Is It Cynicism or Paranoia, Or Whistling Past the Grave Yard? Give it your best

I know just enough about the market to be scary. I know buy low, sell high. Utilities are mostly good, and stay away from steel and most American autos and airlines. BUT, over on Modern Survival Blog I saw this chart: http://modernsurvivalblog.com/the-economy/major-stock-market-crash-in-january/

Uncanny in its step for step matching:
1 - major-stock-market-crash-in-january

To say the least, I don’t like the chart for what it shows, but I like the blog site. Ken Jorgustin does a good job http://ModernSurvivalBlog.com . Hopefully the circuit breakers at the NYSE Work.

But what I fear the most is the potential chaos this could cause. And after watching the would be Emporer, he would quickly make this an issue to call for country changing edicts all centering around a power grab. BTW, there is always a touch of cynicism and paranoia, or else why write on the Blog?

9 Comments

  1. The chart seems realistic to me, because I believe that stocks are overvalued. We keep hitting new highs, which are great for day traders, but don’t seem to me to reflect the real value of the businesses. Given the very slow growth economy that we have had over the last year and a half, does it seem reasonable that the corporations whose stocks make up the DJIA are really worth 25% more than they were in the summer of 2012?

    If I think that the chart is similar to the extent that it is predictive, I would cash out in Early January — actually, between Christmas and New Year’s day would traditionally be better, hold the cash, and buy stocks again at the next bottom. In theory, that would be a capital gain of 25%.

  2. I keep reading this is the result of the Quantitative Easing by the Fed. The Banks are flooded with money, so it’s been a buying bubble spree. It will be like the exploding dead sperm whale deflating. The bubble:

  3. Then there is this:

    Nobel Prize economist warns of U.S. stock market bubble

    BERLIN (Reuters) – An American who won this year’s Nobel Prize for economics believes sharp rises in equity and property prices could lead to a dangerous financial bubble and may end badly, he told a German magazine.

    Robert Shiller, who won the esteemed award with two other Americans for research into market prices and asset bubbles, pinpointed the U.S. stock market and Brazilian property market as areas of concern.

    “I am not yet sounding the alarm. But in many countries stock exchanges are at a high level and prices have risen sharply in some property markets,” Shiller told Sunday’s Der Spiegel magazine. “That could end badly,” he said.

    “I am most worried about the boom in the U.S. stock market. Also because our economy is still weak and vulnerable,” he said, describing the financial and technology sectors as overvalued.

    Read more here:
    http://ca.news.yahoo.com/nobel-prize-economist-warns-u-stock-market-bubble-145958281–sector.html

  4. Market Circuit Breakers: CNBC Explains

    Published: Wednesday, 10 Aug 2011 | 11:59 AM ET
    By: Mark Koba | Senior Editor, CNBC

    Stock exchanges attempt to ease panic selling by taking certain steps to halt trading. These moves are called market circuit breakers—or collars.

    So how do they work? When are they used? CNBC explains.

    What are market circuit breakers?

    This is when a major stock or commodities exchange stops trading temporarily because an index, or even an individual stock, has fallen a certain percentage during a trading day.

    more here:
    http://www.cnbc.com/id/44059883

  5. Please, do not shoot the messenger….

    Repeat, don’t shoot. Stocks are way undervalued, most of the stocks of the crash were penny stocks, no longer included in the DOW.

    2nd, most of the stocks in the crash did not have gaap accounting.

    3rd most of the stocks in the crash, did not pay a cash dividend

    4th the scales can only be superimposed if its a percent of change – the change in stock prices in the crash was 200 to 300% the change in Obama is ALARMING, like the editor said, but it IS SMALLER, but significantly worrisome. 15% in 4 qtrs. is rapid but also follows several years of decline whereas the crash was the institution of trading on such a scale that most for the first time could participate in stock purchases and borrow against nothing to play stocks – a practice that for the most part is disallowed today

    So yes a crash would be bad except that most of the gains lost are paper – whereas the people borrowing the the great crash bet against their homes, land business and the crash had real consequences

  6. EPWJ
    Tuesday, 3 December 2013 at 21:13

    Please, do not shoot the messenger….
    Repeat, don’t shoot. Stocks are way undervalued, most of the stocks of the crash were penny stocks, no longer included in the DOW.

    First off, thanks for responding. We do not shoot messengers (well we have a few who were royal pains in the butt), because you do not come across as a Troll. Like I said in the opening of this “I know just enough about the market to be scary.” and any enlightenment of how you feel this will turn out is more than welcome. What I see, it appears to me the Quantitative Easing is creating a “Bubble” on the DJI. I liken this to the NASDAQ when it looked like any stock was “gold” and it grew too fast and peaked at 5,000+ then “POOF”, it was back to 1800. So, we all would appreciate any other view than what is stated.

  7. Dear Yorkshire

    I just want to preface the following grammatically incorrect comments as not being sponsored by anyone who knows me…

    quantitative easement…
    Oof!!!

    The rise in the prices of gold had to do to several reasons
    1. Russia controls the worlds gold supply – since they have massive reserves of it – they constrict the supply to fund their key operations

    2. gold is widely and very falsely marketed

    3. While in Doha and Dubai – I was bombarded by Arabs who were wondering if getting out of oil and real estate and getting into gold and the Euro was a safer bet – the answer was obvious now in just a few short months the price of gold has dropped but QE has accelerated? So speculation and greed are overstating the value of gold as much or more than QE, IMO

    Somewhere there’s an SAT question in all of this

    Stocks – will the market go down if a DEMOCRAT – stops printing money
    1. Sell stocks in ice companies because hell will freeze over soon if that happens

    2. The major stocks are multinational companies with deep benches of assets – in other words – they are not dependent fully on US monetary policy for their sales and their net worth

    3. So even a stock market crash will not erode as badly the value of multinational companies that trade and are headquartered in the USA, as one tier companies like Google, Microsoft, Walmart, which a obscenely disproportion of the US stock market value is in.

    Remember the best investment is land, unless you pay too much for it.

    That was irony..

  8. Thanks for the calming reassurances. :-D

    Stocks – will the market go down if a DEMOCRAT – stops printing money
    1. Sell stocks in ice companies because hell will freeze over soon if that happens

    2. The major stocks are multinational companies with deep benches of assets – in other words – they are not dependent fully on US monetary policy for their sales and their net worth

    3. So even a stock market crash will not erode as badly the value of multinational companies that trade and are headquartered in the USA, as one tier companies like Google, Microsoft, Walmart, which a obscenely disproportion of the US stock market value is in.

    And here I thought Bernake was going to slow the presses, that is of Bonds, not $100 Bills. But Yellen plans on investing in WD-40 and speeding up the presses on 14th St. at the BEP in DC.

    Meanwhile, while yelling “Here Spot” – Gold runs in at $1240 and Silver far behind at $19.60. And Ft. Knox has dust on the floor. And after watching the world, a wink and a nod are at the heart of all transactions, and us peons are just greedy bastards. What a way to plan an economy – DUST. That may be part of the irony.

    Anyway get your wheel barrows ready.
    PD_0092Front

    And dear leader wishes to mint a $1T Coin to solve the debt ceiling. Anyway, Zimbabwe beat him to it. Last I checked it was worth $0.03 USD.

  9. Yorkshire wrote:

    And dear leader wishes to mint a $1T Coin to solve the debt ceiling.

    No need to bother: with the way the Fed has been doing things, we can just say that it’s there, on deposit, and the effect is the same as if the coin had actually been minted and deposited.

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