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Guest Post: 2008 Again?
Submitted by John Aziz of Azizonomics blog,
The so-called recovery is built on sand, and as stock markets climb and climb, and more traders and investors turn bullish, we come ever-closer to a new 2008-style collapse.
Markets have already gone far, far higher than many expected on a drift of reinflationary central bank liquidity. Yesterday the DJIA hit a new post-2007 high:
The same day, it was revealed that the big Wall Street banks are gambling again with billions and billions of dollars of clients’ funds. Goldman Sachs are back to pre-crisis-style profits. Again and again — from the LIBOR scandal, to MF Global, to the London Whale, to Kweku Adoboli — the financial sector has illustrated that it has learned very little from 2008, and is still practising many of the same hyper-fragile ponzi finance practices that led to the subprime bubble and the 2008 collapse.
Soaring markets, and soaring speculation. Big finance using loopholes to speculate bigger and harder. Mainstream financial journalists becoming more and more complacent about the “recovery”.
We’ve been here before. Isn’t repeating the same behaviour and hoping for different results the very definition of insanity?
I don’t know exactly how the next crash will occur — although there are many potential ignition spots including a severe trade or energy shock, or a Chinese real estate and subprime meltdown, or a natural disaster, or a new Western financial crisis. I don’t know when the next crash will occur, or how high the markets will climb before it does (DJIA 36,000 maybe? That would be hilarious).
But I know that if markets and regulators continue to repeat the mistakes that led to 2008, we will be back in a similar or worse hole soon.
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No wonder they want all the peoples guns
Exactly. And speaking of which, everyone make sure to show up at the 2nd Amendment rally being held at your State Capitol. High noon, tomorrow, in each of every 50 states.
http://www.market-ticker.org/akcs-www?post=216290
Seriously Buckaroo? Hell, tomorrow at noon I will be making preparations for Saturday Night's "Celebration of the Messiah President" party in honor of his inauguration. We'll have all our guests fly in on private jets, shut down the local airport's runways to do so, and celebrate all the way through Tuesday morning. It is going to be a grand celebration of the king. 2nd Amendment? We don't need no stinking 2nd Amendment. We have the messiah, Barack Hussein Obama. He will save us.
“It's important to emphasize that standard bear market declines have historically produced losses averaging about 30% - generally not just 20% (15% declines don't even qualify). I don't expect the next one to be a significant exception… Suffice it to say that the only reason to buy stocks here is a) the belief that one can sell them to a greater fool at higher prices despite already overvalued, overbought, overbullish and rising yield conditions, or b) the belief that the stock market will soar 30-50% from these levels, without experiencing even a minimal bear market in the next 4-5 years.
“Sometimes, it is sensible to speculate to some extent, even in overvalued conditions, if market action indicates an appetite of investors for risk and the market is not overbought or excessively bullish. Sometimes, strong multi-year gains without an intervening bear market are reasonable to expect, but those periods generally begin at much more favorable valuations. I realize that there is a visceral urge to participate here, as well as a fear of missing out when the market is hitting new highs, but over the full market cycle, investing to achieve short-term comfort costs a fortune.”
Hussman Funds Weekly Market Comment: June 18, 2007 – New Economy, or Unfinished Cycle?
Hey, Im starting a Libertarian Party County Affiliate and I have E-Caucus kits. Tag my JPMHater001 channel with a PM and I will get you started.
Why let a good crisis go to waste?
Suffice it to say that the only reason to buy stocks here
Care to comment on the alternate statement: The only reason to hold any dollar denominated asset is a) inflation will remain below 30 year Treasury returns b) the value of the dollar will reverse it's 98 year/98% decline and soar 30-50% c) we all get to go to Big Rock Candy Mountain
I made some serious cash going long S&P futures in 2012 (!), and I'm predicting that 2013 is going to be an even better year for the markets. But don't get me wrong, I reserve only a small portion of my risk capital for speculative positions in futures and options. The majority of my money sits in risk free US treasuries, whereas the bulk of my risk capital lies in a well-diversified equity fund managed by some of the brightest money managers out there. These professionals use 'Modern Portfolio Theory' to make sure that historical returns in my porfolio are uncorrelated; guaranteeing steady returns with little to no risk and securing my retirement. I think about the long term, not just the short term. And that's why I trust my money with only the best of the best.
