Quote from Nine_Ender:
Ok, my mistake a correction is often a 5-10% drop over a short time period ( but often longer then a day ). However, my point is crashes are not that frequent and given that we basically had a market meltdown ending around March 2009 it is highly unlikely we get a crash any time soon.
My other point is throughout the 17 months since March 2009 there have been numerous people predicting market crashes
throughout one of the best bull runs in history. These calls were horrendous costing many people a lot of profits. There is absolutely nothing to suggest a crash is imminent fundamentally this year, earnings are strong and m&a activity is picking up. Every correction that occurs is met with bargain hunters buying up stock.
So I believe people on here are irresponsible to predict market meltdowns when any impetus to create this situation will not arrive for at least a year. At that time, it will be clear if a market meltdown is more likely. But NOTHING today suggests this is a likely scenario at all. The Chicken Little's of this site don't even provide reasons its just a religon to them and the "double dip" type analysts on CNBC ( who were wrong over and over again in 2009 ).
eg Looking at something like Canadian banks they had a huge bull run in 2009 during which they corrected around 5% down on several days on the way up. They make billions every year in profits. How do you justify a lower valuation ? How low could a crash take these stocks before someone gets smart and rebuys these money makers to pocket another 50% gain afterwards ?
So first you think a correction is a 10% drop in one day and now you think there is nothing fundamental predicting a crash?
You want reasons?
Home sales at ALL TIME low
Home prices are headed back down
while mortgage rates are also at historic lows and the govt has been giving away $8k to anyone dumb enough to step in front of that freight train
Most measures of economic health are rolling over despite the biggest stimulus package of all time (final sales, GDP, Durable Goods, and on and on)
The banking system only exists due to suspending accounting standards and putting them on govt life support via free discount window money
ECRI is ~-10, which has ALWAYS preceded a recession.
Credit is still contracting despite ZIRP
Individual stocks are still having flash crashes to $.00001 after the May 6 event (a 10% correction in one day!)
Mutual fund outflows are 50 billion for the year, retail has taken their ball and gone home
We are STILL shedding jobs
Debt to GDP is going parabolic with nothing to show for it
Consumer confidence is 68-69, avg for recoveries is 90, avg for recessions is 73
How big would the straw REALLY have to be to break this camels back?
Amen.
