Stock Market Crash Warning!

[Ugnmoose]

Sunday October 19
In his latest (Oct. 15) interim report, Elliott Wave expert Robert Prechter states unequivocally:

"... I am not nervously bearish or on the fence. I am all-out, no-holds-barred, shout-from-the-rooftops, yet-another-opportunity-of-a-lifetime-bearish. Wave patterns, cycles and technical indicators have developed into an astonishingly one-sided message. A market analyst dreams about a confluence of indicators this extreme."


http://www.bearmarketcentral.com/

[Skinner]

1. Not sure if this is relevant...

but the name of the website is "Bear Market Central." I suspect they may have a little bias in one direction.

[The Zanti Regent]

19. Three Booby Traps can trigger a Greater Depression

The first one is the explosion of debt at the consumer level. With wages being driven downward due to free trade, it is only a mattter of time before insolvency increases and we have a bank panic.

The second one is even more damaging, and that is if OPEC abandons the dollar for the Euro. If OPEC demands payment for oil in Euros, that would effectively reduce the value of the dollar by a minumum of 25%.

The third one is the deadliest, and that is if Foreign Investors refuse to continue financing the National Debt. This would cause a massive increase in inflation and interest rates and trigger a hyperinflationary spiral leaving the US Dollar as worthelss as the German Mark was in the 1920s.

Get ready for the New Depression folks, Pick the corner where you're gonna sell apples NOW!

[NoMoreRedInk]

20. I'm quite sure wages are still rising. I'll check right now****

nm

[NoMoreRedInk]

22. Both wages and personal income have grown or remained flat....

in every month of 2003. No negative movements or downward spirals.

I did read an interesting nugget yesterday that said that since the Great Depression:

-- In every presidential election that was immediately preceded by a 3rd Qtr. increase in wages above 3.2% (over previous year's 3rd Qtr.), the incumbent (or incumbent's party) has won.

-- In every presidential election that was immediately preceded by 2.8% increase, the incumbent (or incumbent's party) has lost.

-- Between 2.8% and 3.2%, you can flip a coin.

I found that to be an interesting stat, as I am a firm believer people overwhelmingly vote their wallets.

[grytpype]

2. The entrails of the sacrificial victims were free from disease.

This tells me that stocks are headed up.

[JNelson6563]

3. by all means then

head on over to the buy window come monday friend! ;-)

Julie

[livinontheedge]

4. The time to buy is when everybody expects doom.

Sounds like a buying opportuntity to me.

[Maeve]

But the doomsayers are in the deep minority just now

If you want to bet the contrarian position, go short.

[livinontheedge]

7. And why is that?

Could it be that corporate profits are rising?

[Maeve]

8. Oddly enough, here's an answer for you

The Majority is Usually Wrong
<snip>
The majority seem to have an uncanny ability to buy near the top of a bull market, and sell near the bottom of a bear market. Apparently that is the way things must be, otherwise who would the minority sell their stocks to near the top – and who would they buy stocks from near the bottom?
<snip>

[livinontheedge]

11. No, I mean why are people predicting a crash now?

Business is picking up. Jobless claims are falling. The dollar is weakening to the point of helping exports. Profits are climbing. I'm not saying the economy is good by any stretch. I'm saying it is moving in the right direction. That should be good for stocks. What am I missing? Yeah, I know that some of this good news has been dialed in to the market indexes already. But, I watch my mutual funds everyday. I read everything I can on market trends. I just don't see a crash unless something unforeseen happens.

[revcarol]

13. Don't know about a crash, but

one of your economic indicators indicates the opposite of what many believe.We have almost nothing left to export!! Except farm products, and many countries are forminmg regional cooperatives so they can fill the food needs of the region without having to buy any of our farm products(including GM foods.)WE DON'T MANUFACTURE ANYTHING ANY MORE!!

Have you forgotten so soon Bernie Sanders pithy remark, "Our main export is JOBS?"

[livinontheedge]

26. Your are kidding right?

"We have almost nothing left to export"? Never mind.

[Maeve]

15. Read the whole article

And poke around the website a bit. That one doesn't predict a crash per se, but is firmly of the opinion that we are still in a bear market and this has been a bear market rally, not the beginning of another bull market.

[leesa]

16. Jobless claims are falling because people are falling off unemployment

Businesses are laying off left, right and center...makes productivity look swell.

[JNelson6563]

29. here's a little blurb for you

youmay want to re-consider judging the economy based on the markets.

From Greg Palast's The Best Democracy Money Can Buy:

"...According to Wolff, the Gilded One Percent own $2.9 trillion of the nation's stocks and bonds out of a total of $3.5 trillion."

