Ben Stein on Yesterday's meltdown.

[Baruch Menachem]

useful article. I like Ben, but I realize for a lot of you it is a matter of YMMV

.......The real economy is not doing great, but corporate profits are extremely strong. The nation's large corporations are loaded with liquidity. The luxury retail sector is powerful. Autos are excellent. The agricultural sector is stupendously strong. High tech and biotech are doing well, sometimes amazingly well.
The stock market is a barometer of corporate profits and somehow the barometer is now telling us corporate profits will fall far and fast -- yet the evidence for this is thus far faint. It may come, but markets, as the old saw goes, forecast ten out of every five recessions.
For pitiful, grizzled old me, when I see markets falling this fast, I smell "speculator." Economists and statisticians are not trading stocks. TRADERS are trading stocks and if they see a way to make money by selling or using options or instruments that are like a sale, they will make money that way. It has very little to do with the larger economy.
I offer as the world prize exhibit the Crash of '87. It was the biggest Crash ever in history before or since, was done entirely to make money off a trade between the cash and the futures of stocks prompted automatically by something laughably called "portfolio insurance." Within a few months, the market completely recovered and there was no recession.
That is, falls are often -- not always -- an epiphenomenon, if I have the right word, made by a small group of willful men within the markets and not connected with the larger economies.
Yes, Italy has problems. Yes, the USA has problems. Yes, our debt was just downgraded and rightly so since the federal debt is just a massive Ponzi where the earlier investors are paid by the later investors. But the Ponzi can go on a long time and Italy can be bailed out by the ECB -- and in the meantime corporate profits are brisk.
To my old and possibly failing eyes, we seem to be in a panic manufactured by speculators, fed by the media, poisoning the hopes and plans of the whole world.
The leading clue is the stupefying rise of gold, which simply bears no relation to any traditional metric. Gold buying panics are sometimes -- not always -- signs of a manufactured panic, just as any buying panic in a commodity is.
But the most astonishing part of the whole dreary tableau is the utter irrelevance of President Obama. He cannot do anything about anything. He might as well be on the moon. The gunslingers on Wall Street and in London and Hong Kong and Tokyo have made him absolutely outer planetary. It's almost sad. He's flailing his arms around, and no one is listening. He might as well be President of The Off World Colonies. "Yes, we can....we can be utterly irrelevant."........

 

[editec]

useful article. I like Ben, but I realize for a lot of you it is a matter of YMMV

.......The real economy is not doing great, but corporate profits are extremely strong. The nation's large corporations are loaded with liquidity. The luxury retail sector is powerful. Autos are excellent. The agricultural sector is stupendously strong. High tech and biotech are doing well, sometimes amazingly well.
The stock market is a barometer of corporate profits and somehow the barometer is now telling us corporate profits will fall far and fast -- yet the evidence for this is thus far faint. It may come, but markets, as the old saw goes, forecast ten out of every five recessions.
For pitiful, grizzled old me, when I see markets falling this fast, I smell "speculator." Economists and statisticians are not trading stocks. TRADERS are trading stocks and if they see a way to make money by selling or using options or instruments that are like a sale, they will make money that way. It has very little to do with the larger economy.
I offer as the world prize exhibit the Crash of '87. It was the biggest Crash ever in history before or since, was done entirely to make money off a trade between the cash and the futures of stocks prompted automatically by something laughably called "portfolio insurance." Within a few months, the market completely recovered and there was no recession.
That is, falls are often -- not always -- an epiphenomenon, if I have the right word, made by a small group of willful men within the markets and not connected with the larger economies.
Yes, Italy has problems. Yes, the USA has problems. Yes, our debt was just downgraded and rightly so since the federal debt is just a massive Ponzi where the earlier investors are paid by the later investors. But the Ponzi can go on a long time and Italy can be bailed out by the ECB -- and in the meantime corporate profits are brisk.
To my old and possibly failing eyes, we seem to be in a panic manufactured by speculators, fed by the media, poisoning the hopes and plans of the whole world.
The leading clue is the stupefying rise of gold, which simply bears no relation to any traditional metric. Gold buying panics are sometimes -- not always -- signs of a manufactured panic, just as any buying panic in a commodity is.
But the most astonishing part of the whole dreary tableau is the utter irrelevance of President Obama. He cannot do anything about anything. He might as well be on the moon. The gunslingers on Wall Street and in London and Hong Kong and Tokyo have made him absolutely outer planetary. It's almost sad. He's flailing his arms around, and no one is listening. He might as well be President of The Off World Colonies. "Yes, we can....we can be utterly irrelevant."........

When the herd is already spooked, it isn't too awfully hard to get them to stampede.

Do I KNOW that is what is happening?

No.

But such events as these have been known to happen.

