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Possible MASSIVE overnight collapse coming
Submitted by stuki on Mon, 02/16/2009 - 23:17
From Karl Denninger, hardly someone to dismiss: http://www.market-ticker.org/archives/801-RED-ALERT-FX-Dislo... This sounds like it could be a big one. » |
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That's a pretty high number these days
As the Dow gets lower, these 300 point drops are much higher percentage.. today it was down almost 4%. That is a massive drop.
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Stock up, it's gonna be a long winter.
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A great empire, like a great cake, is most easily diminished at the edges. - Ben Franklin
Well, I guess the MASSIVE
Well, I guess the MASSIVE collapse didn't occur. At least for those who didn't have their money with Stanford :)
I was the original poster, and apologize for posting such an inflammatory headline and then going to bed. Calling a 2-5% decline in the middle of volatile markets a MASSIVE collapse, and in caps to boot, is needlessly desensitizing and quite frankly silly. Sorry!
I do feel people here should keep an eye on market-ticker though, even though this warning, and some others, have been a bit over the top. Denninger's analyses are generally well thought through.
And, to clarify, in my usage of the term, even 'MASSIVE collapse' was not meant to indicate overnight Mad Max. A fall large enough to set of circuit breakers in any of the major indices would qualify for my usage of the term. So would forex moves violent enough to cause suppliers in one currency zone to start holding back scheduled supply shipments for fear of getting the short end of it. If things get to that, the real effects are pretty immediate and a whole lot less academic.
But perhaps we should agree to more precise classifications of various scenarios. Say, 'significant (or even not...) market drop' for what happened the last 24hrs, 'major correction' for 5+% moves in big indices, perhaps 'massive dislocation' for the scenarios I suggested above, and reserve the 'collapse' descriptions for real Argentina '01, banks closed, savings seized type events.
Again, I'm sorry if anyone lost sleep over my drama queen over hyping of what was just a rumor I thought many here would be interested in being made aware of. Reading through Denninger's comment section today, it seems his site were hammered by people posting links from sites all over the 'net. I guess that's how internet manias start......
GBPUSD
I trade the currencies daily.
Karl overreacted..... the pound took a dive over the weekend (not THAT unusual). Today trading was fairly modest, and is trading where it opened 24 hours ago 1.4246.... so some light swings both ways during the day and back where we started. No biggie.
No sweat
This is one reason we refused the 401k system our employers offered. We put our money into property for retirement. We've got time to wait it out.
"People demand freedom only when they have no power. "
--Henry Longfellow
"People demand freedom only when they have no power. "
--Henry Longfellow
I also ignored the options of 401k.
Just distrustful of everyone else who handled it including the company and also financial managers, didn't think that the stock market would fall so much. Almost 50% now ... that means all those retirees now have 1/2 as much to retire on! If it stays this low.
Well this market stuff is fun to watch..
..But the real 'collapse' is going to be:
(a) The Dollar;
(b) The Retail Sector;
(c) Unemployment;
(d) Commercial Real Estate.
How bad (b), (c), and (d) are, in my opinion, is dependent upon how long the hyperinflationary tsunami wave stays offshore. The wave is coming, though, if the laws of Austrian economics or reality are not subverted by some sort of magic or alchemy.
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Yea kind of like
Watching waves crash on the beach ,,,,the stock market today
If voting could really change things,
it would be illegal. Here is hoping for change!
5 plus hours flatline Longest mexican stand off i"ve ever seen !
Should someone yell GUN or something ? I believe unless there has been no trades since this morning,,, that the real fight is if we break that all important 7500 close . You know I really hate to go here ( I know how much this kind of talk messes with some people) but, If i were out to control the world . Having someway to control VIX would seem to be a must . Just saying
If voting could really change things,
it would be illegal. Here is hoping for change!
Gold Shorts Covering?
How much of the sudden demand for dollars could be gold shorts covering?
interesting! "When
interesting!
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐
Any update on this massive liquidation?
Any source yet? Where's all this money going?
I may not know the truth, but I know when I'm being lied to...
I may not know the truth, but I know when I'm being lied to...
DOW 7,630.02 down -220.39 -2.81%
10:53 Eastern 2/17/09
I read this last night before I went to bed...
...I figured it would be a bloodbath this morning.
Kind of weird.... unknown call for cash from the Orient? Massive liquidation? Sound like that thread from last week predicting the crash that didn't happen.... I have to go look at it again.
I may not know the truth, but I know when I'm being lied to...
I may not know the truth, but I know when I'm being lied to...
Weed through the information and make your own call
Regardless if you believe the urgency or not, Karl still provides valuable information here. Run it through your personal filter and take it as you will.
http://federalfallacy.com
http://federalfallacy.com
Was Reinhardt correct, but off by a week? Still not too bad!
Imagine if he nailed this date! We had the right scenario. This is massive. No PPT can go against something this big.
