Posted on 02/06/2018 5:12:14 AM PST by Wolfie
Is This The Crash?
Almost-certainly not.
First, it is extremely unlikely for a market to crash from a spike high. China is the only place where it has happened with any sort of regularity; what usually comes first is a distribution pattern. But..... with that said it isn't impossible.
However, as of 2/5 the S&P is now back to the 50DMA, which it has not touched for quite some time -- it bounced, and then collapsed. Of note the 200DMA is down around 2530, which would be back to about November 2017 levels and extraordinary in terms of the current extension.
More to the point the "high flyers" like Amazon, Apple, Facesucker and Netfux, have hardly been dented at all, if at all, right up until it all went to crap.What had been falling apart is everything else. GE has been schmammered over the last few months, for example.
But with that said it would be a real good idea to pay attention.
Systemic leverage in the form of financial assets to the real economy, along with margin debt and price:sales or price:free cash flow ratios are at levels either consistent with former bull market peaks and in some cases at all-time highs, higher than in 1929 for example! Financial assets -- stocks, basically -- are now at levels never before recorded in terms of their size in relationship to the overall economy.
This is what everyone gets for cheering on and allowing The Fed and Congress to run trillion dollar deficits for years, not count inflation in asset prices as "inflation", run effective negative interest rates and pin the short end at zero well beyond the end of 2009, never mind the outrageous fraud that marked the end of the selloff in the spring of '09 when Congress mandated that FASB change accounting standards to make fraud on bank balance sheets not only legal but mandatory. I reported on it at the time and instead of pitchforks and torches what you did was cheer.
It's also what you get for allowing pindick Trump to play Rocketman with the stock market, cheering the fraud on, including HFT and spoofing, literally from election day forward.
It's what we all get, in short, for arrogance and this nation is going to pay for it.
Not today, probably, but you are going to pay, because what just happened has broken things. Critical things. You won't be told what and where either, because you sat on your fat asses and cheered while the frauds continued in the banking system from 2009 forward instead of demanding heads on plates and as a result there is no fear among regulators, banksters or politicians who lie to you.
Just like in 2007, when the underlying breakage happened in the spring, and yet it was a year and change later before it all went to crap, there will be a delay this time too because there will be more lies, more fraud and more coverups. It will continue until it can't, but trust me on this -- it can't, just like it didn't last time.
Eventually the rot will overwhelm and cascading losses will trigger more losses; leverage is a nightmare when it goes bad on you, and the premise that The Fed will always stand up to stop any sort of selloff with the words out of their mouths or cost-shifting government programs to the people through stealth tax increases by monetizing debt is a very convenient chimera, one that has been "right" for quite some time and has led people to double down on asset price gains as they have occurred, further increasing leverage.
Oh, and if you want another example BitCON is now down around 6,500 which marks nearly a 66% loss over a very short period of time.
Those who think that can't happen with the stock market are full of crap.
It both can and has several times, including in 2008/09 and the leverage ratios now in the market are materially higher than they were then. Yes, even after yesterday.
Again, 2007 started exactly like this, with the Asian selloff. We got a reactionary move, but nowhere near as much. Then we got the "subprime is contained" nonsense when some of that forced de-leveraging went through the system. The media and brokerage mavens all told you that everything was just fine, just like today, and the market did indeed bounce strongly -- for a while.
Does anyone remember what came next?
The fed said they had a hand in starting the great depression. The fed and other globalists hate our duly elected President and are taking vengeance out us and doing all they can to make Trump look bad.
I’m about as doom and gloom as they get, and even I don’t think this is “the” crash.
Which means it probably is. :-p
It’s not about “point drop,” it’s about percentages, so not a record-setter. This correction just set us back to what it was last November. Relax, everybody, and find some bargains.
Bit coin down to $6500?
It wasn’t that long ago it broke over $1000.
So far this is just froth offf the top.
No. This was most likely due to "algorithm trading" and stop loss orders placed by recent entrants into the bull market.
The market will recover quickly.
I don't thinks so. But, it is one helluva bump in the road!
What came next was a double top. Denn. even admits it at the beginning of his article. When I see fundamental assets crumbling like the 2007 housing bubble bursting and a double top, then I will worry. That's probably 10 years im the future.
Karl Denniger has inflated ego issues.
Or, maybe not.
There is a famous story about Joe Kennedy, patriarch of the Kennedy clan. He was a Wall Street tycoon. On leaving his office in 1929 he overheard a shoeshine boy tell his customer that he’d just bought a share in the Hup Motor company. Kennedy turned around, reopened his office and sold everything he owned. He said later, “We all knew we were in a bubble. I realized that if the hype had gotten to the point where a shoeshine boy was playing in the market the bubble had burst.” Shortly after that the market cratered.
We are nowhere near the level of hysteria that I saw in the tech bubble and later in the real-estate bubble. Some things will, of course crater. Byte coin, for example. The market is not just one thing. It is thousands of things. Occasionally, from low Earth orbit, they appear to be going in the same direction. But that is rarely true. The market, like hemlines, will go up and down with no rhyme or reason.
Look instead to hiring. If companies are hiring, and I can see even locally that this is true, then things are fine.
“pindick” Trump? Just another liberal horses ass with Trumpfobia.
Personally, I believe this was the beginning:
http://www.freerepublic.com/focus/f-chat/1994684/posts
The meeting gave us QE. And I learned about a year ago that at least two attendees called their wife and told them to get as much out of cash machines that they could because they may not be able to on Monday.
Basically they kicked the can further down the road and have been ever since. Personally I think this is bigger than trump or our government. Yes, I expect it to result in “the” crash, but don’t think this is it, yet.
For some historical perspective, everyone knows about the crash of October 1929. Most people don’t know that 1932 was when the REAL crash happened.
So, sure, we’re in a world of hurt and this may be “it”, but it’s probably not.
This sums the whole thing up:
https://www.youtube.com/watch?v=TlN28DoL5qA
This is not “the crash”. While the volatility is being taken out of the market, the underlying momentum of the growing industrial revival of the American infrastructure and the growing enthusiasm and confidence of newly re-employed people, including many who had been out of the job market for months or even years, and the return of vast amounts of capital that had escaped our shores, are just now starting to show their effect.
Through the substitution of natural gas for many of the uses of petroleum, and the singular revival of the use of coal as an energy source, those factors may soon result in America once again being a net exporter of energy to the REST of the world.
Now, if the regulatory agencies would just get over their superstitious fears on nuclear power, and permit, on an expedited basis, the development and adoption of Thorium fueled Molten Salt nuclear reactors, we may yet see a true development of the real potential of electric power.
After all, one point two one jigawatts of electrical power was enough to propel a DeLorean forward and backward through time.
(by the way, where are the flying cars? They were supposed to be available four years ago....)
Trump should fire the new Fed chairman. The market crashed on his first day.
Poor kid didn't pick a very good stock. Hupp was already in decline and would go out of business a decade later.
Hey, the new guy hadn’t figured out how to wash Fed money through foreign government securities through to the stock market.
He will learn, though. :-)
This chart will help him figure it out—we Freepers are always there when you need us!:
http://ticdata.treasury.gov/Publish/mfh.txt
....pindick Trump????
No thanks, Karl.
Those who want to call it a crash will call it a crash. Or a correction. It all depends on what they think of the current president.
Someone manipulated the market. Michael Savage says it’s because of what Yellen said on her way out - and that she raised interest rates. (Savings and T bills more advantageous, money moves from stock market.)
I suspect there are other forces in action that have come into play at the exact moment of the SOTU, to make it come down.
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