Guest Post: 2008 Again?

Tyler Durden's picture

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:

fredgraph (14)


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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Xibalba's picture

No wonder they want all the peoples guns

Buckaroo Banzai's picture

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.

Watauga's picture

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.

economics9698's picture

“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?

JPM Hater001's picture

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?

Nels's picture

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

MillionDollarBonus_'s picture

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.

economics9698's picture

Sounds like the Bernie Madoff plan. 

Lohn Jocke's picture

MDB, care to lend me your guns? Sounds like you wont be needing them.

The Axe's picture

That is a very nice story, thanks for   I hope you get the flu!

Dr. Engali's picture

My "Modern Portfolio Theory" is to be diversified between gold, silver, and that semi-precious metal...lead.

ceilidh_trail's picture

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! 

ceilidh_trail's picture

Sorry, can't help feeding the trolls...

keystroke's picture

He isn't a troll; it's brilliant satire :S

Dollar Bill Hiccup's picture

Bit on correlation and MPT is a profound marketing insight !


Freddie's picture

So you are a futures trader and a Herbalife Distributor?  Two pretty good gigs if you ask me.

DR's picture


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?

reTARD's picture

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)

blu's picture

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.

Dr. Engali's picture

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.




The way they are branding Obummer as the new Lincoln civil war certainly seems to be part of their plan.

blu's picture

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.

A Lunatic's picture

The wrong demographic would be killed off Doc............

Dr. Engali's picture

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.

Freddie's picture

You may not be getting it.  The nationwide flu epidemic is a test run.  They have biolgicals and they will use them.

blu's picture

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.

NEOSERF's picture

Man with the Golden Gun is being hunted ruthlessly by Homeland Security.

Black Markets's picture

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.

Snakeeyes's picture

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.\

johngaltfla's picture

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.

samwell's picture

"Those who hammer their guns into plows will plow for those who do not…”  Thomas Jefferson

Buck Johnson's picture

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.

A Lunatic's picture

This is the house that Jack(asses) built..........

Watauga's picture

Unless we are wrong, and the stinking market climbs to 20,000, leaving all of us in its dust. 

RSBriggs's picture

Close.  My stuff is predicting a top at 18,000 before it all goes to hell.  Guess we'll see....

blu's picture

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.

NEOSERF's picture

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. 

Squid Vicious's picture

The Vix will be at zero in about two weeks, then I will get very bearish

suckerfishzilla's picture

I'm not hoping for a different result.  I'm not insane.  Silver bitchez.

AccreditedEYE's picture

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.

Aziz's picture

Missing out on a blowout top is not "getting killed".

AccreditedEYE's picture

:)  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?

awakening's picture

'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'.


yogibear's picture

LOL, Bernanke and the Fed's member banksters keep throwing money into the market.


busted by the bailout's picture

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.

905ozs's picture

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

tarsubil's picture

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.

A Lunatic's picture

The MSM is already pushing that outcome into the mushy little minds of the sheeples..........

Freddie's picture

Operation Mockingbird.  If you people still watch TV or Hollywood then you support it.