Sounds like the Bernie Madoff plan.
MDB, care to lend me your guns? Sounds like you wont be needing them.
That is a very nice story, thanks for sharing...now I hope you get the flu!
My "Modern Portfolio Theory" is to be diversified between gold, silver, and that semi-precious metal...lead.
MDB- Low correlation in today's markets is not realistic. Variable beta, yes. Low correlation, not so much. I am happy to hear of your generous funding of the US debt- keep at it! Go long, young man! Through my brand new mdb eyeglasses, I see no danger of any rate rise risk whatsoever! I do hope you have lots of money in zero coupon long dated bonds as well!
Sorry, can't help feeding the trolls...
He isn't a troll; it's brilliant satire :S
Bit on correlation and MPT is a profound marketing insight !
So you are a futures trader and a Herbalife Distributor? Two pretty good gigs if you ask me.
No such thing as 'no risk' returns using 'Modern Portfolio Theory'. The LTCM fiasco should of taught you that.
Hedgefund software have codified 'Modern Portfolio Theory' into their algos so everyone is playing the same risk rules. Can you say Black Swan?
LOL... MDB you forgot to mention that a properly managed portfolio should have varying allocation percentages in the following based on age:
1) Equities (higher percentage if young)
2) Bonds
3) Money Market (higher percentage if old)
He's back! Good stuff.
Why would they take away anyone's gun when they will shortly need half the country to kill off the other half?
A lot of people here are still not getting it.
I go back and forth on that thought. It makes more sense from a cost stand point for them if we kill each other off then they come in and mop up the rest. Although they do have to weigh in the infintecimally small chance that the guns might end up pointed in their direction.
Edit.
The way they are branding Obummer as the new Lincoln civil war certainly seems to be part of their plan.
And recall, they had to kill off the Whigs and create the GOP to set the last nail in the coffin on the way to civil war. I guess they'll ritually murder the GOP this time and bring in something else to set the wheels rolling again.
It's been a little over 150 years. Same music different tune.
The wrong demographic would be killed off Doc............
The flu or some plague will take care of the demographic that is most costly to them. It's harder on old people, not to mention old people seem to buy into the flu shot meme easier than the generations behind them.
You may not be getting it. The nationwide flu epidemic is a test run. They have biolgicals and they will use them.
Nonsense. Way too difficult to control biologicals (I'm a biologist, don't get me started) I don't care what they say in the movies.
Easiest thing is to just arm everyone to the teeth and start a civil war and let the toughest kill off the weakest (that puts an end to state-paid welfare) and after that let the remaining toughest hammer on each other for control of whatever is left over while the elites relax behind their high walls pretending to be afraid. Everyone outside the walls ends up weaker and the oligarchs one day venture out and "offer" to establish "peace" while requiring that everyone else give up on all that "Bill of Rights" business.
A new feudalism welcomed with open arms, and a strong serf cast weary of war and willing to let by-gones be by-gones, and suddenly you've set back the clock to a better time.
Try not to play into their hands.
Man with the Golden Gun is being hunted ruthlessly by Homeland Security.
The recovery is built on inflation (not sand).
Remember all that money they printed? That's why the market went up
What else did people expect?
++money supply = rising market prices.
Simple stuff really.
The truth is that we are still in a recession by unemployment rates and poverty. Sinking incomes and rising poverty rates are NOT indicative of an economic recovery. 2008 is very appropriate, except for house price declines.\
http://confoundedinterest.wordpress.com/2013/01/18/poverty-in-the-usa-an...