You may also wish to consider slightly disappointing 3Q reports coupled with many words of caution from CEOs re: 4Q and '04.

But hey, if the gilded 1% cleaning up is a comforting fact to you then by all means belly up to the buy window.

Oh, and FYI, find words of doom and gloom ont he economic front are as rare as finding truthful reporting in the corporate whore media. Some of us keep a very close eye on these things. Very close.

Julie

[Spazito]

5. Have at it!

The small investor will be the fall guy, the biggies already have put their monies in foreign investments.

[mmonk]

6. I wouldn't put much "stock" into it.

I think most stocks would still have to be trading at more times earnings than current numbers to indicate a dramatic crash. There are many showing increased profit margins now with projected increases next year.

[kalian]

9. That's right skinner....

but it all depends on WHO you want to listen too. The conservative pundits on the boob tube that need to draw a picture perfect image for the the sheeple so that they re-elect evil encarnate...or the folks that have their heads out of the sand and are seeing the impending tidal wave...?
The REAL indicators are not what the talking heads are saying...

[ShaneGR]

10. I hate restrictor plate racing, too many wrecks

Look what happened to Dale Earnhardt!

:-)

[Spazito]

12. Here is an article that spells it out clearly, imo...

This market is still cruising for a bruising

<snip>

Considering that a majority of Wall Street analysts surveyed by First Call were looking for profits to climb by about 16 per cent before the current earnings period started, 21 per cent or more looks pretty darn good. In fact, Mr. Hill said in an interview with a group of Globe editors and writers on Thursday that S&P 500 profits are likely to beat consensus estimates by a larger than usual amount in the third quarter, just as they did in the first and second quarters.

In the first quarter, Mr. Hill says First Call was actually "blind-sided" by how far ahead of estimates the S&P 500 came in. Over the past eight years, reported quarterly profits have been higher than consensus expectations by an average of about 2.8 per cent, he said, but in the first quarter they were higher by 6.1 per cent. In the second quarter, profits beat estimates by about 5.9 per cent. And the third quarter could come in even higher than that, Mr. Hill said.

So that's compelling evidence of the kind of strong turnaround the market is looking for, right? Not so fast. For one thing, whether corporate profits are up substantially compared with last year's quarter has a lot to do with how good or bad last year was, and for some companies it was very bad indeed — which makes their current results look that much better by comparison. For another thing, the amount by which profits exceed expectations has a lot to do with whether estimates are high or low. If they are low, beating them is that much easier.

<snip>

Investors seem to be expecting the economy to undergo the kind of turnaround it has seen in the past following a recession, Mr. Hill says, the kind where consumer demand surges and that allows companies to invest in more capacity and raise prices, producing better earnings. But this recovery is different, he argues. "Our whole thesis is that this recession was different from any other, and it is begetting a very different recovery." Since consumer demand never really dipped, it can't really surge, and capacity in both services and manufacturing got overstretched to the point where there is still too much slack in the economic system.

more

http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20031023.wmath1023/business/Business/businessBN/ctv-business

[kalian]

14. Good article. Thx for posting it.

:toast:

[Spazito]

17. You're welcome!

*

Edited to fix bad typing, geez, need coffee!

[Ugnmoose]

18. Do not listen to the crap that comes out of Wall Street

Insider trading has been at record highs for the last six months, with insiders selling at a rate of $36 for every $1 they are buying. This has got to tell you something. Wall Street is shilling for the Administration. Take a good look at where much of Bush's money is coming from - its the major investment banking and brokerage firms.

Don't get wrapped up in emotion. Take a look at the fundamentals. Here is some good reading for those that want to go behind the numbers and look at the economy as it really is not what those in power want you to believe. I would suggest that you read the three most recent articles in this series to get the complete picture.

http://www.financialsense.com/stormwatch/update.htm

[RUMMYisFROSTED]

21. Tonight we're gonna party like it's 1929?

[Zorro]

23. I think there's a credibility issue here

I have a hard time believing anyone who is a proponent of the Elliott Wave theory.

The Elliott Wave theory attempts to map the stock market movement to Fibonacci numbers, which are sequences commonly observed in nature. I frankly think that's a stretch, because the market is not an independent, organic element of nature, but a controlled, manipulated creation of the business and finance community that is influence by random events.

So I think the Elliott Wave theory is a bunch of hokum. That's not to say that the stock market might be in for a tumble (I'm always a bit nervous around October, based on historical precedent), but I wouldn't base my judgement on the predictive powers of the Elliott Wave.

Now a stock market analysis based on Mandelbrot geometry might be pretty interesting...but just as useless.

[mumon]

24. While it definitely is flavored crack-pot,

I gotta admit, the funds on this page:

http://www.bearmarketcentral.com/mutualfunds.htm

added to my portfolio have helped stabilize it.

