Warning: Stocks Will Collapse by 50%

Rev, are you posting this because you believe it will happen? Or because you want to start a discussion?

 

Anyone who can accurately foresee the market crashing will make millions, possibly billions. And it's possible that anyone creating mass hysteria about a crash is hoping to cause an influx of short sells, driving his own stocks up at the cost of those who fell prey to his hysteria.



Bottom line - just play the market, not what others say about the market.

 

"Faber doesn’t hesitate to put the blame squarely on President Obama’s big-government policies and the Federal Reserve’s risky low-rate policies"

Here's the sentence that tells us this is propaganda.

1. Obama is a puppet of the banksters. It's their big government policies he's pushing.

2. The Federal reserve is now and always has been a racket set up by the private banksters to rob us of our wealth so we shouldn't be surprised when they succeed.

In other words Faber wants us to go on blaming the "other political party" instead of the real culprits.

The private international banksters and their wealth extraction racket called the "Federal Reserve".

 

These bears and nay-sayers can sit on the sidelines and miss out on one of the best run-ups in stock market history. Of course there will be corrections now and again. But to say we are headed for a 50% crash because we are in a "financial asset bubble" (whatever that means) is silly. It's silly because earnings are what drive the stock market and earnings have been generally good for the past 5 years.

There is a slew of earnings coming out this week from some heavy hitters--Apple, the world's largest company based on market capitalization just reported a 23% rise in earnings. British Petroleum, Ford, Pfizer, Kraft come out tomorrow. Then Mastercard, Exxon-Mobil, Chevron later this week.

A 50% drop would be the 2nd largest plunge after the Great Depression. The US economy is not in the kind of shape that would allow a 50% drop in the stock market.

 

Lots of very smart people tell us the signs all point to a crash. There are really only 2 questions...

When and how bad?

Most are predicting worse than 2008.

 

Lots? Like whom?

What signs?

What is a "financial asset bubble"?

 

I agree with ITL.

Besides, if they did fall by 50%, there could be some deals to be had by smart money.

 

The Death of Money: The Coming Collapse of the International Monetary System, James Rickards.

http://www.amazon.com/dp/1591846706...vptwo=&hvqmt=b&hvdev=c&ref=pd_sl_7wicde893w_b

I heard Rand Paul quoting Rickards in one of his speeches.

Definition of Asset Bubble:
http://lexicon.ft.com/Term?term=asset-bubble

HankD

 

That's only one person and he's predicting the collapse of the international monetary system, not the US stock market. If the international monetary system were to collapse it would, of course, take the US stock market with it.

The subject of the OP was a US stock market collapse caused by a "financial asset bubble", Obama's policies and the Fed's low interest rate program.

From the definition:
When the prices of securities or other assets rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals

That's just it--the fundamentals are supporting the rise of the stock market. Strong earnings, healthy corporate balance sheets, the rebound in the housing market, the slow but steady increase in hiring. Not only that, but the Dow had dropped to below 7,000 points in the recession. So there was nowhere else to go but up.

 

This OP reminds me of a fellow, can't remember his name, who called one right back in the 80's. They after the stock market recovered he started predicting a huge bear market. Even as the market climbed he continued his dire predictions. End result was he lost all the money he had gained and ended up with a bankrupt mutual fund he managed.

There are always prophets of doom. Occasionally they are right. Most of the time they are wrong.

Rule, number 1 in investing. Do your own research and make your own decisions. Never rely on the advice or prophecy of an individual.

And remember:

Bulls can make money
Bears can make money
But hogs will lose money every time.

 

There's people on BB that predicted a while back that the Dow would be at 6,000 by now. I'm sure if I were to search the archives from 2008-2009 I would find predictions of rioting in the streets, famine, and martial law, etc.

 

I was giving an example of a typical doomsdayer, he is not alone.
Most if not all of them say there will also be a world economic disaster caused by the dollar collapse (or devaluation).

Presently the dollar is still the world unit of currency but its reputation is eroding because we won't shut down the printing presses and now have a debt of 13 trillion Federal Reserve Notes (oops, I meant dollars).

And I'm not saying I believe the next adjustment will end us as a nation particularly when I have read that the present administration is eyeballing 401K's, IRA's, Keogh's and other IRS approved retirement funds in order to rob them by requiring a conversion to T-Bills (a certain per cent of the securities).

