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Ghost Of 1929 Re-Appears - Pay Attention To The Signals

Tyler Durden's picture




 

Submitted by Anthony Mirhaydari via The Burning Platform blog,


 

Crowd of people gather outside the New York Stock Exchange following the Crash of 1929.

They say those who forget the lessons of history are doomed to repeat them.

As a student of market history, I’ve seen that maxim made true time and again. The cycle swings fear back to greed. The overcautious become the overzealous. And at the top, the story is always the same: Too much credit, too much speculation, the suspension of disbelief, and the spread of the idea that this time is different.

It doesn’t matter whether it was the expansion of railroads heading into the crash of 1893 or the excitement over the consolidation of the steel industry in 1901 or the mixing of speculation and banking heading into 1907. Or whether it involves an epic expansion of mortgage credit, IPO activity, or central-bank stimulus. What can’t continue forever ultimately won’t.

The weaknesses of the human heart and mind means the swings will always exist. Our rudimentary understanding of the forces of economics, which in turn, reflect ultimately reflect the fallacies of people making investing, purchasing, and saving decisions, means policymakers will never defeat the vagaries of the business cycle.

So no, this time isn’t different. The specifics may have changed, but the themes remain the same.

In fact, the stock market is right now tracing out a pattern eerily similar to the lead up to the infamous 1929 market crash. The pattern, illustrated by Tom McClellan of the McClellan Market Report, and brought to his attention by well-known chart diviner Tom Demark, is shown below.

 

Excuse me for throwing some cold water on the fever dream Wall Street has descended into over the last few months, an apparent climax that has bullish sentiment at record highs, margin debt at record highs, bears capitulating left and right, and a market that is increasingly dependent on brokerage credit, Federal Reserve stimulus, and a fantasy that corporate profitability will never again come under pressure.

On a pure price-analogue basis, it’s time to start worrying.

Fundamentally, it’s time to start worrying too. With GDP growth petering out (Macroeconomic Advisors is projecting fourth-quarter growth of just 1.2%), Americans abandoning the labor force at a frightening pace, businesses still withholding capital spending, and personal-consumption expenditures growing at levels associated with recent recessions, we’ve past the point of diminishing marginal returns to the Fed’s cheap-money morphine.

All we’re doing now is pushing on the proverbial string. Trillions in unused bank reserves are piling up. The housing market has stalled after the “taper tantrum” earlier this year caused mortgage rates to shoot from 3.4% to 4.6% between May and August. The Treasury market is getting distorted as the Fed effectively monetizes a growing share of the national debt. Emerging-market economies are increasingly vulnerable to a currency crisis once the taper finally starts.

The Fed knows it. But they’re trapped between these risks and giving the market — the one bright spot in the post-2009 recovery — serious liquidity withdrawals.

But the specifics of the run up to the 1929 crash provide true bone-chilling context for what’s happening now.

The Bernanke-led Fed’s enthusiasm for avoiding the mistakes that worsened the Great Depression—- a mistimed tightening of monetary conditions — has led him to repeat the mistakes that caused it in the first place: Namely, continuing to lower interest rates via Treasury bond purchases well into an economic expansion and bull market justified by low-to-no inflation.

(Side note here: As economist Murray Rothbard of the Austrian School wrote in America’s Great Depression, prices dropped then, as now, because of gains in productivity and efficiency.)

Here’s the kicker: The Fed (mainly the New York Fed under Benjamin Strong) was knee deep in quantitative easing in the late 1920s, expanding the money supply and lowering interest rates via direct bond purchases. Wall Street then, as now, was euphoric.

It ended badly.

Fed policymakers felt like heroes as they violated that central tenant of central banking as outlined in 1873 by Economist editor Walter Bagehot in his famous Lombard Street: That they should lend freely to solvent banks, at a punitive interest rate in exchange for good quality collateral. Central-bank stimulus should only be a stopgap measure used to stem panics, a lender of last resort; not act as a vehicle of economic deliverance via the printing press.

It’s being violated again now as the mistakes of history are repeated once more. Bernanke will be around to see the results of his mistakes and his misguided justification that quantitative easing is working because stock prices are higher, ignoring evidence that the “wealth effect” isn’t working.

Strong died in 1928, missing the hangover his obsession with low interest rates and credit expansion caused after bragging, in 1927, that his policies would give “a little coup de whisky to the stock market.”

 

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Sat, 12/07/2013 - 16:38 | 4224999 TeamDepends
TeamDepends's picture

Dang it, Tyler.  We were going to look like geniuses with our 1/14/14 prediction yesterday!  Oh well, it is probably best that everyone knows.

Sat, 12/07/2013 - 16:46 | 4225017 Occident Mortal
Occident Mortal's picture

I dont think it will repeat 1929, but I'm hppy to take a short position here based on the technical chart

Sat, 12/07/2013 - 16:53 | 4225044 DaddyO
DaddyO's picture

The prudent see danger and take refuge,
    but the simple keep going and pay the penalty

Well, is this chart indicative of the need to be prudent and prepare?

DaddyO

Sat, 12/07/2013 - 16:58 | 4225059 Occident Mortal
Occident Mortal's picture

 

Here is the chart.

 

http://i44.tinypic.com/zmh16s.png

 

18 years of DJI history.