This will be far worse than 2008. This is the HARVEST. If you have spoken to the author of that famous book on the Fed, then you'll know what I am talking about.
"Those who hammer their guns into plows will plow for those who do not…” Thomas Jefferson
They know when the game is over and the promises won't be kept, people in the US will go nuts. They are preparing for when austerity will be forced on Americans.
This is the house that Jack(asses) built..........
Unless we are wrong, and the stinking market climbs to 20,000, leaving all of us in its dust.
Close. My stuff is predicting a top at 18,000 before it all goes to hell. Guess we'll see....
Not that high even. They don't have either enough juice nor enough time. This thing has 6 months to live. Whatever they can juice it to in 6 months, that's what they get. After that they might hold it at some level using HFT but the actual bottom will have already fallen out.
They do seem to be out of ammo in terms of buying bonds and getting the mortgage rates any lower to goose the only thing that can save banks which is higher prices to get the mark to market back in shape. At this point all they can do is sit where we currently are and hope nothing goes off kilter. Fed doesn't have much more it can buy so it will have to start mailing checks to people like Bush did to try to get it off the mat.
The Vix will be at zero in about two weeks, then I will get very bearish
I'm not hoping for a different result. I'm not insane. Silver bitchez.
NOBODY cares John. They're too busy buying the dip. Their contra models tell them "everybody and their mother thinks we're gonna crash because the market is so high... you know what will REALLY fuck them up? Let's take this bitch to news highs." We read over and over the evidence as to why this market is supposed to drop and... it doesn't. Sorry John, you BTFD or you get killed.
Missing out on a blowout top is not "getting killed".
:) LMAO we have only run up to technical "ceilings".... I'll let you know when we pass thru "blow out top" territory... keep in mind the thousands who've bet big on "the crash" already and have been destroyed. It's all fun and game till somebody can't feed their family anymore... right? :) What's your net worth?
'keep in mind the thousands who've bet big on "the crash" already and have been destroyed.'
The market can stay irrational longer than you can stay solvent.
The above is why I simply prefer Chess over silly games where 'the only winning move is not to play'.
LOL, Bernanke and the Fed's member banksters keep throwing money into the market.
I heard they used to make money the old fashioned way -- they eaaaaarned it.
Today it's much, much easier -- just lie, cheat, and steal it.
A simple truth.
The Fed, BoE, BIS…Rothschild et al etc are privately owned & utterly ruthless. Collectively, they have been the masterfully controlled the system, fundamentally, Our very existence from birth to death has become indentured to Them.
Our very survival is dependent on their benevolent wishes. But, They aren’t benevolent, they are evil & their plan for Our planet is nothing less than enslavement.
They are called Rothschid Inc & short of a coordinated global revolution, We are powerless.
Water, Food, Shelter, Silver & LIFE are at their whim.
My research on these creatures over 20 odd years has led me to the conclusion;
Rothschild are the executive & Regina, Elite are the Field Marshals.
The Generals (deliver the fodder of pseudosecurity, failed politicians & perpetual war…and entertainment) industrio/political class
the Lieutenants , your Military functionaries, bureaurcrat class.
DUCK & see to your family’s welfare
The devils spawn.
This is not 2008. The stock market survived 2008. I'm thinking level off, stall, plummet then float to infinity Zimbabwe style. It will make perfect sense that when the stock market goes to infinity that participation of carbon based units approaches 0.
The MSM is already pushing that outcome into the mushy little minds of the sheeples..........
Operation Mockingbird. If you people still watch TV or Hollywood then you support it.
I'd settle for "level-off"....ha!
You're just looking at the situation from the wrong angle, doing the same thing in the same sitiation will yield the same results and deliver the same benefits to the same people.
From "their" perspective federal monetary policy works great.
The economic predictablity of America is about as reliable as sunrise.
The fact is you're too stupid and lazy to get out of the "bend over and get screwed line" and go walk over to the "bend them over and screw them line".