I remeber Karl calling for total collapse after Lehman I believe
I followed his advice and was wrong. I listen to him, but will not react until I see some dominoes falling.
Karl is correct on the fundamentals
But he often acts like a drama queen.
I don't know if we'll have a -15% day triggered by a surprise event. Ben Bernanke and friends have made it very clear that they don't care about actually solving the problem. Their objective is to engineer a controlled descent into poverty. It doesn't matter to the Fed if the economy grinds to a halt, as long as the process is gradual.
Karl is the best analyst I know. You just have to compensate for his personality.
The
The eastern europe crisis has spilled over to CNBC broadcasting today. I guess this one cant be ignored.
Is it not kind of weird to see the market flat line like this ?
254 - 264 for 30 minutes
If voting could really change things,
it would be illegal. Here is hoping for change!
Not really
The panic sellers are done selling, and the value investors are waiting for the next guy to move.
Once the market moves back up...the momentum upward will increase...and there will be a group of people who missed their panic sell this morning to move it back down.
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
In case you missed the update....
He posted an update below the posted article that explains that things may have been smoothed over for now:
Still, this just shows how precarious the situation is right now. It is only a matter of time before one of the pieces really does collapse, and then the whole house of cards could come crashing down. Make your preparations now if you haven't already.
Phew
Man...I was really sweating this one.
The NEXT collapse will be the real one I guess.
Thank god for these false warnings...how would value investors rake more money from panicky goons without false warnings?
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
This is the way I look at
This is the way I look at it. There is a collapse coming. If not the world, then at least for the United States. Our debt is mushrooming at an alarming rate, and Obama seems intent to up the ante. Meanwhile, our economy is sinking into a deep depression and our culture is beginning to split at the seams. There is an underlying current of dissension rising even among those who are not "awake". I had several conversations with people this weekend who do not follow or support Ron Paul who spoke about the anger and resentment growing toward the Federal government. Things are starting to heat up all over.
It is possible that things may be smoothed out this year. And it is possible that the collapse can be pushed off even longer. But eventually, we will have to pay the piper.
There is a line of thinking that it could never happen here. The IMF has too much wealth. Our military is too strong. Our system is too well designed. But history is filled with examples that demonstrate that such thinking is foolish. Babylon fell in its prime when an invading army plugged up the river and crept under the wall in the river bed. The great empire of Rome that spanned most of the known world eventually decayed and crumbled -- and the final collapse happened in a short period of time.
Our nation has been in decay for several decades. It is not unfathomable to think that we could soon see the end of the United States.
I am glad that you are optimistic, and I hope you are right. But from where I sit, I see the writing on the wall -- that it is time to make the final preparations for my family to survive the coming days of darkness.
News Flash (Sarcasm)
Benazir Bhutto was right, Obama is dead. He is now an illusion perpetuated by ..... who?
Huh
Bhutto claimed that Osama Bin Laden was dead, murdered by Khalid Sheik Mohammed.
She probably misspoke (English is a 2nd language) and meant to say Daniel Pearl.
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
Khomar
I like arguing with you. I've learned more from talking to you and Republicae than anyone.
Yes, a collapse is inevitable if we stay on our current course. A true fool would be one to argue otherwise.
I think the perfect storm is still 20 years off. I see the US economy as a bunch of pack animals (producers) pulling a bunch of cargo (leeches) up a hill. The producers can bear a certain number of leeches before he'll collapse in exaustion (or frustration).
Right now, we have a growing number of leeches and shrinking number of producers...but they trod on regardless.
In good times (boom years) the producers can more easily bear the weight of the leeches. Unfortunately, they get permissive and allow ever more leeches to hop on.
Then the bust years hit...all of the sudden, the weight becomes much more of a burden, and the pack animal begins to slow.
We are in the worst of times, and even so, the pack animal trods on...getting ever more annoyed at the weight of the leeches.
We're less than a decade from the start of the next boom cycle...so the leeches will pile on again.
Unfortunately...the next pile will include a massive amount of retirees (not to be looked down upon...they deserve to be carried). Also, the number of lazy welfare recipients will increase exponentially, the ever growing list of what counts as a "disability" will grow, the unabated flow of illegal immigrants will grow, the worthless government beaurocracy will grow, and the coup de gras....the American people (producers) will pick up all the doctor bills for all of the above. Happy fat Oprah watchers with a never ending supply of green and blue and pink pills to cure depression and hypothyroidism.
That's the perfect storm I see. Right now, the baby boomers are still working for the most part, and the medical bills are still within reason. But give the American people another boom cycle to forget the lessons of fiscal responsibility...and then you will have your collapse.
These are bad times...but we have officially crossed the threshold of "the worst of times" and it's a slow trod up from here.
