Dow closed above 18,000 on Monday for the first time since July.  Isn’t that great news?  I truly wish that it was.  If the Dow actually reflected economic reality, I could stop writing about “economic collapse” and start blogging about cats or football.  Unfortunately, the stock market and the economy are moving in two completely different directions right now.  Even as stock prices soar, big corporations are defaulting on their debts at a level that we have not seen since the last financial crisis.  In fact, this wave of debt defaults have become so dramatic that even USA Today is reporting on it… Get ready to step over some landmines, investors. The number of companies defaulting on their debt is hitting levels not seen since the financial crisis, and it’s not just a problem for bondholders. So far this year, 46 companies have defaulted on their debt, the highest level since 2009, according to S&P Ratings Services. Five companies defaulted this week, based on the latest data available from S&P Ratings Services. That includes New Jersey-based specialty chemical company Vertellus Specialties and Ohio-based iron ore producer Cliffs Natural. Of the world’s defaults this year, 37 are of companies based in the U.S. Meanwhile, coal producer Peabody Energy (BTU) and surfwear seller Pacific Sunwear (PSUN) this week filed plans for bankruptcy protection. Shares of Peabody have dropped 97% over the past year to $2 a share and Pacific Sunwear stock is off 98% to 4 cents a share. A lot of big companies in this country have fallen on hard times, and it looks like bankruptcy attorneys are going to be absolutely swamped with work for the foreseeable future. So why are stock prices soaring right now?  After all, it doesn’t seem to make any sense whatsoever. And it isn’t just a few bad apples that we are talking about.  All across the spectrum, corporate revenues and corporate earnings are down.  At this point, earnings for companies on the S&P 500 have plunged a total of 18.5 percent from their peak in late 2014, and it is being projected that corporate earnings overall will be down 8.5 percent for the first quarter of 2016 compared to one year ago. As earnings decline, a lot of big companies are getting into trouble with debt, and we have already seen a very large number of corporate debt downgrades.  In recent interviews, I have been bringing up the fact that the average rating on U.S. corporate debt has now fallen to “BB”, which is already lower than it was at any point during the last financial crisis. A lot of people don’t seem to believe me when I share that fact, but it is absolutely true. One of the big reasons why corporate debt is being downgraded is because a lot of these big companies have been going into enormous amounts of debt in order to buy back their own stock.  The following comes from Wolf Richter… Downgrades ascribed to “shareholder compensation,” as Moody’s calls share buybacks and dividends, have been soaring, according to John Lonski, Chief Economist at Moody’s Capital Markets Research. The moving 12-month sum of Moody’s credit rating downgrades of US companies, jumped from 32 in March 2015, to 48 in December 2015, and to 61 in March 2016, nearly doubling within a year. The last time the number of downgrades attributed to financial engineering reached 61 was in early 2007. It would hit its peak of 79 in mid- 2007, a few months before the beginning of the Great Recession in Q4 2007. At the time, stocks were on the verge of commencing their epic crash. When corporations go into the market and buy back their own stock, they are slowly cannibalizing themselves.  But we have seen these stock buybacks soar to record levels for a couple of reasons.  Number one, big investors want to see stock prices go up, and so big investors tend to really like these stock buybacks and will generally support corporate executives that wish to engage in doing this.  Number two, if you are a greedy corporate executive that is heavily compensated by stock options, you very much want to see the stock price go up as well. So the name of the game is greed, and stock buybacks have been fueling much of the rise in U.S. stock prices that we have been seeing recently. However, the truth is that nothing in the financial world lasts forever, and this irrational bubble will ultimately come to an end as well. Earlier today, I am across an article that included a comment from Michael Hartnett of Bank of America Merrill Lynch.  He believes that there are a lot of parallels between what is happening today and the period of time that immediately preceded the bursting of the dotcom bubble… Back then, as could be the case today, a bull market & a US-led economic recovery was rudely interrupted by a crisis in Emerging Markets. The crisis threatened to hurt Main Street via Wall Street (the Nasdaq fell 33% between Jul-Oct 1998, when [Long-Term Capital Management] went under). Policy makers panicked and monetary policy was eased (with hindsight unnecessarily). Fresh liquidity combined with apocalyptic investor sentiment very quickly morphed into a violent but narrow equity bull market/bubble in 1998/99, one which ultimately took valuations & interest rates sharply higher to levels that eventually caused a “pop”. Like Hartnett, I definitely believe that a major “pop” is on the way, although I would like for it to be delayed for as long as possible. Someday we will look back on these times with utter amazement.  It has been absolutely incredible how the financial markets have been able to defy economic reality for so long. But they can’t do it forever, and according to a brand new CNN survey Americans are becoming increasingly pessimistic about where the real economy is heading… In a new CNNMoney/E*Trade survey of Americans who have at least $10,000 in an online trading account, over half (52%) gave the U.S. economy as a “C” grade. Another 15% rated the economy a “D” or “F.” This gloom persists despite the fact that the stock market is on the upswing again. The Dow topped 18,000 Monday for the first time since July 2015. If some Americans think that the U.S. economy deserves a “D” or an “F” grade right now, just wait until they see what is in our immediate future. Personally, I give our economy an “A” for being able to maintain our unsustainable debt-fueled standard of living for as long as it has.  Somehow we have managed to consume far more than we produce for decades, and the largest debt bubble in the history of the planet just keeps getting bigger and bigger and bigger. Of course we are very much living on borrowed time at this point, but I truly hope that the bubble economy can keep going for at least a little while longer, because nobody should want to see what is coming afterwards. *About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

