Could the Stock Market Crash in 2010? posted 5/14

Discussion in 'Stock Market' started by hvactec, May 15, 2010.

  1. hvactec
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    hvactec VIP Member

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    Posted on 05/14/10 at 10:09am by Charles Hugh Smith
    The conventional view is that the U.S. economy is "growing again" and the market is "cheap." Sounds like the perfect setup for a crash in 2010.

    U.S. GDP rose by 3%, corporate profits are leaping and stocks are cheap based on forward earnings. A stock market crash appears "impossible"--unless you look beneath the ginned-up numbers at the real economy.

    A reasonably grounded place to start exploring the idea that the U.S. stock market could crash in 2010 is John Kenneth Galbraith's classic book, The Great Crash 1929.

    Galbraith identified two primary causes for the crash and the subsequent Depression: 1) the euphoric confidence of the era, which blinded participants from seeing the fundamental weaknesses of the market and the economy, and 2) the fundamental weaknesses of the market and the economy.

    As Galbraith noted, bullish enthusiasm had overcome previous dips:

    "Indeed the temporary breaks in the market which preceded the crash were a serious trial for those who had declined fantasy. Early in 1928, in June, in December, and in February and March of 1929 it seemed that the end had come. On various of these occasions the New York Times happily reported the return to reality. And then the market took flight again."

    As the market recovered in late 1929, the bullish faith that the "market would always bounce back up" that had driven the market to new heights in 1929 remained firmly in place. Few participants in the 1929 crash anticipated a Depression; rather, most saw the market's quick recovery as clear evidence that the economy and market were both sound.

    read full story
    Could the Stock Market Crash in 2010? | Benzinga.com
     
  2. william the wie
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    william the wie Gold Member

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    The Euro is crashing and China's one child law is catching up with it later this year so a definite possibility.
     
  3. hvactec
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    hvactec VIP Member

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    this market looks fixed to me whats holding it up even.
     
  4. Terral
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    Terral Terral Corp CEO

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    Hi Hvac:

    Yes! See my "Economic Meltdown 2010" Topic here with Gerald Celente Video information. The markets were wired for implosion on September 18, 2008 (story) and the markets collapsed in March of 2009 (chart). The current fake recovery is financed by your children and grandchildren through all of the Stimulus/Bailout Trickery going on with the Banksters and the Obama Fascist Regime running the White House. However, rather than melting 'down,' the false flag recovery is actually causing the markets to 'melt up.'

    [ame="http://www.youtube.com/watch?v=eb1n1X0Oqdw"]Melt Up (You Must See This Video)[/ame]

    If anybody has doubt that the markets will "Melt Up," the do your own simple test by comparing the S&P to the price of gold:

    10 Year Gold Chart

    10 Year S&P Chart

    S&P Versus Gold Chart

    In 2000 the S&P stocks valued about 1500 dollars and gold was around 300 dollars, which means five (5) ounces of gold bought the entire S&P Index Stocks. Right now the S&P is valued at about 1120 dollars (thestreet.com) and gold is selling at 1226 dollars (goldprice.org). In other words, you can buy all the stocks on the S&P for 'less' then one (1) ounce of gold!

    Somebody tell me what happens when the S&P goes to 500 dollars and the price of gold goes to 5000 dollars per ounce! The S&P must go to 5000 at that point to just stay even with gold and that is NOT going to happen. Do the math and get out of stocks and fiat currencies that are 'all' decreasing in value together.

    GL,

    Terral
     
    Last edited: May 17, 2010
  5. Zander
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    Zander Platinum Member

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    We are heading for a 6 year bear market in stocks. We may have some secular bull moves, but the trend is DOWN.......WAY DOWN!!
     
  6. Toro
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    Toro Diamond Member

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    It already crashed. It fell 1000 points in less than a day.
     
  7. Zander
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    Zander Platinum Member

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    Yes it did. The question is it a precursor of a far more devastating move down?? One that will make a 1000 point drop look like a picnic.......
     
  8. Toro
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    Maybe. I take a 1000 point drop in a few minutes extremely seriously. I had flattened out my book a few days beforehand and remain with no equity market exposure. It could have been a technical glitch OR it could portend something more serious to come. I'm willing to sacrifice a few points to the upside to protect my downside.
     
  9. Polk
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    Polk Classic

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    Not could have been a technical glitch. It was a technical glitch, unless you really think a massive movement like that comes from a handful of stocks dropping to zero instantly and a few others (though not as many, obviously) skyrocketing.
     
  10. Polk
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    And to answer the OP's question, sure, it's possible. Anything is possible. It's highly unlikely though.
     

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