This time is different, itâs not just panic, because we have something new on top of all, itâs called New World Order.
Are we headed for a crash?
- Thread starter heidegger
- Start date
No, dear Martin. We are not finished. I just voted.
If you look at the S&P 500 from 1997-2002, there were quite a few periods where 3% to 6% daily moves were tightly clustered. While we're definitely seeing more volatility, the market has certainly been more volatile in the past. So I agree, a 3% or 4% daily move definitely isn't a real crash. If it were, we had dozens of crashes (and mega-rallies) five to ten years ago.
While I think that the rapidity and fear of the liquidity issue has caught almost everyone by surprise, you can hardly argue that most of us didn't see at least a part of it coming - we all just didn't think it would really matter outside of the RE sector.
Free-floating fiat currencies have muddied the waters so effectively that a better definition of 'crash' would be a lack of change in asset prices for years relative to the additional liquidity pumped into the system and resultant inflation. Money supply, CB intervention, President's working group intervention, and even ultimately legislation will ensure the fountain keeps flowing, but that asset appreciation simply changes to another sector.
Once things sort out most of these assets will be bargains, but right now no real good bottom in sight, huh?
Free-floating fiat currencies have muddied the waters so effectively that a better definition of 'crash' would be a lack of change in asset prices for years relative to the additional liquidity pumped into the system and resultant inflation. Money supply, CB intervention, President's working group intervention, and even ultimately legislation will ensure the fountain keeps flowing, but that asset appreciation simply changes to another sector.
Once things sort out most of these assets will be bargains, but right now no real good bottom in sight, huh?
comparing past volatility to present day volatility is not correct, you have to look at why the underlying volatility is being created.
The dominoe effect, from current exposure is unique, the present circumstances are unique. The underlying macro forces, and psychological impact, create PTSD type, post traumatic stress disorder type price action.
This price action combined with macro forces are predicted to create, a post March 2000 decline.
If you look at the sp500, it basically corrected 800 points in March 2000 and after, and regained all of it, with the present situation its possible that it corrects as much or half to the long term trend.
It means 1160 or 1200 on the SP. I sense a 'anemic' type situation in the world approaching or maybe I just need some good antidepressants. I'm looking around day to day, and look at what peoples capital structure is like. Are they overextended? It seems most of america is overextended, and it seems all the evils from the past are revisiting us. The consumer debt situation combined with the psychological impact, should tip us into recession.
With the trend of savings funneled into government bonds and being risk averse. A bear market trading range for the future in equities. this creates inflows into government debt, creating the last bubble if government expenditure still maintains present levels, foreign debt financing will become less, creating a situation where the bond market gets decimated similar to equities, increasing borrowing costs that trickle down to everyone. In this type of situation paper money will become paper, as asset deflation progresses, GOLD will get decimated, until hyperinflation becomes blatantly obvious. Gold only becomes a safe haven only at the start of hyperinflation visibility. Then price action in the commodity will propel it higher and higher.
The end result of all this is, 'conservitization of the american consumer', where we get back to fundamentals and create products of worth to the world, instead of moving paper in a ponzi scheme.
The dominoe effect, from current exposure is unique, the present circumstances are unique. The underlying macro forces, and psychological impact, create PTSD type, post traumatic stress disorder type price action.
This price action combined with macro forces are predicted to create, a post March 2000 decline.
If you look at the sp500, it basically corrected 800 points in March 2000 and after, and regained all of it, with the present situation its possible that it corrects as much or half to the long term trend.
It means 1160 or 1200 on the SP. I sense a 'anemic' type situation in the world approaching or maybe I just need some good antidepressants. I'm looking around day to day, and look at what peoples capital structure is like. Are they overextended? It seems most of america is overextended, and it seems all the evils from the past are revisiting us. The consumer debt situation combined with the psychological impact, should tip us into recession.
With the trend of savings funneled into government bonds and being risk averse. A bear market trading range for the future in equities. this creates inflows into government debt, creating the last bubble if government expenditure still maintains present levels, foreign debt financing will become less, creating a situation where the bond market gets decimated similar to equities, increasing borrowing costs that trickle down to everyone. In this type of situation paper money will become paper, as asset deflation progresses, GOLD will get decimated, until hyperinflation becomes blatantly obvious. Gold only becomes a safe haven only at the start of hyperinflation visibility. Then price action in the commodity will propel it higher and higher.