Charity Organization in Israel Nullifies All Debts In Observance of Shmittah

(Photo: GraphicStock)

Charity Organization in Israel Nullifies All Debts In Observance of Shmittah

By Raphael Poch September 11, 2015

“At the end of seven years you will make a release. And this is the manner of the release: to release the hand of every creditor from what he lent his friend; he shall not exact from his friend or his brother, because the time of the release for the Lord has arrived.” (Deuteronomy 15:1–2)

As the shmittah year comes to a close, one of the most prominent charity organizations in Israel is observing a rare biblical commandment to nullify debts. Karmey Chesed, an organization which lends money to individuals who come from low income backgrounds, or who have fallen on hard times, will be enacting the biblical law to its full extent.

The observance of shmittah has several dimensions, one of which is the waiving of all outstanding debts, which is always done at the end of the shmittah year. In modern times, to help prevent economic difficulties, a halachic mechanism called pruzbul circumvents this loan amnesty. However, many rabbinic leaders believe that wherever one can follow the biblical rule, it is best to do so.

“The Torah demands that we maintain high moral standards, which should not be affected by changing times and changing economic circumstances,” said Rabbi Benjamin Lau, a prominent Orthodox rabbi in Jerusalem. Karmey Chesed has elected to follow this line of thinking, and is granting loan amnesty to all those to whom the organization has loaned money in the past seven years.

While granting loan amnesty was done in the times of the Bible, it is very uncommon in the modern era. However, as many of the people receiving help from Karmey Chesed may never be able to repay the loans that they have taken, Aryeh Weingarten, the Director of Karmey Chesed, is forgiving the debt.

A local rabbi from Beitar, where Weingarten lives and works, said that Weingarten is known for his generosity and philanthropy. “Aryeh’s whole life is dedicated to helping others. He has a fear of God and he helps all kinds of people, from all walks of life,” he said.

Weingarten had come to the rabbi and asked several questions about how his organization should observe the shmittah, particularly the rule of absolving debt. “Most people today are not aware of this commandment and most of those who are aware of it use a loophole to guarantee the loan is paid back after the end of the shmittah year. However, Aryeh has taken the higher road,” said the rabbi.

He added that Karmey Chesed is embodying biblical values, explaining, “While it is possible to use the loophole, it is also vitally important to go back to our biblical roots, and to really act with mercy and loving kindness towards those who are disadvantaged in the community, and that is what Karmey Chesed is doing.”

The laws of loan amnesty take effect at the end of the Jewish year, which falls on the evening of September 13 with the onset of the holiday of Rosh Hashanah.