 

[Annie]

useful article. I like Ben, but I realize for a lot of you it is a matter of YMMV

.......The real economy is not doing great, but corporate profits are extremely strong. The nation's large corporations are loaded with liquidity. The luxury retail sector is powerful. Autos are excellent. The agricultural sector is stupendously strong. High tech and biotech are doing well, sometimes amazingly well.
The stock market is a barometer of corporate profits and somehow the barometer is now telling us corporate profits will fall far and fast -- yet the evidence for this is thus far faint. It may come, but markets, as the old saw goes, forecast ten out of every five recessions.
For pitiful, grizzled old me, when I see markets falling this fast, I smell "speculator." Economists and statisticians are not trading stocks. TRADERS are trading stocks and if they see a way to make money by selling or using options or instruments that are like a sale, they will make money that way. It has very little to do with the larger economy.
I offer as the world prize exhibit the Crash of '87. It was the biggest Crash ever in history before or since, was done entirely to make money off a trade between the cash and the futures of stocks prompted automatically by something laughably called "portfolio insurance." Within a few months, the market completely recovered and there was no recession.
That is, falls are often -- not always -- an epiphenomenon, if I have the right word, made by a small group of willful men within the markets and not connected with the larger economies.
Yes, Italy has problems. Yes, the USA has problems. Yes, our debt was just downgraded and rightly so since the federal debt is just a massive Ponzi where the earlier investors are paid by the later investors. But the Ponzi can go on a long time and Italy can be bailed out by the ECB -- and in the meantime corporate profits are brisk.
To my old and possibly failing eyes, we seem to be in a panic manufactured by speculators, fed by the media, poisoning the hopes and plans of the whole world.
The leading clue is the stupefying rise of gold, which simply bears no relation to any traditional metric. Gold buying panics are sometimes -- not always -- signs of a manufactured panic, just as any buying panic in a commodity is.
But the most astonishing part of the whole dreary tableau is the utter irrelevance of President Obama. He cannot do anything about anything. He might as well be on the moon. The gunslingers on Wall Street and in London and Hong Kong and Tokyo have made him absolutely outer planetary. It's almost sad. He's flailing his arms around, and no one is listening. He might as well be President of The Off World Colonies. "Yes, we can....we can be utterly irrelevant."........

On the irrelevancy of Obama:

The most powerful man on Earth? - The Washington Post

The most powerful man on Earth?
By Dana Milbank, Published: August 8

A familiar air of indecision preceded President Obama’s pep talk to the nation.

The first draft of his schedule for Monday contained no plans to comment on the downgrading of the U.S. credit rating by Standard & Poor’s. Then the White House announced that he would speak at 1 p.m. A second update changed that to 1:30. At 1:52, Obama walked into the State Dining Room to read his statement. Judging from the market reaction, he should have stuck with his original instinct.

“No matter what some agency may say, we’ve always been and always will be a AAA country,” Obama said, as if comforting a child who had been teased by the class bully.

When he began his speech (and as cable news channels displayed for viewers), the Dow Jones industrials stood at 11,035. As he talked, the average fell below 11,000 for the first time in nine months, en route to a 635-point drop for the day, the worst since the 2008 crash.

It’s not exactly fair to blame Obama for the rout: Almost certainly, the markets ignored him. And that’s the problem: The most powerful man in the world seems strangely powerless, and irresolute, as larger forces bring down the country and his presidency...

I'm not sold on the markets 'ignoring him,' as they started out negatively stable for most of the morning, then teetered just before he would appear, crashing during and after. He brought nothing new to the table, same old blame game and repetition of sharing the pain.

He has spent all his important capital: Moral and political. He's got no game. I think he knows it too, which is why he's planning on spending the rest of his term raising capital of the greenback nature.

 

[Sallow]

useful article. I like Ben, but I realize for a lot of you it is a matter of YMMV

.......The real economy is not doing great, but corporate profits are extremely strong. The nation's large corporations are loaded with liquidity. The luxury retail sector is powerful. Autos are excellent. The agricultural sector is stupendously strong. High tech and biotech are doing well, sometimes amazingly well.
The stock market is a barometer of corporate profits and somehow the barometer is now telling us corporate profits will fall far and fast -- yet the evidence for this is thus far faint. It may come, but markets, as the old saw goes, forecast ten out of every five recessions.
For pitiful, grizzled old me, when I see markets falling this fast, I smell "speculator." Economists and statisticians are not trading stocks. TRADERS are trading stocks and if they see a way to make money by selling or using options or instruments that are like a sale, they will make money that way. It has very little to do with the larger economy.
I offer as the world prize exhibit the Crash of '87. It was the biggest Crash ever in history before or since, was done entirely to make money off a trade between the cash and the futures of stocks prompted automatically by something laughably called "portfolio insurance." Within a few months, the market completely recovered and there was no recession.
That is, falls are often -- not always -- an epiphenomenon, if I have the right word, made by a small group of willful men within the markets and not connected with the larger economies.
Yes, Italy has problems. Yes, the USA has problems. Yes, our debt was just downgraded and rightly so since the federal debt is just a massive Ponzi where the earlier investors are paid by the later investors. But the Ponzi can go on a long time and Italy can be bailed out by the ECB -- and in the meantime corporate profits are brisk.
To my old and possibly failing eyes, we seem to be in a panic manufactured by speculators, fed by the media, poisoning the hopes and plans of the whole world.
The leading clue is the stupefying rise of gold, which simply bears no relation to any traditional metric. Gold buying panics are sometimes -- not always -- signs of a manufactured panic, just as any buying panic in a commodity is.
But the most astonishing part of the whole dreary tableau is the utter irrelevance of President Obama. He cannot do anything about anything. He might as well be on the moon. The gunslingers on Wall Street and in London and Hong Kong and Tokyo have made him absolutely outer planetary. It's almost sad. He's flailing his arms around, and no one is listening. He might as well be President of The Off World Colonies. "Yes, we can....we can be utterly irrelevant."........

