Fear of 'Catastrophic' Crash Rising Despite Bull M

[hamsterwheel]

www.cnbc.com/id/41655262
Probably not a surprise. Employment continues to be a problem, stimulus money is running out, the dollar is weakening due to QE2 to where everything is going up in price. Something is going to have to give. Bad news, market goes up. Good news, market goes up. When the market seems to go up for any reason, you know something is up. I think Decoy is onto something.

[itstippy]

Big corporations are also leery. They book profits and hoard the money in their war chests. They don't reinvest them in new plants or hires or R&D, and they don't distribute them to shareholders as dividends. They just declare the profits, pay the taxes, and stash the money in case things go to Hades. No confidence in the economy. Don't listen to what they say - watch what they do and draw your own conclusions. Actions speak louder than words.

[kman]

We should have our own mainstream news. Man, does fear sell or what?

[itstippy]

I have not seen Capex for 2010. Do you have a link for the 2010 numbers?

2009 Capex was down 20% from 2008, despite robust profit growth:
www.census.gov/econ/aces/xls/2009/summary_of_findings.html

Dividend distributions remain on the low end:
pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/spearn.htm

The big financials and multi-nationals are hoarding cash. Everyone from Ben Bernanke to Ben Stein has expressed concern about it. It's why we've not seen the money velocity expected from the stimulus and QE initiatives. Where have you been, Frank?

The article is about investors' continued fear of risk. It doesn't say anything about the dollar, or unemployment, or stimulus funds, or inflation. It's about a recent survey that shows investors are more afraid of a crash than they usually are this far into a recovery. Did you guys even read the article?

[lifewasgood]

Probably not, which is why I think metal is better than stocks at this time in history. When things get worse and I believe they will, then stocks will sell off before gold does.

[AgeOfEnlightenmentSCP]

I agree the economic problems that began in 2007 were never really solved. They were patched up with economic "stimulus"- massive government spending, artificially low interest rates, and downright inflationary monetary policies - QE1 and 2.

So, the underlying economic fundamentals not only continue to be weak, the situation was actually made worse.

Instead of allowing the market to correct for decades of over-regulation, and bad policy-- we doubled down. When that failed, we doubled down again, and when that failed- a third, and now it's pretty clear we couldn't afford it, and we sure as heck can't afford more of it.

At some point, we're going to have to let the market fully correct, and every effort to stave off the inevitable just ensures it will be that much more severe when it finally-- and it always does-- fully inform us via prices where we really are.

A sudden and immediate balancing of the budget-- like all $1.67 trillion in new proposed borrowing by President Obama being shut down; and followed up by tax and regulatory reform on a scale we haven't seen since the revolution are the only long term solutions that will work. They will work so well, in fact, that it would stave off some of the immediate, inevitable pain.

The abolition of the income tax, including payroll taxes, corporate taxes, capital gains taxes, and the death tax could provide a trillion to three trillion in economic stimulus in year one.

Cap spending at 15% to 18% of GDP and we could see a twelve to fifteen trillion dollar budget surplus in the next 10 years.

And that doesn't even factor in the effect of a strong dollar that would result almost immediately from a balanced budget.

Here's the best part: We may actually balance the budget in March. There is simply NO WAY the Republicans will permit an increase in the debt ceiling without significant reforms, so we could see that $1.67 trillion cut immediately out of the budget and the government shut down which would be a HUGE economic stimulus.

[vl]

Don't sell your well-placed short-- short.

The collective Dow is worth $3.90 REAL money. Platform Businesses, Law Firms and Ivory Towers are full of asses not assets.

[decoy409]

hamsterwheel, One thing I have watched for a very long time. Since I first joined MSN MT and now here as is a small pattern amongst the crowd. I say small because obviously this board does not reach the masses as the MSN MT board did (yet).
In my post today #1042 and #1035 have some very compelling things. The most I have heard from Michael from ZeroHedge ever in a interview with Max.

