Economic collapse 2008...Economic collapse 2011?

Discussion in 'Economy' started by iamwhatiseem, Jan 17, 2011.

  1. iamwhatiseem
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    iamwhatiseem Gold Member

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    I have been watching the stock market with a sense of amazement over the last year. I got out in April of last year, I didn't have the stomach to wait for the next collapse, I made a whole lot from the 2008 collapse, but not because of great research or brilliant analogy...I can admit it - I was damn lucky and I don't want to tempt fate again.
    Consider that this market today is at historic bullishness as well as almost zero volatility...if a top analyst with all the tools available was living in a bubble with no communication except all he could see was the market - he would be in amazement as to how fast the economy rebounded - how else is it possible that the markets are now nearing averages before the collapse?
    But of course it hasn't rebounded.

    This article does a great job pointing out why there will be a second collapse - as well as who is causing it (and consequently how, despite promises, this administration is doing absolutely nothing about it)

    BE SURE TO CONTINUE THROUGH THE ARTICLE INCLUDING THE 18 GRAPHS

    13 Glaring Signs That The Market Is Forming Another Huge Bubble
     
    Last edited: Jan 17, 2011
  2. uscitizen
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    uscitizen Senior Member

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    The vegas style market, which no longer reflects how America is doing.
     
  3. Norman
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    Norman Gold Member

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    It is either 2011, 2012, 2013, 2014 or 2015 latest.

    My bet is 2012.
     
  4. iamwhatiseem
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    iamwhatiseem Gold Member

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    I don't think we will last beyond 2012 unless the government robs the taxpayers again to delay the inevitable...again.
    The mortgage crises that caused the collapse of '08 - is not only still here...but worse than it was before the collapse. The market over-valuation that also caused the collapse - is not only still over-valued, but worse than it was before the collapse.
    Then there is unemployement. Consider this: in December 230 companies in a leading industry was asked what is their "primary focus" for capital expenditures for 2012.
    69.8% said technology and systems to become more efficient. Efficient is of course an easier way of saying "less people"...for the most part.
     
    Last edited: Jan 17, 2011
  5. Flopper
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    Flopper Gold Member

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    Don't bet on the market, at least not with your investment money. If you want to gamble, go to Vegas. It's more fun. But if you want to invest forget about trying to spot the next top or bottom. Dollar cost average, investing in good stocks, bonds, or mutual funds with lots of diversification. It's boring and it isn't much fun, but you'll make a lot of money over the next 20 or 30 years.
     
  6. Toro
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    Toro Diamond Member

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    1. I would say everyone is not bullish. The last few years have seen mutual fund outflows. My friends who talk to retail investors tell me that they aren't coming back into the market.

    2. There is no tech IPO frenzy. Going after the hottest IPO in years is not the same as TalkingSockPuppet.com getting a billion dollar valuation on $8 million in revenues after going public, which was happening routinely during the Tech Bubble.

    3. Venture capital is seeing an outflow of money. Where are they getting these from?

    4. Volatility is still high by historical comparisons. The VIX is at 17, above its long-term average of 14. Vol never got above 20 from 2004 through 2007.

    5. Bad news is being ignored. That usually happens in a bull market, just like good news is ignored in a bear market.

    6. See (5).

    7. Apple is not indicative of the market. It is one stock. Analyst coverage of Apple is indicative of Apple, not the market.

    8. Sotheby's is not indicative of the market. I hadn't heard that one before.

    9. Shell companies? Heck, the Vancouver Stock Market is nothing but shell companies!

    10. Spin-offs usually create value. This is known in the market. When I ran my fund, I focused on spin-offs because they represent an inefficiency in the market.

    11. Yup, there are a few nosebleed valuations. But the market is trading at about its historical mid-range multiple, maybe slightly higher. Its not bubble valuations however.

    12. There is a bit of a Chinese-mania, yes, but that doesn't mean we are in a bubble. Chinese stocks have actually done poorly over the past year.

    13. Kinda scary...

    14. David Rosenberg is the biggest perma-bear around.



    I don't know if we are going to collapse in 2011, though I doubt it. If we do, it will be because of something we aren't prepared for. I don't think it will be because of mortgages or banks. If it happens, it will probably be some sort of currency crisis, something we aren't prepared for. Everyone knows about housing and the banks. That's old news. But we don't know what would happen if there is a buyers' strike for the dollar, euro or yen.

    Also, the summer is going to be fascinating. The economy is starting to improve, but can it stand on its own when QE2 ends on June 30? I don't know. That's what matters the most IMHO this year.
     
  7. JakeStarkey
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    JakeStarkey Diamond Member Supporting Member

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    I got out of the market in August and have safe assets in the local bank and credit union, which I know are absolutely solvent unless Godzilla strides through America. The issue that many face is what to do with excess cash. Put it into property when QE2 and the commercial property bond markets may crash; I don't think so.

    Any ideas?
     
  8. Norman
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    Norman Gold Member

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    I work for goldman, betting on markets what I do for work, betting in vegas is my past time activity :lol: J/K

    Commodities and gold is pretty sure bet, I am pretty sure that Bernanke has personal guarantee on that.

    Anyway my post was not about betting on the markets, but rather when the big dip hits. Chinese are already talking about the dollar not working for them, the dollar is going to go crashing down after that (or US is going to default).

    For market the important bet here is; Default or hyper inflation?

    I am going to say inflation and maybe after heavy inflation a default. Will see in couple years.
     
    Last edited: Jan 17, 2011
  9. JakeStarkey
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    JakeStarkey Diamond Member Supporting Member

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    Inflation will come eventually. Will it be superinflation?
     
  10. william the wie
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    william the wie Gold Member

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    I think the food riots worldwide will take ADM and other agri-stocks way high. With food inflation likely to hit double-digits on the world market either China or congress will fit Bernancke and Geithner with thumb screws. Both of those idiots encouraged the use of OTC derivatives not just after the crash but even after they were given an encore by this administration. As to general inflation I have no idea that depends on the vector sum of money destruction in the banking system vs money creation by the Fed. Given that Reagan and Volcker are still esteemed and they broke the back of inflation I think Obama is either going to get anti-inflation religion real soon or he will be replaced by someone who pledges to put in a Volcker clone as chairman of the Fed.
     

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