On the irrelevancy of Obama:

The most powerful man on Earth? - The Washington Post

The most powerful man on Earth?
By Dana Milbank, Published: August 8

A familiar air of indecision preceded President Obama’s pep talk to the nation.

The first draft of his schedule for Monday contained no plans to comment on the downgrading of the U.S. credit rating by Standard & Poor’s. Then the White House announced that he would speak at 1 p.m. A second update changed that to 1:30. At 1:52, Obama walked into the State Dining Room to read his statement. Judging from the market reaction, he should have stuck with his original instinct.

“No matter what some agency may say, we’ve always been and always will be a AAA country,” Obama said, as if comforting a child who had been teased by the class bully.

When he began his speech (and as cable news channels displayed for viewers), the Dow Jones industrials stood at 11,035. As he talked, the average fell below 11,000 for the first time in nine months, en route to a 635-point drop for the day, the worst since the 2008 crash.

It’s not exactly fair to blame Obama for the rout: Almost certainly, the markets ignored him. And that’s the problem: The most powerful man in the world seems strangely powerless, and irresolute, as larger forces bring down the country and his presidency...

I'm not sold on the markets 'ignoring him,' as they started out negatively stable for most of the morning, then teetered just before he would appear, crashing during and after. He brought nothing new to the table, same old blame game and repetition of sharing the pain.

He has spent all his important capital: Moral and political. He's got no game. I think he knows it too, which is why he's planning on spending the rest of his term raising capital of the greenback nature.

Well here's the deal. Government like money is a human construct. An abstract. If you put people into the government who hate it, who don't want to govern, who want to nullify elections...then guess what.

The government won't function and ceases to be relevant.

This is what you guys want.

This is what you guys got.

 

[Baruch Menachem]

It is useful to remember that stock markets are small groups of people prone to panic attacks.

Those of us old enough to remember the earlier days of the Reagan administration can remember the Granville stock panic, when one guy managed to spook the market down 300 points in a morning. within days the loss was erased by the end of the next day.

One of the reasons when I hear about "Technical" stock investing, I laugh.

 

[TruthSeeker56]

The U.S. stock market is a JOKE. It is built on a foundation of speculation, paper wealth, and extremely creative Ponzi schemes that never cease to amaze me.

Anybody who is playing around in the stock market right now is playing with fire.

 

[bitterlyclingin]

Art Cashin made some remarks on CNBC this morning about yesterday's events and today's and Monday's prospective events. His remarks were that this appeared to be setting itself up for the classic "Thursday-Monday" trading cycle, the first of which preceded the October, 1929 Stock Market crash that ushered in the Great Depression: ie Thursday is a massive down day, Friday trading is choppy but not necessarily grossly negative in direction, but the following Monday is a selling climax. Mr Cashin then added a little euphemism when stating that this type of event is usually followed by a pronounced rally. Sorry Sonny, er Art, that didn't quite happen in 1929.

 

[rdean]

You gotta love it.

Ben Stein, pusher of "magical creation" as science.

corporate profits are extremely strong

large corporations are loaded with liquidity

The luxury retail sector is powerful.

Autos are excellent.

The agricultural sector is stupendously strong.

High tech and biotech are doing well, sometimes amazingly well.

-------------->>>>>>>>

Yet, the president, who saved the auto industry is awful. Everything is doing well, but the president is awful.

THE EXACT OPPOSITE OF BUSH.

Bush was doing "extremely well", but everything else turned to shit.

That's why Republicans live in the "Bizarro World".

 

[Yurt]

why does rdean keep repeating that obama alone saved the auto industry? apparently he "forgot" bush's role in TARP.

 

[JimBowie1958]

An interesting blog on a very provocative BBC interview on this topic.

BBC Speechless As Trader Tells Truth: "The Collapse Is Coming...And Goldman Rules The World" | ZeroHedge