I'm not as much optimistic as I am opporitunistic. American people are looking to hang the sign of blame right now. This is both a dangerous and exciting time. The blame sign has been hung on capitalism (USSR) on the Internation Jew (Nazi's)...who's going to wear the blame sign this time around?
Hopefully, this time the rEVOLution will hang the blame sing where it belongs...on big government and our foolish monetary policy.
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
I agree with your
I agree with your description of our economy and nation (the producers and leeches), and I agree with your assessment in a lot of ways -- even the twenty years. If it does not happen in the next two, we very well may enter a new cycle of growth until the final collapse the next time (assuming that we do not make the appropriate changes).
My question for you is this: why do you not believe that this time in the cycle is not the "final" collapse?
Your answer
Back to my pack animal analogy...I don't see the producers throwing up their hands and saying screw it...I give up. That's what it will finally take, for the true movers to decide it isn't worth it anymore.
This past few months have not been about that...but they've been about the general population being scared to death. We basically had 4 months of abject panic, due to factors that 95%+ of them did not understand in the least. They still don't understand what's happening.
This isn't the world collapsing...this is the world deleveraging. It's a function of a healthy economy...a natural rejection of 15 years of bad decisions. It's malinvestment snapping back at us.
It's a bandaid that finally gets removed. It should have been ripped off quickly in early 2000's...but Greenspan decided that we could squeeze a few more good years before he could move to Martha's Vineyard and retire. The natural cycle should have continued, we would have already hit the bottom (2005ish) and we should already be on a bounce back up...but we delayed foolishly.
Now the bandaid has been getting pulled slowly off for almost a decade. Any mother would tell you this isn't how you do this. You get the pain over with, see who's still standing, and move on together.
I don't see this as the collapse because of the following numbers...
Our debt is still well below our GDP...so our nation owes about 8 or 9 months work to various people.
A good chunk of our debt is still owed to ourselves...becoming less true every day, but still...
The cost to service the debt is still below 10% of federal revenue. Akin to a family making $100,000 with a $800 a month debt load. Not good, but not overloaded by any means.
Demand for US debt has never been higher (not since the 1940's). No crisis of faith developing
The recent downturn in our economy is pure consumer driven. People are buying less and saving more. Short term, it hurts...long term, a miracle cure to what ails us.
If we allow this thing to continue anabated for 20 years...our debt load will greatly exceed our GDP, a third or half of our federal revenue will be spent servicing our debt, and the world may finally begin thinking that the US would not be the pillar they thought we were.
This downturn was a stern warning...we are reaching a critical point.
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
Ordinarily, I might be
Ordinarily, I might be inclined to agree with you, but the government's reaction to the current crisis is unprecedented. We have never even come close to the amount of capital being thrown at the banking sector, and our debt is mushrooming rapidly -- far faster than any other time in the last century. I would also be wary of the official GDP figures as the formula to calculate this has changed in the last couple decades. Using the old formula, we have had negative growth in the GDP for most of this decade, so your calculation of debt to GDP is likely inaccurate (due to government manipulation).
As I consider this, I also believe your 20 year estimate, even in the most optimistic view, is unlikely. 10 years is probably closer as Social Security and Medicare are predicted to start failing by the end of the next decade. As people look forward to these future debts, they may just jump ship now rather than risk being left holding the bag even if the collapse could be several years away.
Markets are hard to predict, but the storm clouds are definitely building with little to see for an optimistic turnaround at this point.
10 years
There's a reason these things tend to run in cycles.
A new wave of commerce is being planted as we speak. Commercial and industrial real estate are about to get very cheap. Equipment and other business capital is going for firesale prices. Raw materials are cheaper than ever. The workforce is getting more desperate...which means lower wages. Environmental restrictions have gotten lax. Labor unions are weaker than ever.
The symptoms of an economic downturn are often the cure.
New industry rises out of the ashes of the old. Think of the companies that were founded right at the bottom of the last business cycle...Apple, Microsoft, etc. Right now, we're unaware, but the seeds for the next boom are being planted.
Believe it or not..there are many venture capitalists scouring the country for their next investment. Capital is there, although not from traditional sources like banks. Investors are tired of equities, commodities, and other traditional investments due to years of poor performance. This was the case in 1979 as well.
Markets are hard to predict in the short run...because they're so affected by millions and millions of people's personal psychology. Long term, they play damn near by the book. 28-30 year cycles, boom, bust, repeat.
It doesn't take a crystal ball to see into the future...just look at the past.
Those who are counting on a collapse to bring them the freedom they desire so badly...look at history. It doesn't happen...collapses bring violence, they bring disorder, they bring starvation. The result is martial law, order by decree, and government handouts. You might think you're prepared...but you'll be viewed as a hoarder and villified.
The French thought they had a revolution. They got Napoleon. The Russians thought they had a revolution. They got Stalin.
You sure you want a collapse?
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php