Everyone's Waiting For The October Collapse

businessinsider.com ^ | 7/7/09 | Joe Weisenthal

[Kartographer]

Old article, but its worth looking at the graphs which still matching the market last year before that collapse.

[screaminsunshine]

The Government fund runs out of money to prop it up in October.

[Joya]

Ping.

[mylife]

Heyup

[Deagle]

By my stocks, the market has not only already bit the dust, but has cleaned up after itself.. geez.... Only a million or so lost..

[sefarkas]

Withdrawing savings to pay for fall harvests, fall tuition bills -- and the reward for these payments are delayed until the crops are sold, or the college graduate starts helping to pull the wagon. In previous years when it was a very significant fraction of the total economy, automobile manufacturing retooling for the new model year contributed a similar conversion to cash at roughly the same fall time.

Holders of non-monetary assets (esp. stocks -- since everyone was told the best long term savings vehicle are common stocks) come to market at roughly the same time and have to convert assets to cash to make the payments ("30 days same as cash"). October happens to be the month when these conversions to cash occur without a strong off-set by new savings. The long term growth of the economy (both US and world) indicates that the fall phenomenon is a transient rather than a change in direction for economic growth.

Overall economic activity is more closely related to changes in the population cohort in the earning years (~20 to ~65 in America). The 70's baby bust is coinciding with the start of the WWII baby boom retirement. Note that this will have a steady effect on the need to convert assets to cash as the retirees begin to live off of the savings in stock and real-estate built over their earning years. Relief will come from the baby echo (started ~1990) entering their high earning years 25 to 40 years after they were born with coincident demands for housing, automobiles, etc.

[MeneMeneTekelUpharsin]

The market is NOT going to collapse this Fall. I am sick and tired of this constant hogwash reporting that “Oh my God! We’re going to have economic collapse!” It’s not going to happen. Somehow the government is going to prop things up. They’ve been doing it for the past five years (somehow) and will continue doing it.

[kingpins10]

Anyone who is in American equities should be selling out now. The only reason the market is this high is mark-to-market shenanigans.

[Tolsti2]

I dunno, it might go down some, but it’s not going to just fall apart. Actually, once the news starts predicting doom and gloom too much, it’ll usually pick up shortly.

If obamacare/cap and tax die off, we might just well recover pretty nicely in the next few years actually.

[screaminsunshine]

Maybe the same trick they are using on selling bonds. They sell them and ten days later buy them back for more money.

[cowtowney]

Keep believing the government is going to rescue you
For goodness sakes, they created this mess.

[blam]

"Somehow the government is going to prop things up. They’ve been doing it for the past five years (somehow) and will continue doing it."

Sunday Lesson: Why "Normal" WILL NOT Return

[snip]

Here's the underlying problem: Bernanke and the Government are throwing literally $250 billion a quarter down the toilet simply trying to prevent an all-on deflationary collapse.

Unfortunately that "prevention" only works so long as the $250 billion a quarter can continue to be spent - more than $1 trillion a year in annual deficit that must be continually added by borrowing from the Chinese and Japanese EACH AND EVERY QUARTER or THE SYSTEM WILL GO RIGHT BACK INTO COLLAPSE.

How long can this continue?

Not all that much longer - and if the direction does not change before our rope runs out we face a future far worse than we did last fall had we done nothing.

[Misterioso]

They’ve been doing it for the past five years (somehow) and will continue doing it.

This, of course, is only your prayer. Some of us are unbelievers.

[blam]

An Avalanche of Insider Stock Selling

Thursday, August 13, 2009

What's the "message" of the market here? Over the last two weeks corporate insiders have dumped over $2.1 billion in stock vs. $73.1 million in buys. I'm not sure I've ever seen the ratio of insider sells vs. buys this skewed toward officers and directors looking for the exit door. Talk about the captain jumping into the lifeboat and speeding away before the ship sinks....

Given that the trailing, "as reported" price/earnings ratio is now 144, or substantially above the peak p/e ratio on the Nasdaq at the top of the tech bubble, what is the market trying to tell us?

Think about that when you call up your financial advisor or broker and tell him you want get out of the stock market.

[The Magical Mischief Tour]

I still don’t get this whole economic prediction scheme, our economy is such a vast, huge and complex animal.

I think these folks are in a dark room somewhere throwing chicken bones on the floor...

[dalereed]

“Somehow the government is going to prop things up”

They need to be in prison for doing it!!!!

[CharlesWayneCT]

So why haven’t all the people sold already? And why isn’t the market already tanked?

Or a better question — what are you going to do with your millions of dollars in November?

After all, I’m sure you are putting up a ton of money on this sure bet, and will make a killing.

[eyedigress]

Watch for the Gold bump The 2nd week of Oct.

[dalereed]

“Stocks are normally a buy when the P&E ratio is below 10”.

I was taught in college in 1955 that 7 times earnings was an investment anf 10 times earningws was speculation.

Since I signed my first labor contract in the early 60s that included health and pension I vowed never to mess in the stock market since the pension and health funds which would have to be invested every month would totally scew the market and they would be so hugh that they could totally manipulate it.

[eyedigress]

I’m up 18.7 and it seems steady.