April 11, 2006

Anyone feel like a good crash?


OK, with any bold prediction, you can look the fool when it doesn't happen (the world is ending people, the Cubs will win the world series, etc)

But I'll make one now

The stock market is about to crash.

Why?

Housing bubble has popped

Consumer is done
Gold vaults past $600
Failed US Presidency
Iran goes nuts
Iraq mess
Oil getting crazy again
We're due for a good one

Anyone with me, or am I nuts?

44 comments:

moman said...

I think this is too much doom and gloom. Gold and the stock market will become the investment vehicle of choice again as housing deflates.

Do not forget that the world is awash in savings; maybe not the US but the Asian countries and central Europe are saving TOO MUCH. The economic conundrum with savings is that too high of savings reduces consumption which reduces economic growth which in turn reduces ability to save.

I expect the DOW will bust through 12,000 this year on it's way to 15,000 by 2010. Housing will create a drag on the economy but do not count the consumer out yet. There are still plenty of 401Ks to drain, SUV's to sell for pennies on the dollar, and willing lenders ready to loan to keep the consumption train going.

moman said...

Forgot to add to above-------

The rise in gas prices may in turn fuel consumption. HOW? As people decide that driving a gas hog SUV 30 miles each way to work is stupid (well DUH) they will be buying new cars (consumption) and possibly decide to move closer to towns, buying new houses and condos (consumption) and each time one moves there is redecorating (consumption).

The alternate is to stay in the exurbs and batten down the hatches and not spend which we know isn't possible because there is always one thrifty neighbor who won't be affected by gas prices and will be out spending prompting the rest of the "keeping up with the Jones' crowd" to do the same....

panicearly said...

"Do not forget that the world is awash in savings; maybe not the US but the Asian countries and central Europe are saving TOO MUCH"

asians in general dont think they are ever saving too much. It seems $50 is too much to save for americans these days. Dont count on asians spending it up, if the world becomes more volatile they will
put away even more.

Most asian economies are not consumption based for more than 45% of gnp, when exports decline they will retrench. who would spend to prop up the economy? maybe americans but not asians.

skytrekker said...

Doom and gloom? Too many Americans suffer from 'economic insecurity' which has been brought on by the extreme 'corpotate state' and 1920s and guilded age economic policies of the 25-30 years.

Housing is very overpriced in 40% of the country- oil is near 70 bucks a barrel, record debt, soaring healthcare costs- (Many Americans employed cannot even get healthcare-let alone save for a pension) And I may add to that an aging population--

Plus the unknown consequences of global warming. The last two posts reflect the views of Rush Limbaugh and David Lereah- sadly to say the truth may be much more grim- and not gloom and doom.

As for dow 15000 by 2010- consider half that if we are lucky.

Anonymous said...

If all speculative bubbles are held up by human psychology, how is the stock market any more immune to crashing than the real estate market? If the general mood of the population is turning negative, then it would seem that this would affect all markets....

Anonymous said...

I agree, the one thing that makes this totally even more scarier than the Great Depression when 30% wanted communism, another 30% wanted fascism in this country and FDR kept it going as a democracy is that we have a religious fundamentalist end of timer president.

And just like Jim Jones in Guyana, he thinks every one has to drink his cool aid, to usher his deluded vision of the end. And this goes too for Iran where the other religious fruitcake is acting up too.

So even though the real issues, balance of trade ,defecit, economy being hollowed out by cheap everything made in a communist police state. They are bad problems but can be solved with intelligence and reasoning, something that our great leaders don't know shit about, because they have the funny baloney so called bible so far up their asses.

silverisgood said...

With all due respect moman, one can not consume when one has no cash to consume with. And when all those ARMS ajust in september WHEW! good luck to you!

panicearly said...

i didnt get that Rush Limbaugh reference.

anyway i think it`s grim with a grin:)

moman said...

Silverisgood: I catch your drift. We are heading towards some serious problems but I do not believe this is the end of free-market capitalism.

For people to have nothing to consume with (Money) there would have to be no jobs. Some people (possibly many) will lose their houses but there are others who have savings to prop up the economy, buy these houses, and rent them out to former owners. In effect, the consumption of today, at worse case, will create a whole new "slave class" of over-consumers who have to spend the remainder of their lives working in deplorable conditions to pay for their past mistakes.

The rich people in this country have too much to lose to let the whole shabang go to hell.

I fully expect a gov't bailout to protect the dollar and "full faith and credit of the United States". All these people who are driving Suburbans and living in McMansions will be spared the full wrath of their gluttony by the hard workers (i.e. the rest of us) who prefer to live within our means. I would say that our kids will learn from our mistakes but it's the boomers who are dooming it for us who didn't learn from their parents.