People should own a bear fund (DON'T listen to the mainstream media on this!) as a hedge IF they own stock funds.

If the market goes way up, you're cool anyway: you'll take some loss in the bear fund, but you you'll have some insurance in case the market goes way, way down the other way, because in THAT case the bear funds go up, up, up.

Prudent Safe Harbor fund, in the bast 2 years, (now Prudent Global Income fund) has returned over 8.5% per year.

Not too shabby in a world where a "bull market" is defined by the media an increase of about 4%.

[Pale Blue Dot]

25. We need to think about what's propping this economy up

Low interests rates are fueling the housing market. People are buying overpriced housing at very low interest rates, and then taking 2nd and 3rd mortgages out on them. What happens when the interest rates go back up, people cannot borrow off of their home equity as easily or cheaply, and they have to start paying back their old loans and credit card debts?

Interest rates can hardly go any lower. ANd the only thing, and I reapeat, THE ONLY THING, keeping them low is that inflation has remained low.

If inflation begins to rise, the house of cards we have built will collapse. THEN, I firmly believe it will be time to sell, sell, sell, and probably time to move to Canada.

[TrogL]

27. Look at currencies

People are selling greenbacks and buying Aussies, loonies and sterling.

That's gotta hurt the US economy.

[the_real_38]

30. Actually, it may make our currency cheaper and...

... encourage export of our products. May even reduce our national trade deficit.

[cosmicdot]

28. according to Michael Belkin

Market prophet is battening the hatches


Analyst Michael Belkin called the bubble, the crash and the rally. Now he's telling his clients to bail. Here are his long and short strategies for a December downturn.

By Jon D. Markman

Rumors of the imminent death of the 2003 stock-market rally have been greatly exaggerated time and again in recent months. But according to one analyst with an enviable track record, the end days are finally here, and it’s time to prepare for a sickening plunge into December and beyond.

The doomsayer is Michael Belkin, one of the few investment analysts who has emerged from the recent boom, bust and re-boom markets with his reputation not just intact, but aglow.

Most independent researchers build careers as all-bull or all-bear, but not this guy. Operating out of a home office on Bainbridge Island in the Puget Sound near Seattle -- about as far from Wall Street as you can possibly get and stay in the continental United States -- Belkin writes a $36,000-per-year weekly report on equities, bonds and commodities for leading mutual-, pension- and hedge-fund managers worldwide. The report rises above the straitjacket of specialization to treat the global landscape holistically as an interlocking economic, political and social system.

Two weeks ago, Belkin abandoned his yearlong (and initially very lonely) bullish posture and put on the fur. He expects the broad market indexes to sink significantly through the end of the year, led by cyclical industrial stocks, and does not see much of a recovery on the horizon for 2004.Money 2004.

Belkin’s Street cred
Why take him seriously? He has caught the last few major swings exactly right.

~snip~


http://moneycentral.msn.com/content/P62345.asp

~~~~ FWIW ~~~~

according to a friend's observations (who likes to watch the details of economic life that others don't pay much attention to):

- he notices that the few dozen items he watches on eBay are facing
very thin bidding, prices are tumbling, and many sellers have given
up for the time being. Also many eBay items leave one scratching the
noggin, like newbies trying to sell 50 cent automotive parts and
people trying to sell 350 mhz computers for $400; these sellers are
feeding eBay's bottom line, but they too will dry up when their
psychotic fantasies burst.

- On the bricks and mortar side ... Retailers, Penney and Sears are STUFFED. In upscale department stores that sport vast amounts of Claiborne, Lauren and other overpriced potato sacks with embroidered imprimatur, the discounts are running 25-30-35-40-50 percent, and the merchandise is petrified on the shelves. Retail didn't stock winter outerwear in any quantity at all. These are not good signs. Not since 1973-74 has such dismal microeconomic signals in retailing been seen

- new and used car lots are sardine-packed indicating a healthy supply
outpacing demand. It's not the stuff of a George Bush Economic
Miracle. It's the whiff of deflation, recession, perhaps just a hint
of depression.

[mhr]

32. I Watch Ebay Closely

In the last six months, bidding has reduced drastically.

In prior times one would see bids for all comparable items. Now many items go without bids at all.

As just one example, go track piano sales. You will see piano after piano listed for 5 to 9 days with 0 bids. I've seen some pianos relisted 5 or more times.

This indicates that there are too few buyers and too many sellers.

Hardly the recipe for a robust recovery.

[Ugnmoose]

31. More bad news from Sir John Templeton

In a recent interview with Equities Magazine - Sir John once again offered some sobering advice.

http://www.bearforum.com/cgi-perl/otbbs.pl?read=3963