I am fully aware of more than what meets the eye and discuss or show by example as I have since I came around.
I wish to know what you think as to the reguritation of $100 TRILLION (and trump change) as discussed. The credibility is there and the success rate for calling things is 96% plus.
Frank does not open up to such things but aside from that he is a good salesman. Me and Frank I. do give each other alot of crap and there is sound reason to that but we will leave that out of things here.
When things settle down in the Middle East is the most ridiculas thing I have heard to date. Reason for that is that the Middle East has been at it since the beggining of time darn near. It's going to settle down? How? By nuking the entire region, cleaning up after, and restructuring it?

[kman]

Your becoming a diplomat Decoy. I like it.

Had some talopia tonight ..West African style...Made by West African friends...I'm still sweating. Shared your recipe...got some approving nods.

[decoy409]

kman, that sounds like some good eats! Just brought back from a lake 15" Crappies! Now that is some really tasty stuff as well. Beer batter style!

My diplomatic ways are not feasible in this world. They were tried and in turn others decided there was a better way to do things. That was around 30 B.C.E.

[hamsterwheel]

Feb 19, 2011 21:01:28 GMT -5 decoy409 said:

hamsterwheel, One thing I have watched for a very long time. Since I first joined MSN MT and now here as is a small pattern amongst the crowd. I say small because obviously this board does not reach the masses as the MSN MT board did (yet).
In my post today #1042 and #1035 have some very compelling things. The most I have heard from Michael from ZeroHedge ever in a interview with Max.

I am fully aware of more than what meets the eye and discuss or show by example as I have since I came around.
I wish to know what you think as to the reguritation of $100 TRILLION (and trump change) as discussed. The credibility is there and the success rate for calling things is 96% plus.
Frank does not open up to such things but aside from that he is a good salesman. Me and Frank I. do give each other alot of crap and there is sound reason to that but we will leave that out of things here.
When things settle down in the Middle East is the most ridiculas thing I have heard to date. Reason for that is that the Middle East has been at it since the beggining of time darn near. It's going to settle down? How? By nuking the entire region, cleaning up after, and restructuring it?
I think we're in for a world of hurt. We're in Il. I see things coming and am worried,.

[decoy409]

hamsterwheel,

DECOY DID NOT WRITE THAT ABOVE as you quoted.

I did not write: 'I think we're in for a world of hurt. We're in Il. I see things coming and am worried.'


Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3626#ixzz1ET7TZ1uJ

I will ask that you fix that last line as I quoted. I did not write I live in Illinois!

[hamsterwheel]

I am not sure what happened, but decoy did not write anything about IL being in a state of financial hurt. I did so and am not sure why it transferred my thoughts to decoy. Thank you and apologies all around.

[hamsterwheel]

Feb 19, 2011 21:01:28 GMT -5 decoy409 said:

hamsterwheel, One thing I have watched for a very long time. Since I first joined MSN MT and now here as is a small pattern amongst the crowd. I say small because obviously this board does not reach the masses as the MSN MT board did (yet).
In my post today #1042 and #1035 have some very compelling things. The most I have heard from Michael from ZeroHedge ever in a interview with Max.

I am fully aware of more than what meets the eye and discuss or show by example as I have since I came around.
I wish to know what you think as to the reguritation of $100 TRILLION (and trump change) as discussed. The credibility is there and the success rate for calling things is 96% plus.
Frank does not open up to such things but aside from that he is a good salesman. Me and Frank I. do give each other alot of crap and there is sound reason to that but we will leave that out of things here.
When things settle down in the Middle East is the most ridiculas thing I have heard to date. Reason for that is that the Middle East has been at it since the beggining of time darn near. It's going to settle down? How? By nuking the entire region, cleaning up after, and restructuring it?

Hey Frank,
I understand the optimism, but when firing all your Ph.D+ scientists becomes status quo to improve profits, and you rely on outsourcing, you've got yourself a problem. I'm not going to say much beyond that. I'm completely disgusted with pharma, even though I've never worked for them/

[hamsterwheel]

Feb 19, 2011 23:09:04 GMT -5 decoy409 said:

hamsterwheel,

DECOY DID NOT WRITE THAT ABOVE as you quoted.