Don't forget that China has a ve$ted interest in keeping the American consumers as 'consumerist slaves', at least for the time being until they develop a full middle class.

Anonymous said...

All politics aside, we are long overdue for a correction/crash to wipe out the excesses of leveraged debt built up over the past decade. But the tinkerers at the Federal Reserve have a plan to "help" us avoid this bitter medicine. Check around and you'll see numerous rumors about lots of overtime at the Bureau of Engraving apparently to print huge sums ($1-2 trillion) of paper money. That amount of cash could be used for many purposes, or it could be shoveled into a furnace and never see the light of day.

I suppose we all will know soon enough...

brokersleaveyoubroke said...

Here is a good indicator that the end is near, Donald Trump is starting his own mortgage company.

http://www.freep.com/apps/pbcs.dll/article?AID=/20060409/BUSINESS04/604090361/1017/BUSINESS

brokersleaveyoubroke said...

Do not forget that the world is awash in savings;

That myth has been thoroughly debunked over and over. In reality the world is awash in fiat money created by the world's central banks. The excess liquidity will cause hyperinflation unless interest rates rise quickly, which will cause a recession. The conundrum is history, long term interest rates are on the rise.

silverisgood said...

I was sitting on the can trying to think through how me as an individual can respond to MY government's use of nuclear weapons.
I would think business leaders are shocked by this notion, the consequences to the economy are completely unpredictable.

So, myself as an individual, can find a way to respond. Can't not pay my taxes they get deducted, can't not file, would throw away my refund(clever scheme there)

ahhhh, don't pay my mortgage and we can collectively do this. That will bring the economy to it's knees, I say probably 10-15% would overwhelm the system, liquidity would crash. Maybe we, the progressive community could start a petition, pledge if you will, to not pay our mortgages should the President order the use of nuclear weapons in a pre-emptive manner will the backing of the congress or the will of the American people.

How's them bannanas!!!!!!!!!!!!!!!!!

silverisgood said...

Not to turn this int a politicle arena again but the headlins state I ran has processed the uranium, and so that fool in office will respond, som ea re saying in 2 weeks or less with congress on vacation and the easter weekend...falls right into the neocon agenda...personal view of course...scary non the less...kiss your children folks the 4 ace'es are losng aginst the full house!

scary indeed

brokersleaveyoubroke said...

Check around and you'll see numerous rumors about lots of overtime at the Bureau of Engraving apparently to print huge sums ($1-2 trillion) of paper money

Rumor is all that is. The fed can create billions of dollars with a few key strokes. Most money only exists as notations on an electronic balance sheet. Printed money only counts for a small percentage of all daily transactions. In theory you are probably right in that the fed is going to create a lot of new money. Now that the fed has decided to stop publishing figures on how much money is in circulation I doubt they are trying to hide "good" news.

Anonymous said...

Silverisgood - What did you say when Billy Clinton sent the B-2s to Guam in '94 loaded with nukear wupons intended to defang Kim Jong Il?

Thought so.

silverisgood said...

Thought so

Let me respond before you answer for me.

1. It is obvious you are in bed with bush from your tone!

2. Kim Jong Il was and the koreans are still an actual threat to the region, and no one seems to think that, or are blind because of the middle east abortion.

3. Anything with a nuclear warhead mounted and ready to fire off in my book is very disturbing to say the least.

and other than the great blow job Billy recived in the white house, I think all round clinton was a decent president, sure was he corrupt dam strait he was as was all the repubs, and your republican friends exposed all his doings. demo/ repub there is no difference.

Unlike your love fest for that asswhole in office all the secrets and corruption is blatant and beyond what you and I can comprehend. but that is ok, I would have rather bush say he had sex with rumsfeld than the shit that is going on now.

Anonymous said...

FDR also gave us our great Social inSecurity system that will collapse within 20 years, taking all your contributions with it.

He also attempted the biggest power-grab in American history by trying to expand the Supreme Court to 15 members when they ruled a few a his programs unconstitutional. That is the tactic that Robert Mugabe used in Zimbabwe and Hugo Chavez in Venezuela to consolidate supreme power.

He signed Eastern Europe and its 200 million citizens over to the Stalinist dictatorship at Yalta despite Winston Churchill's objections.

FDR's admin dropped the ball on the Pearl Harbor attack the same way that the Bush admin dropped the ball on the 9-11 attacks.

veritas_faust said...

Your nuts...but it doesn't mean your wrong!

FIgure about 20% of the doom and gloom is real. The rest is just added drama.

But remember it can get worse...it CAN ALWAYS get worse.

