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?
I saw a video on the internet of a Eagles fan who claimed to have cashed in his 401K to go to the Superbowl. Now he looks like a genius for selling at the peak. And the Eagles won.
“Pin Dick Trump”?
Dangerous, Trump just might call a presser to expose himself to prove he’s not.
General:
I believe you have well spoken. I have heard before, “the economy is sound, the fundamentals are good”. We did not move into the shoeshine boy hysteria.
What is not considered by most angry people like Denn. is that the economy has been artificially penned up for nearly a decade. QE did raise the market but the growth was lackluster not based on much but moving fake money into the market. That dried up for nearly two years before the election when we saw our gains go to just about nothing. Before that much of the gain was just the very long recovery from 2008.
My concern about hiring is that there are not enough qualified youngsters to hire. Competition for these youngsters will cause wage inflation. Some of it because there has been so little wage growth for so many years.
Well said I think and I throw in yet another positive vote for Thorium which could change the future more than just about anything else for the nation that leads the way in this energy source.
You asked what happened to flying cars? That promise has been around for all of my seven decades.
I’ll ask, what became of the glowing outlook of not much more than a week ago? Has the outlook for the economy changed? Are people not going back to work? Are wages not rising? Is capital not coming back to the country? Are corporations large and small not looking forward to a windfall of tax reduction making us competitive with the rest of the world on that basis alone? Is that windfall going to be spent on improvements, dividends and stock buy backs? Something has to happen to it. Shareholders will demand that it not just sit in the treasury.
What has changed in the last week to cause this reduction in confidence in the market? Why did it take place the very week of the FISA memo, the DACA defeat, Yellen’s remarks, etc.?
I have never believed in coincidence. All things happen for real or created reasons.
Nothing happens by coincidence does it?
See my post #24 on this thread.
This clown is a 2 time Obozo voter and undoubtedly a Hitlery voter.
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