With all the monopoly money flooding the global monetary system something HAS TO GIVE sooner or later.

Could we deflate the balloon slowly rather than with a POP?
Yes, but I don't think it will happen no matter who takes over the white house.

A diversity of gold, silver and even copper is a personal hedge.

The "fundamentals" are fickle. Look at what happened to Detroit and what will probably happen to Baltimore, especially if this riot plague spreads to other cities. Confidence is a key word in the theory of the "fundamentals".

If martial law is declared the fundamentals and confidence of our stability as a nation will go down the toilet, first locally and then nationally and then globally.

My opinion of course.

HankD

 

Marc Faber, Peter Schiff, Donald Trump, and Robert Wiedemer.Paul Solman, Terence Burnham, David Stockman and others:

#1 Bill Fleckenstein: “They are trying to make the stock market go up and drag the economy along with it. It’s not going to work. There’s going to be a big accident. When people realize that it’s all a charade, the dollar will tank, the stock market will tank, and hopefully bond markets will tank. Gold will rally in that period of time because it’s done what it’s done because people have assumed complete infallibility on the part of the central bankers.”

#2 John Ficenec: “In the US, Professor Robert Shiller’s cyclically adjusted price earnings ratio – or Shiller CAPE – for the S&P 500 is currently at 27.2, some 64pc above the historic average of 16.6. On only three occasions since 1882 has it been higher – in 1929, 2000 and 2007.”

#3 Ambrose Evans-Pritchard, one of the most respected economic journalists on the entire planet: “The eurozone will be in deflation by February, forlornly trying to ignite its damp wood by rubbing stones. Real interest rates will ratchet higher. The debt load will continue to rise at a faster pace than nominal GDP across Club Med. The region will sink deeper into a compound interest trap.”

#4 The Jerome Levy Forecasting Center, which correctly predicted the bursting of the subprime mortgage bubble in 2007: “Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn.”

#5 Paul Craig Roberts: “At any time the Western house of cards could collapse. It (the financial system) is a house of cards. There are no economic fundamentals that support stock prices — the Dow Jones. There are no economic fundamentals that support the strong dollar…”

#6 David Tice: “I have the same kind of feel in ’98 and ’99; also ’05 and ’06. This is going to end badly. I have every confidence in the world.”

#7 Liz Capo McCormick and Susanne Walker: “Get ready for a disastrous year for U.S. government bonds. That’s the message forecasters on Wall Street are sending.”

#8 Phoenix Capital Research: “Just about everything will be hit as well. Most of the ‘recovery’ of the last five years has been fueled by cheap borrowed Dollars. Now that the US Dollar has broken out of a multi-year range, you’re going to see more and more ‘risk assets’ (read: projects or investments fueled by borrowed Dollars) blow up. Oil is just the beginning, not a standalone story.

If things really pick up steam, there’s over $9 TRILLION worth of potential explosions waiting in the wings. Imagine if the entire economies of both Germany and Japan exploded and you’ve got a decent idea of the size of the potential impact on the financial system.”

#9 Rob Kirby: “What this breakdown in the crude oil price is going to spawn another financial crisis. It will be tied to the junk debt that has been issued to finance the shale oil plays in North America. It is reported to be in the area of half a trillion dollars worth of junk debt that is held largely on the books of large financial institutions in the western world. When these bonds start to fail, they will jeopardize the future of these financial institutions. I do believe that will be the signal for the Fed to come riding to the rescue with QE4. I also think QE4 is likely going to be accompanied by bank bail-ins because we all know all western world countries have adopted bail-in legislation in their most recent budgets. The financial elites are engineering the excuse for their next round of money printing . . . and they will be confiscating money out of savings accounts and pension accounts. That’s what I think is coming in the very near future.”

#10 John Ing: “The 2008 collapse was just a dress rehearsal compared to what the world is going to face this time around. This time we have governments which are even more highly leveraged than the private sector was.

So this time the collapse will be on a scale that is many magnitudes greater than what the world witnessed in 2008.”

#11 Gerald Celente: “What does the word confidence mean? Break it down. In

 

Thanks, Carpro.