Anonymous said...

"It is obvious you are in bed with bush from your tone!"

Yeah, I held my nose and voted for him mainly because the Dems running against him were even bigger head cases. I did not agree with the decision to invade Iraq, even though 98% of Congress supported it at the time.

Which brings us back to the hypocricy now spewing from Dem leaders and the faithful as they ignore the past and try to derail Bush. When Bubba Clinton was President, they were all for carpet bombing Yugoslavia, nuking North Korea if necessary, and yes, even getting rid of that terrible WMD-totin' fellow, Saddam Hussein.

As for your statement "Anything with a nuclear warhead mounted and ready to fire off in my book is very disturbing to say the least", I say great! That's the effect these _strategic_ weapons are supposed to have on people, and when that line of thought occurs in the mind of a potential adversary, something called "deterrence" occurs.

So maybe all this talk about nuking Iran is part of the game, no? Just like Bubba Clinton's little foil back in '94 when he moved those B-1s and B-2s loaded with nuclear bombs to Guam and threatened to shove 'em up Kim Jong Il's puckered a*shole. Looks like it might have worked.

skytrekker said...

panic early

I was referring to MOMAN- not you :-)

skytrekker said...

Economid history will show that FDR was actually conservative and saved the free enterprise system- when first elected he made no serious reforms and for the most part hoped the free markets would solve everything- he made no bold moves- any more the Hoover had. When the economy failed to show any improvement by 1935- and under increasing attacks from the left - he then also moved to the left. Taxed the rich and corporations and started social security. Yes the country could have move to fascism or communism- but under FDR's moderate leadership and some progressive reforms he saved the system- check your history. Reforms are due again, mainly in healthcare and the raising taxes of the ultra rich (who are have had a great run at 'socialim for the rich') as well as greedy US corpoartions and their mostly rich shareholders. Obviously Bush's low approval rating despite a so called 'robust economy' has much to do with this 'economic insecurity' many and myself feel. The economic and political pendulum has swung throughout history from the late 19th century to present- a swing to the left now seems probable if not inevtiable.

Anonymous said...

Its OVER. Last one out please turn off the lights.

Anonymous said...

I'm with you, Keith.

Market is wayyy overdue for a correction.

So many traders (aka "hot money") are chasing these uptrends. They don't care about fundamentals, but just follow the current trend. They will leave en masse when the trend turns downwards, and be happy to get 5% on their cash.

Only question is when. It may already be starting. JDSU is down -5% and -4% the past two days. The most speculative, run-up stocks are typically the first to show signs of weakness.

We live in interesting times.

prof_investor_40

Anonymous said...

America is not going to bomb Iran; the notion is typical conspiracy hysteria.

The housing bubble is mess, but I don't see evidence of an imminent crash.

People love imagining the worst, and projecting it onto those they don't like. Why do they go to horror movies and disaster movies? Because they're into melodrama.

Bush is no worse than Clinton, the end of the world is not coming, the neocons are no scarier than the ultra-libs, and all of this is a big put-on. My team vs. your team, ra, ra, ra. The fact of the matter is, both sides need each other, and would die of boredom without the fight.

Anonymous said...

"America is not going to bomb Iran"

How do you know? That was exactly my attitude prior to the Iraq invasion--- no way would we attack Iraq without UN support.

I'm a little wiser now......

Jim-in-SanMarcos said...

Moman choice of words I will argue the world is awash in debt not savings
skytrekker reference to FDR I will also argue over. The programs that FDR created are our biggest expenditures of today. The thought was nice, but the consequences are killing us.

The market is going to crash, but I think that the bond market is going to go first, and at that point the derivate markets will fall apart and the Mutual funds will have to sell to generate cash for withdrawals. This in turn will stimulate more selling and now your in a vicious loop

The biggest losers will be the biggest players, sadly it will be the retirement funds.

skytrekker said...
This comment has been removed by a blog administrator.
skytrekker said...
This comment has been removed by a blog administrator.
skytrekker said...

Jim in San Marcos

very conservative northern SD County
you failed to critique my history of the mid 1930's and FDR- offering objective historical perspectives. But that is too be expected from someone living in your locale of CA- that still thinks the free enterprise system cures all ills- which is like the LBJ way of thinking that vast social programs can help society. Good progressive can cure the excesses of the free market economy- not waste. Too bad the conservative movement cannot see that. And have opted for both waste and no safety nets for those who need it the most- another reason a big crash is very near.

Anonymous said...

"Bush is no worse than Clinton".

What f'ing planet have you been living on?
Certainly not the one where a president lied himself into a war a has killed over 100,000
so far. I can clearly say that you make me sick.

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