I did not write: 'I think we're in for a world of hurt. We're in Il. I see things coming and am worried.'


Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3626#ixzz1ET7TZ1uJ

I will ask that you fix that last line as I quoted. I did not write I live in Illinois!

Seriously, that was my quote. I apologize to anyone that inferred that to be decoy, as well as to decoy. All flaming should be to me. Thank you!!! (and many apologies Decoy)!

[Aman A.K.A. Ahamburger]

This is hilarious.. Thank you for pointing out that people fear a catastrophic collapse, despite the fact that all the money is saying that the US is in a circular bull market. That sums up the last two years perfectly.

[hamsterwheel]

Feb 19, 2011 21:01:28 GMT -5 decoy409 said:

I'm not sure why my posts have been messed up, but in any case...
frank the impaler:I personally hate betting against the USD, but considering QE2 and everything else going on, I would doubt the US being able to fulfill its debt obligations. hence the decrease in US treasuries and everything else. You can keep your head in the sand only for so long. Sure we have less inflation than japan and europe, but is that what we're going for? You can already see some nasty writing on the wall. Not happy about it, but...
The only reasonable action at this point is to go into commodities, which is going to go to hell for the US in a hurry.

[comokate]

Feb 20, 2011 0:00:21 GMT -5 hamsterwheel said:

Feb 19, 2011 21:01:28 GMT -5 decoy409 said:

I'm not sure why my posts have been messed up, but in any case...
frank the impaler:I personally hate betting against the USD, but considering QE2 and everything else going on, I would doubt the US being able to fulfill its debt obligations. hence the decrease in US treasuries and everything else. You can keep your head in the sand only for so long. Sure we have less inflation than japan and europe, but is that what we're going for? You can already see some nasty writing on the wall. Not happy about it, but...
The only reasonable action at this point is to go into commodities, which is going to go to hell for the US in a hurry.

Welcome to market talk HW, and very glad to see another female poster on board. We share a similar outlook.
I think your posting issue might be that you are typing your response inside of the quote area...your writings should start after the quote tag.
At any rate, again, welcome aboard and I look forward to reading more from you.

[itstippy]

"This is hilarious.. Thank you for pointing out that people fear a catastrophic collapse, despite the fact that all the money is saying that the US is in a circular bull market. That sums up the last two years perfectly."

I don't see what's hilarious about it. It's abnormal. We've witnessed the biggest 2-year bull run any of us has ever seen, and yet individual investors have been heavy bond funds the whole time. The big financials & multi-nationals have stockpiled cash. Surveys show people don't trust the market recovery. They're still afraid of equities. What's "hilarious" about that?

Frank's been urging people to quit worrying so much about a crash, and to buy some stocks instead of just bonds, for two years. He's fretted about the mutual fund flows into bonds in his "streak" thread many times. I don't understand why he's upset about someone else's article saying the same thing he's been saying for 2 years. It's a validation of his viewpoint, if anything.

[vl]

You have to look beyond traditional markets to grasp the depth of our issues. If you invested at the start of the bull run, you made money. You keep re-investing that money now. It keeps on growing but-- when you made your original investment, your neighbor was scared that he was going to lose his job. Then he did. Then he and his wife and kids worked several odd and part time jobs and put a For Sale sign on the lawn. Then one of the family cars got repossessed one night. Then the For Sale sign came down and the garage sales started. Then cars drove by and took photos. Then they moved in the night. Then an out-of-state contractor came and put a dumpster in the driveway. Then another For Sale sign went on the lawn. Then a baby mama, her kids and six satellite daddies who fix cars by moonlight moved in. Then the bank made her move because she didn't make any payments. Then another one of your neighbors bought that house and moved the baby mama back in and visited her once or twice a week instead of charging her rent. Then the mice came. Then the rats came. Then the cockroaches showed up. All the while... you kept getting a piece of paper in the mail that said your investment was still growing and you ignored everything else.