Get with the program, THEY WILL PRINT.
Then they will print.
Then they will print some more.
and in between all the printing we'll bomb the shit out of the world's peons, there's too many occupying our future stuff anyway.
Mali baby print o Rama Obama
only Nixon could go to China and only Obama can rape Africa, he's a multi-purpose tool
Obama has "street cred", he killed Osama
They will just keep printing.
You will print the same chart in January 2014 - the only difference is that the stock markets will higher and the right pyramid will that much higher.
Ddin't everyone think the markets would tank in 2012?
Of course the banks are doing the same crooked speculative bullshit they were in 2008; NO CONSEQUENCES for fraud, theft, manipulation, speculation, legerdemain and skullduggery (other than big bonuses and fat profits).
But this time, there's full government backing the whole way.
Come gather 'round people wherever you roam
And admit that he the waters around you have grown
And accept that soon you'll be drenched to the bone
The Times they are a changin'
The Line is drawn, the curse it is cast
The slow one now will later be fast
As the present now will later be past
The order is rapidly fadin'
And the first one now will later be last
For the times they are a changin'
You'll see what happens to the US with Japan.
It's already about ready to blow.
I think this is 2006. Where everything seemed like bullshit, but people were doing it anyway and the waves of LBOs came and ramped the S&P to ridiculous levels (1570 if I remember). I think you've got another 200 points on the S&P before this pops.
I keep calculating the "trail stop vs put" strategy. The trail stops are really scary in the age of HFT. There are some stocks where the put protection is really expensive: AMZN is what I'm thinking of. But if you look at other names like sherwin Williams... Puts are cheap despite the ramp job last year.
I know hedge funds have been real losers recently, but this is the kind of market where someone who knows what they're doing can really protect against that 20-30% loss
The market implosion won't come before the collapse of the debt market. The robots will make sure of that. There aren't enough humans left in this market to bring it down.
True.
So what goes pear-shaped first? Debt, or currency? (Chicken, or egg?)
OK so I just watched the Kyle Bass video up the page.
Simple answer: currency first, since the bond market has been castrated.
Our leaders have ignored their role in creating the problems we face, whether in war or in peace,
and only offer solutions which further empower and enrich themselves.
More and more, it does appear that a financial elite does operate as a criminal global cartel,
manipulating currencies, fixing prices, laundering monies, corrupting governments, and profiteering through wars.
It certainly looks like they are shepherding the rest of us to increasing miseries, to better offer a pretended relief
of totalitarianism
that would be their heaven and our hell.
http://www.globalresearch.ca/the-cashless-society-is-almost-here-and-with-some-very-sinister-implications/5313515
watch the experts look like boobs:
Secret Fed transcripts show lax response to financial crisishttp://www.cbc.ca/news/business/story/2013/01/18/business-fed-reserve-em...
An entire society built on a computer rigged digital zero system based on pure bullshit. This is not going to end well.
Built on sand? That's entirely too stable for what these bastards have done. More like a bottomless quicksand pit. They keep piling it on just to have a small bit gasping for it's last breath.
Ladies & Gents
You rant, but do not yet see the Rothschild nexus which has enslaved us.
If you did, there would've been pitchfork's & gibbets outside every Rothschild Inc home.
Happy ranting
This fecking cat must be made of rubber!
'expect different results' ?
I think WS would like the same results. They made mad money!!!
This market should have turned down in 2011. Barry and Ben wanted re-election so billions of tax dollars have been poured into the markets to keep them up.
http://bullandbearmash.com/chart/dow-jones-weekly-stalled-long-term-resi...
This is a short term tactic and the subsequent will be much worse.
...and another quarter of flat/declining revenue on hiring earnings (firings continue) enters the books.
