Fear of 'Catastrophic' Crash Rising Despite Bull Market

CNBC ^ | 02/18/2011 | CNBC

[The Magical Mischief Tour]

In an unprecedented move, the number of investors fearing a catastrophic stock market crash is rising even with the stock market at 2 ½ year highs.

The unusual dislocation comes from two distinct reasons: a lack of trust in the U.S. financial markets following the so-called Flash Crash last May and the collapse of Lehman Brothers in 2007.

This means the Flash Crash Advisory Commission that met on Friday has a long way to go in restoring confidence to the point that will bring the individual investor back into a market still ruled by high frequency trading, exchange-traded funds and leveraged hedge funds.

The Yale School of Management since 1989 has asked wealthy individual investors monthly to give the “probability of a catastrophic stock market crash in the U.S. in the next six months.”

[Bean Counter]

yah, well hold this thought: This summer the Federal Reserve is going to have to discontinue QE-2, and from that point to the end of the year we will get a peek at the true condition of the American economy.

It will be like kicking the crutches from a guy not with casts on his legs, but with the legs amputated above the knee...

[FromLori]

Thank you for the ping. I think banana ben has tied himself not only to the Feds member banks but to obama and a lot of people are beginning to realize this will end badly.

Everything is “Fine” In The Game of Perpetual Bailout

http://wealthcycles.com/blog/2011/02/17/the-fed-and-us-government-choose-isolvency-and-perpetual-bailout

Politics of Inflation

http://www.merkfunds.com/merk-perspective/insights/2011-02-16.html

A Reader’s Letter To Ben Bernanke

http://www.zerohedge.com/article/readers-letter-ben-bernanke

Where’s the wall of worry?
Commentary: Bullishness has recently become dangerously high

http://www.marketwatch.com/story/bullish-sentiment-is-high-maybe-too-high-2011-02-15

THE BERNANKE PUT AND INSTABILITY IN COMMODITY MARKETS

http://pragcap.com/the-bernanke-put-and-instability-in-commodity-markets

Investors See Pullback Coming But Still Buy Stocks

http://www.cnbc.com/id/41665565

[SE Mom]

Thanks for the links- excellent references!

[servantboy777]

>>How can it be going up on such awful news?<<

Steady cash infusions by the fed. QE2....maybe QE3 coming soon.

[LiveFreeOrDie2001]

I’m loking for alternative investing ideas...

Also, stock up on “needs” follow the emergency preparedness lists.

[Marty62]

Would you happen to have a link to a list. I think about it but there must be someone that has already put one together.

[servantboy777]

>>US corporations are making healthy and sustained profits.<<

On downwardly revised estimates and earnings for the past two years. Two, sometimes three downward revisions over the last several quarters. Not impressive.

>>Nobody sits on cash at that level.<<

This is not a true statement. My corporation now holds close to twenty billion in cash reserves since the recession began and many corps have followed suit.

The one thing that is true regarding your post is corporations are launching stock buy backs to prop up the share prices.

Earnings are not enough to buoy share prices.

Also, Quantitative Easing 2 from Uncle Sugar has the markets ticking up since last September...not earnings.

[phockthis]

sfl

[spyone]

With all respect, you should read post 6 by lucky american. He/she is correct, you are dead wrong.

[GnuHere]

Appreciate it.

[LiveFreeOrDie2001]

Yes!

Here you go. Scroll down & there’s tons of links on the left...

http://ferfal.blogspot.com/2011/01/economic-collapse-preparedness-what-to.html

[Walleye_Walter]

"In the latest survey in December, almost 75 percent of respondents gave it at least a 10 percent chance of happening. That’s up from 68 percent who gave it a 10 percent probability last April, just before the events of May 6, 2010."

OK, so 75% (up from 68%) of high net worth individuals think there is a 10% or greater chance that there will be 'Catastrophic' stock market crash in the next 6 months.

Isn't that the same as saying 75% of high net worth indivuals think there is nearly a 90% that there will NOT be a 'Catastrophic' stock market crash?

[Marty62]

Well THAT’S just great. We are *(&*^&$%&^$&*^

[mewzilla]

On a related note (ha ha, from earlier this month....

UPDATE 1-NY Fed names MF Global, SocGen as primary dealers

[SeattleBruce]

“How can it be going up on such awful news? That alone makes it suspect. I think it is a big scam.”

The stock market is currently controlled by the high frequency trading of 3 or 4 banks with JP Morgan being the king of that hill. People have made some money these last 6 months, but have you seen the percolating world, and now US inflation rate? If the FED weren’t doing QE2 - permanent open market operations (POMO) - of $600 Billion in 6 months - where would the market go (naturally), and since the FED can’t go on forever with QE - where will the markets eventually settle naturally.

Problem is the FED can go on for a quite a while longer and the longer they pour money into the economy the more you’ll see all currencied drop in value relative to commodities (which is why we’re seeing the hot price rises in food and other commodities around the world.) Of course the stock market has gone up in these conditions - it’s dollar based - and the dollar, and all currencies are dropping in value. So this may also continue due to bamster’s re-election hopes among the ‘powers that be.’

Paul Ryan’s questions recently of Ben Bernacke are telling - ‘aren’t you trying to monetize away the government debt?’

I think Bernacke and the other bankers are complete frauds and liars and we need to oppose the Fed and the Federal Reserve Act NOW.

Who’s with me?
I recommend these sites about the topics above:
http://economicedge.blogspot.com/
http://www.marketoracle.co.uk/

[SeattleBruce]

“Steady cash infusions by the fed. QE2....maybe QE3 coming soon.”

They will destroy the dollar - and all in the name of power and profits. They care not for us. And guess what, at some point, those who don’t control the markets and the money supply WILL GET destroyed - they will pick off the remaining meat from the middle class carcass.

Time for us to repeal the Federal Reserve Act and take back our money.

[oneaglewings]

Attached from an email received -
What happens when the American dollar is no longer the reserve currency for the world - which he shows is happening already.

Very interesting and scary. Hope he is wrong.

http://www.stansberryresearch.com/pro/1011PSIENDVD/LPSIM206/PR

[LomanBill]

>>The stock market is being run by computers.

Computers don't do jack squat without software...  and the machines on Wall Street are performing according per some specification... that moral craftsmen SHOULD be refusing to code and implement --- But....

LomanBill:  "So you mean at the level of the hardware / software being used to do wire-transfers, the separation between Ameriquest and Argent Mortgage is nothing but an illusion manufactured to prop up a facade of compliance with the attorney's general agreement?"

East Asian Contract "Guest" worker:  "ha ha ha, yeah but nobody knows that!"

LomanBill:  "Ha ha ha?  It's not your country that's being raped, is it, A$$hole?"

It is incumbent upon the honorable craftsman to be aware
of whether or not his services are being used
as a means to accomplish evil ends -
and to act (or NOT) accordingly.

[LomanBill]

[Because the Federal Reserve is depositing 6-8 Billion dollars of cash in big bank trading accounts most days.]

Exactomundo!

http://www.zerohedge.com/search/node/POMO

[LomanBill]

[we just finished Q4 earnings season—US corporations are making healthy and sustained profits.]

LOL.

And in other news, the chocolate ration will be raised from 45 to 28 grams per week....

Got POMO, homo?

http://www.zerohedge.com/search/node/POMO