Wake up. You're dreaming.

[decoy409]

hamsterwheel, thank you for clarifying that above! No foul and I gave you some karma as well!
Listen hamsterwheel, don't know what part you are in that way living, but stand tall and keep your FAITH amongst all! Start preparing for some very telly and unfolding times ahead if you have not done so already.
Someone else put it very well. If it does not meltdown, then throw a big party with your gatherings. But prepare now!

[frankq]

Actually, 75% of those responding gave the markets a 10% chance of "crash" in the next 6 months. Note "crash" was not defined in the article, but reference was made to the "flash" crash 1000 point drop that bounded back in short order. A 1000 point drop at this point wound not be Armageddon. Given the run the markets have had, some adjustment is not unusual or unexpected. I think the article was taken out of context here and more was read into it than exists. None of the bullet points mentioned in the opening statement of this post is talked about in the article. Nothing of unemployment, QE2, etc were discussed, only high frequency trading. I don't know how anyone could see how anyone else is "on" to anything here. The last paragraph is interesting though.....

“Belief in a coming Flash Crash is Chicken Soup for the Underinvested Soul," said Josh Brown, money manager and author of The Reformed Broker blog. “They aren't so much expecting one as hoping for one - so they can rationalize buying into a market that's left them behind.”

[frankq]

Feb 20, 2011 7:41:25 GMT -5 @vl said:

You have to look beyond traditional markets to grasp the depth of our issues. If you invested at the start of the bull run, you made money. You keep re-investing that money now. It keeps on growing but-- when you made your original investment, your neighbor was scared that he was going to lose his job. Then he did. Then he and his wife and kids worked several odd and part time jobs and put a For Sale sign on the lawn. Then one of the family cars got repossessed one night. Then the For Sale sign came down and the garage sales started. Then cars drove by and took photos. Then they moved in the night. Then an out-of-state contractor came and put a dumpster in the driveway. Then another For Sale sign went on the lawn. Then a baby mama, her kids and six satellite daddies who fix cars by moonlight moved in. Then the bank made her move because she didn't make any payments. Then another one of your neighbors bought that house and moved the baby mama back in and visited her once or twice a week instead of charging her rent. Then the mice came. Then the rats came. Then the cockroaches showed up. All the while... you kept getting a piece of paper in the mail that said your investment was still growing and you ignored everything else.

Wake up. You're dreaming.

Well I haven't seen that scenario here VL. Maybe you live in Detroit or some other harder hit area where problems were manifesting long before 2007. Yes, it's sad that some are in tough shape these days. It's even sadder that there are many out here who continue to assert that it's the end of times. Where some see just lemons, others see the possibility of lemonade. I prefer the latter and that strategy has worked out pretty well for me. Best of luck.

[usaone]

AS in every other economic expansion after a recession, there are many who dont believe in it.

When everone is a bull, then we will be at a top.

[itstippy]

The last paragraph is interesting though.....

“Belief in a coming Flash Crash is Chicken Soup for the Underinvested Soul," said Josh Brown, money manager and author of The Reformed Broker blog. “They aren't so much expecting one as hoping for one - so they can rationalize buying into a market that's left them behind.”

I read that last paragraph several times, kinda baffled. I now think it's a typo, and it should read:
“They aren't so much expecting one as hoping for one - so they can rationalize NOT buying into a market that's left them behind.”

In other words, many private investors (myself included) missed the boat and did not buy into a rising market. We passed up really big gains. Doh! So now we have to be careful not to rationalize our missed opportunity by over-estimating market risk. Those damned emotions will mess with one's market analysis. As in "Gee, I hope the market crashes so I'll be proved 'right' in my earlier decision to stay out."

[decoy409]

itstippy, your baffled! Check this,

Quote: Well I haven't seen that scenario here VL.

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=3626#ixzz1EWgEmShj

So are you sure you live in Il.? Maybe 'Rip Van Winkle' may be a good read as well.