Nothing personal Mr. Aziz, but I'm tired of little articles like yours. Tired of "brillant" people telling me, "Ya know, the world is gonna end some day" (Duh!). "Ya know, you're gonna die someday" (Duh!). When you do that, YOU ARE TELLING ME NOTHING. And so you say: It's 2008.....but, the Dow may go to 36,000. Well, that would make it NOT 2008. So your're telling it's 2008, unless it's not 2008. Wow, thank you.
The reality is all but a few of us with bunkers and enough ammo and stores here have no desire to see 2007 again. I am in awe as I have read these posts and stories for years now that the CBs have succeeded as well as they have. Their effort combined with ceding control of the markets to the MMs have made this stock market a marvel to behold. The point of so many of these graphs, numbers and stories is that at some point it hard to imagine this going any higher. The next 6 months will be really telling. Do we head towards $110 oil again? Does everything retail including the stock market and gasoline volume dry up further? Does the midwest have another year of drought and the Mississippi R stop boat traffic? Does the Baltic Dry Index plummet lower? Do Greece, Spain and Italy crash further into Depression and do their populaces do anything about it? Do house prices go up or do banks look at this as the first opportunity (like the gov and GM) to get out before things start tanking and unload distressed properties...time will tell but if I had cash on the sidelines, I don't think I'd be jumping in long right now.
The real bubble is in bonds. The stock market hitting its 2007/2008 nominal levels is nothing compared to the bubble that's present in US government debt obligations. Expecting bonds to repeat such is the true 'definition of insanity'.
Commodities aren't high, there might be a correction, but no crash.
We really don't know if it is 2008 again. But market action will tell us. Those following market timing systems (from a modest 200 days moving average to the more sophisticated Dow Theory) were spared massive losses in 2008, since a bear market was signaled well in advance the real collapse set in.
Big declines have been in the past (i.e. 1987, 2008) been preceded by primary bear market signals. More about this here: http://www.dowtheoryinvestment.com/2012/10/special-dow-theory-issue-revi...
Currently, the primary trend of the market is bullish and hence the odds don't favor an immediate crash. Before a severe bear market sets in, the primary trend should turn from bullish to bearish. This is not certainly the case right now, as the Dow Theory flashed a primary bull market signal on January 2 as it is explained here http://www.dowtheoryinvestment.com/2013/01/dow-theory-special-issue-asse...
Like all calamities, we will not see the next one coming until we are in the midst of it. For the last few years we have seen several opportunities for a real barnburner go by the wayside. Something is gonna happen and it will come out of the blue, orchestrated by the Wall Street big boys, and so designed for them to make a killing on the backs of the retail investor. That is how it works. Be patient while the big money prepares to become even bigger.
fuck u bernanke and obama for not getting rid of this asshole. this economy is awful, yet keep printing so that the market reaches all time highs. what a joke.
The sand that the recovery was built on was layered on sand as well, John.
It holds firm until its vibrated just in the right way.
Liquidity and liquefaction. All vibrations are both purposeful and induced, whether the cause is seen clearly or not.
That's actually not the definition of insanity. It's an error the internet has propagated.
An error does not become a mistake until you refuse to correct it.
BTW this is part of a plan to force people against each other, and spoken by none other than the former Commie green job czar Van Jones himself. Top down, bottom up, inside out!
www.youtube.com/watch?v=UEKs2_LdcCU
Also see STORM. http://www.beaufortobserver.net/pageimages/STORMSummation.pdf
I read ZH every day. I read about the coming implosion and it is just up up up and up. Is it possible that the manipulation is so great that this time next year we will be at 1,800 on the S&P? Really, with all the smat people here the bulls are having a grand time and have been for quite a few years. I am not invested but at what point does one have to admit that they are on the losing side of the trade?
Edit: whoops.
The fed has got us between a cock and a hard place. The vice is tightening. The walls are closing in on both sides as we curl up in the fetal position to take the cock right up the sphincter.
Bond prices and markets can decline concomittantly as happened in 1987. But with QE4, this will probably mean inflation will have doubled and kept bond markets from declining.