Sigh. Ok let me explain to you what will put in an intermediate-term top (possibly long term but there's no way of knowing until you get to see what kind of support there is to be found down below)
Sorted from most likely to least likely, each of these individually should see at least a 10%-20% decline:
-Eurozone debt crisis. Do I even need to explain this? Portugal is at +7,5% which puts it in crisis territory. In fact if you base a prediction on precedent then you will find there is a 100% chance that Portugal will end up in trouble. Furthermore Spain, France and the UK have systemic risks also and the German consumer is getting fed up ith being stuck the bill. If the German consumer starts protesting against current regulations you can expect some volatility.
-PBoC loses control over the real estate market; as they are currently still in control there isn't all that much to worry about yet. However I Think the problem is widely understated. Like in Ireland (which doesn't matter), a very large percentage of homes is unoccupied and there is no intention to ever occupy them yet more is being built. Bubbles are basically when manias either overstate demand or supply. In this case supply is unrealistic. Whether China will be able to slow its growth down without severe penalties remains to be seen.
-Severely escalating ME conflict involving Israel or severe supply issues with oil. Watch prices, if CL starts to surge dramatically and stocks don't follow immediately you have yourself a risk-free short opportunity.
-US debt crisis; either massive defaults in muni-land, state-land or a congress that will start to bitch and moan over the debt ceiling or some other problem that I forgot.
All of these events are sort of in the "tail risk" category still, although I can't really imagine that Germany will continue to support the EU if stupid bitches like the Portuguese, Irish and Greece governments won't accept fiscal rules to prevent them from being retards in the future again, so this one may be bumped up a bit from tail risk to reasonably likely. Also I find it very likely that one of these will occur next to the possibility of a black swan event.
Then we also have some other problems concerning the inverse correlation between high optimism and high returns (not counting the AAII here, although you could, looking at other things). By now BTFD is a fucking meme. You're going to buy a market when to do so would be to follow an internet meme?
Still bearish, will continue to be so until I see some societal progress (note: don't care as much about unemployment and macro stats as I care about incentives which are still skewed towards taking stupid risks (TBTF) and thus the outcome should be the same as the last time these incentives were in place).
Sorted from most likely to least likely, each of these individually should see at least a 10%-20% decline:
-Eurozone debt crisis. Do I even need to explain this? Portugal is at +7,5% which puts it in crisis territory. In fact if you base a prediction on precedent then you will find there is a 100% chance that Portugal will end up in trouble. Furthermore Spain, France and the UK have systemic risks also and the German consumer is getting fed up ith being stuck the bill. If the German consumer starts protesting against current regulations you can expect some volatility.
-PBoC loses control over the real estate market; as they are currently still in control there isn't all that much to worry about yet. However I Think the problem is widely understated. Like in Ireland (which doesn't matter), a very large percentage of homes is unoccupied and there is no intention to ever occupy them yet more is being built. Bubbles are basically when manias either overstate demand or supply. In this case supply is unrealistic. Whether China will be able to slow its growth down without severe penalties remains to be seen.
-Severely escalating ME conflict involving Israel or severe supply issues with oil. Watch prices, if CL starts to surge dramatically and stocks don't follow immediately you have yourself a risk-free short opportunity.
-US debt crisis; either massive defaults in muni-land, state-land or a congress that will start to bitch and moan over the debt ceiling or some other problem that I forgot.
All of these events are sort of in the "tail risk" category still, although I can't really imagine that Germany will continue to support the EU if stupid bitches like the Portuguese, Irish and Greece governments won't accept fiscal rules to prevent them from being retards in the future again, so this one may be bumped up a bit from tail risk to reasonably likely. Also I find it very likely that one of these will occur next to the possibility of a black swan event.
Then we also have some other problems concerning the inverse correlation between high optimism and high returns (not counting the AAII here, although you could, looking at other things). By now BTFD is a fucking meme. You're going to buy a market when to do so would be to follow an internet meme?
Still bearish, will continue to be so until I see some societal progress (note: don't care as much about unemployment and macro stats as I care about incentives which are still skewed towards taking stupid risks (TBTF) and thus the outcome should be the same as the last time these incentives were in place).