Quote: Illinois Bankrupt?
(excerpt) Is the state of Illinois bankrupt? Well, if Illinois is not totally broke already it is certainly well on its way. The state government has now quit paying even the most essential bills. It spends three dollars for every two dollars that it takes in.
endoftheamericandream.com/archives/illinois-bankrupt

Quote: Census: Chicago Is Shrinking

Over the past 10 years Chicago has shrunk by roughly 200,000 citizens, new census data reveal, bringing the population down to 2,695,598 people. That's a total population decrease of nearly 7 percent. The shrinkage is in keeping with a broader trend in Rust Belt cities, though as Chicago's city center disappears, its suburbs are growing. The Sun-Times reports that black and Hispanic populations are increasingly moving outside the city—possibly because of the destruction of thousands of inner-city public housing units over the past decade—and the paper worries that the exodus could cost the Windy City hundreds of millions of dollars in federal funding. Taking a cue from the debate happening in Detroit, architecture critic Lee Bey wonders if "creating a significantly more populous city" should be Chicago's goal. Whatever your opinion, the census "underscores the fact that the growth of the Chicago metropolitan area is now concentrated in the outer suburbs," demographer Kenneth Johnson told the Sun-Times.
Read original story in Chicago Sun-Times | Wednesday, Feb. 16, 2011

Quote: These U.S. states are in serious trouble
www.thedailycrux.com/content/5652/Bankruptcy

Quote: Feb.6,2010 Think the PIGS Are in Trouble? These 7 U.S. States Could Be Heading for Something Worse
seekingalpha.com/article/187051-think-the-pigs-are-in-trouble-these-7-u-s-states-could-be-heading-for-something-worse

It baffles me how others don't even know what is up where they live!

[itstippy]

I'm not the only one baffled by the market's inexorable rise. The only truly confident investors I've encountered are FrankI and company, who are always bullish, and MikeC, who follows his strategy of dollar cost averaging and never wavers.

The markets turned in April 2009. By August 2009 the vast majority of economists & analysts were saying that the market was pricing in a "robust economic recovery," and if this didn't happen by December 2009 we'd see retrenchment.

Here it is, February 2011, and we haven't seen anything like a "robust economic recovery". We've seen an endless string of eye-popping stimulus measures with very little impact on the economy. The stock market, commodities, bonds, and metals have all gone up, up up! The stock market is up 100%! Inflation is dormant. Am I baffled? As Sarah Palin would say, "You betcha!"

[usaone]

Feb 20, 2011 14:18:21 GMT -5 @itstippy said:

I'm not the only one baffled by the market's inexorable rise. The only truly confident investors I've encountered are FrankI and company, who are always bullish, and MikeC, who follows his strategy of dollar cost averaging and never wavers.

The markets turned in April 2009. By August 2009 the vast majority of economists & analysts were saying that the market was pricing in a "robust economic recovery," and if this didn't happen by December 2009 we'd see retrenchment.

Here it is, February 2011, and we haven't seen anything like a "robust economic recovery". We've seen an endless string of eye-popping stimulus measures with very little impact on the economy. The stock market, commodities, bonds, and metals have all gone up, up up! The stock market is up 100%! Inflation is dormant. Am I baffled? As Sarah Palin would say, "You betcha!"

I cant speak for FTI but I am not always a bull. I was NOT a bull in 2007 and 2008.

THe 2 biggest misconceptions I have seen on this board are that some people who are bullish now are assumed to be always a bull.

NOT TRUE.

Also because we have not added all the millions of jobs that were lost we cant be in an expansion.

Recovering those jobs over a 5 year period and adding more is the expansion.

[neohguy]

I'm just guessing but I wouldn't be surprised if 75% of the country could care less about missing the current trend up. That same 75% probably doesn't know where the S&P is now or what the spot price of gold is. They probably don't lose much sleep because they didn't bet on yesterdays basketball games either.

[frankq]

There have been plenty of times where I have exited the market and had posted as much on the other board. The time may be coming again, but not right now in my opinion. This could be one of the best times in history to be in. We'll see.