Read more at http://www.breakingisraelnews.com/48695/charity-organization-in-israel-nullifies-all-debts-in-observance-of-shmittah-jewish-world/#GDBo4g6K21f0OQVO.99

Paulette Reed: Jewish New Year Almost Here - "The Year of The Window"

Paulette Reed:

2015 - The Year of the Window: 

A Year of Watching and Revelation

The Elijah List

As we approach Rosh Hashanah, we'll transition from the year of the door to the year of the window. For 2015 the Jewish calendar shows the year 5775 as HEY (a window, looking, hands lifted, beholding something great, reveal.) (See HEY photo below)

Two Thousand and Fifteen will be a year of seeing: a year of watching and tremendous revelation. 

We will need to stand strong in our identity in Christ as we speak to the mountains that are revealed. As we take authority in Christ we are going to see huge advancements in the Kingdom of God, but not without a battle.

We're also going to hear sounds of Jubilee like we've never heard before. We're going to hear sounds of victory and new music coming to the earth. 

New worship teams and worship leaders will emerge and lead us into the presence of the Lord like never before. We're entering a season of harvest and reward following hard work – a year of Jubilee.

• This will be a year that Believers will be blessed so they can bless others.

Debt Cancellation

At the end of every seventh year, cancel all debts. This is the procedure: Everyone who has lent money to a neighbor writes it off. You must not press your neighbor or his brother for payment: All-Debts-Are-Canceled—God says so. You may collect payment from foreigners, but whatever you have lent to your fellow Israelite you must write off. Deuteronomy 15:1-2, MSG

• This will be a year of canceling debts and releasing money.

Sabbatical for the Land

God spoke to Moses at Mount Sinai: "Speak to the People of Israel. Tell them, When you enter the land which I am going to give you, the land will observe a Sabbath to God. Sow your fields, prune your vineyards, and take in your harvests for six years. But the seventh year the land will take a Sabbath of complete and total rest, a Sabbath to God; you will not sow your fields or prune your vineyards.

Don't reap what grows of itself; don't harvest the grapes of your untended vines. The land gets a year of complete and total rest. But you can eat from what the land volunteers during the Sabbath year—you and your men and women servants, your hired hands, and the foreigners who live in the country, and, of course, also your livestock and the wild animals in the land can eat from it. Whatever the land volunteers of itself can be eaten." Leviticus 25:3-7, MSG

During a year of rest, residents of the land do not plow their fields. They also give up ownership of their land, and if some produce grows on its own, it is for anyone's taking.

• This will be a year of releasing the land.

Keeping Our Eyes on Jesus

When we take a break from constant work and focus on Jesus and His window of revelation, our faith and trust are stretched, and consequently they grow. For those who put total trust in God there will be a rich reward.

"Keep My decrees and observe My laws and you will live secure in the land. The land will yield its fruit; you will have all you can eat and will live safe and secure. Do I hear you ask, 'What are we going to eat in the seventh year if we don't plant or harvest?' I assure you, I will send such a blessing in the sixth year that the land will yield enough for three years. While you plant in the eighth year, you will eat from the old crop and continue until the harvest of the ninth year comes in." Leviticus 25:21-22 MSG

Throughout history, during a time of rest for and from the land, people packed the synagogues. We too will see churches and ministries filling up. Even if people don't understand that it's a year of rest, they will be drawn in by the anointing.

• This will be a year of serving from a place of rest.

Increased Faith upon the Earth

Believers will receive a renewing of faith and focus more on faith in God and less on faith in their own talents and skills.

• This will be a year of increased faith.

Paulette Reed
Prophetic Arrow Ministries

Email: info@propheticarrow.org
Website: propheticarrow.org

Paulette Reed is a powerful preacher, prophetic minister, encourager, and author. She is a full-time revivalist/evangelist. Her passion is to share the love of Christ and unite people to the inexplicable love of our Heavenly Father, exhorting them to arise and shine! She is an extremely accurate prophetess who has been raised up to bring hope and healing to the Body of Christ. Without a vision the people perish, so the Lord is using this handmaiden as His mouthpiece to speak forth individual and corporate vision, catapulting people into their destinies. 

Paulette loves to see God's people awakened and proclaim the active extension of the Kingdom on earth as it is in Heaven. She ministers in the revival anointing accompanied by revelatory ministry, healing, miracles, signs and wonders.

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