The end result of all this is, 'conservitization of the american consumer', where we get back to fundamentals and create products of worth to the world, instead of moving paper in a ponzi scheme.
In a few years, all this talk about the financial ruin of the US might come true. Just remember, the last time - the Seventies - Europe joined in the fun. This time around, it'll be Europe and Japan, at minimum.
But that's for the future. For now, while all this ruin talk is flying around, the XLF has already tested and bounced off its lowest levels, and actually closed higher two weeks running on a weekly closing basis.
This is classic bottoming behavior: maximum publicity, while prices not only behave, but actually start to go higher. Around here, it's so bad that multiple threads have been opened about leaks coming out of that dastardly Fed explaining the Thursday action in the financials. No one believes that it might just have been a case of the sellers finally being exhausted.
I'll be very surprised, at this point, if this isn't the real bottom for this move. Of course, being surprised is a constant in these markets.
But that's for the future. For now, while all this ruin talk is flying around, the XLF has already tested and bounced off its lowest levels, and actually closed higher two weeks running on a weekly closing basis.
This is classic bottoming behavior: maximum publicity, while prices not only behave, but actually start to go higher. Around here, it's so bad that multiple threads have been opened about leaks coming out of that dastardly Fed explaining the Thursday action in the financials. No one believes that it might just have been a case of the sellers finally being exhausted.
I'll be very surprised, at this point, if this isn't the real bottom for this move. Of course, being surprised is a constant in these markets.
We are not headed for any type of Crash, or 87 style drop.
We are now entering the first of many phases of the Bear Market.
Much like the when I traded during 2001-2004, everytime the Fed Cut, we would rally, then fail and break lower.
The pattern is not diffrent this time around, however, the situtaion is far worse in the sense of "Credit" and "Liquidity".
Housing Failers and some bank failuers could bring a S&L like feel, but not sure it will be worse than in the RE crash in in the 80s.
Recession is here. The Bear is here. Odds for a crash are not worth posting.
E
We are now entering the first of many phases of the Bear Market.
Much like the when I traded during 2001-2004, everytime the Fed Cut, we would rally, then fail and break lower.
The pattern is not diffrent this time around, however, the situtaion is far worse in the sense of "Credit" and "Liquidity".
Housing Failers and some bank failuers could bring a S&L like feel, but not sure it will be worse than in the RE crash in in the 80s.
Recession is here. The Bear is here. Odds for a crash are not worth posting.
E
usually there is a buffer, that protects us from a trend change, that buffer is another asset class inflation coinciding with the asset in trouble.
the problem is asset inflation or psychological management of it, wasn't stewarded well by the powers that be. Bernanke, thought he was doing everything right. By increasing interest rates progressively and trying to protect us from inflation. A certain amount of interest rate increases were needed, since you need to build up bullets for the next deflationary cycle, otherwise you we would be in the situation of Japan where Japan has no bullets left.
the storm hit before asset inflation could take a foot hold in equities. Thus there is nothing protecting us. Bernanke must be smarter then this, and extremely aggressive action needs to be taken, otherwise we become like the Japanese. Spending will be constrained globally.
the problem is asset inflation or psychological management of it, wasn't stewarded well by the powers that be. Bernanke, thought he was doing everything right. By increasing interest rates progressively and trying to protect us from inflation. A certain amount of interest rate increases were needed, since you need to build up bullets for the next deflationary cycle, otherwise you we would be in the situation of Japan where Japan has no bullets left.
the storm hit before asset inflation could take a foot hold in equities. Thus there is nothing protecting us. Bernanke must be smarter then this, and extremely aggressive action needs to be taken, otherwise we become like the Japanese. Spending will be constrained globally.
Might want to at least consider that this is all taking place in the midst of the single broadest economic expansion in the history of the world.
I know, I know...unquestionably a credit bubble wrapped into it...and it will ripple out in some shockwaves that will have a lingering, and at times severe, effect (like over the past month)...but that doesn't cancel out the real growth we've seen.
I know, I know...unquestionably a credit bubble wrapped into it...and it will ripple out in some shockwaves that will have a lingering, and at times severe, effect (like over the past month)...but that doesn't cancel out the real growth we've seen.