 

For me it's a sell at this level and no matter what the news or the fundamentals or whatever is going on in the background. This chart is a bonafide sell.

Sat, 12/07/2013 - 17:08 | 4225077 Occident Mortal
Occident Mortal's picture

The DJI basically trades in a rising channel.

 

http://i40.tinypic.com/2z3ov1l.png

 

The rallys are very regular. It could go higher with channel of course, but I think momentum has died and the market is now rangebound and has been since May. This recent spike merely tags the trendline.

Sat, 12/07/2013 - 20:03 | 4225471 chumbawamba
chumbawamba's picture

Any sufficiently advanced [integral] is indistinguishable from magic.

Take a number.  Any number.  Multiply it by 9.  Add up the digits and if necessary keep adding them until you end up with a single digit, which will always be 9.  In the same vein, any number where the digits added together result in 9 is divisible by 9.

History doesn't so much repeat as it rhymes.

I am Chumbawamba.

Sat, 12/07/2013 - 21:08 | 4225618 TheRideNeverEnds
TheRideNeverEnds's picture

I just tried that and it works.

a..are you a wizard? 

Sat, 12/07/2013 - 21:44 | 4225681 NoDebt
NoDebt's picture

Anytime you multiply something by 9 (the second step in the instruction series) that's true.  It's just that they give you the red herring of choosing a number at the beginning (I've also seen it done where you add two numbers of your choice together), which makes it seem like you could have some affect on the outcome, which you can't.

A more useful little "9 rule" that you can actually use every day is to check for transposition errors (flopping 2 digits backwards anywere in a number- 1s, 10s, 100s, 1000s- doesn't matter).  If the difference is divisible by 9 into a whole number, you've probably made a transposition error.  Helpful when you add up a long column of numbers but your sum isn't what it should be.

ex:  3921 vs. 3291  

3921 - 3291 =  630

630 / 9 = 70

No wizardry.  I just stayed at a Holiday Inn Express last night.

Sun, 12/08/2013 - 02:55 | 4226248 AlaricBalth
AlaricBalth's picture

We are attending a great party tonight here in West Egg at some man named Gatsby's house. 1929 again.....naaaaa!!!!

Sun, 12/08/2013 - 03:19 | 4226271 Skateboarder
Skateboarder's picture

I've been waiting for that date, 1/14/14, since since 08. Fucking finally. Catharsis!

Sun, 12/08/2013 - 06:51 | 4226367 MeMadMax
MeMadMax's picture

My money is on febuary, when the holidays end and the numbers come out. This is also when the temp workers get axed, goosing unemployment, causing a snowball effect going into march.

Sun, 12/08/2013 - 07:38 | 4226377 GetZeeGold
GetZeeGold's picture

 

 

OK......this just looks bad.

 

It's not like today.......those guys back then were just idiots.......unlike us.

 

I'm sure everything will be jiiiiiiiiiiiiiiist fine.

 

Citizens of Rome.....UNITE!

Sun, 12/08/2013 - 10:27 | 4226491 negative rates
negative rates's picture

Shadow banks bitches!

Sun, 12/08/2013 - 10:54 | 4226526 clymer
clymer's picture

according to this site, maybe something bigger happens about 10 days sooner ?

http://jahbulonian.byethost7.com/

Sun, 12/08/2013 - 07:40 | 4226378 The Mist
The Mist's picture

How's the stock market gonna crash if the FED increases QE to 200 a month?

Sun, 12/08/2013 - 07:45 | 4226381 GetZeeGold
GetZeeGold's picture

 

 

Carefully?

Sun, 12/08/2013 - 09:34 | 4226448 Stuck on Zero
Stuck on Zero's picture

The President promised us: "If you like your stock market bubble you can keep your stock market bubble."

 

Sun, 12/08/2013 - 12:33 | 4226708 qqqqtrader
qqqqtrader's picture

well... you didn't build that!

Sun, 12/08/2013 - 14:36 | 4226950 brettd
brettd's picture

won't surprise me....

Sun, 12/08/2013 - 05:18 | 4226330 giggler321
giggler321's picture

It's not just 9.  It's any number of radix-1.  Decmial is radix 10, 10-1=9.  For hexidecimal example, has digits 0-9 and A-F to give 16, so 16 is F.  Given hexidecimal (any number) 1EAC, multiply by radix-1 (F) we get 1CC14, as in your comment, repeat if over radix-1, 1+C+C+1+4 = 1E, 1+E = F.   Try in your OS calculator.

Sun, 12/08/2013 - 07:41 | 4226379 GetZeeGold
GetZeeGold's picture

 

 

Where the hell did I put my aspirin? Oh yeah.....it's next to the vodka....duh!

Sun, 12/08/2013 - 12:58 | 4226751 Ralph Spoilsport
Ralph Spoilsport's picture

Decimal 15 is F in hex. Decimal 16 is 10 in hex.

Sun, 12/08/2013 - 17:45 | 4227365 giggler321
giggler321's picture

Very true.  undisputable.

Sun, 12/08/2013 - 21:01 | 4227892 zerozulu
zerozulu's picture

No, actually any number you add the answer will be C+H+I+N+A= 1+4=5  Thats five more months. Hint is I+R+A+N agreed Six months and one is already passed.

Sun, 12/08/2013 - 07:04 | 4226370 cbaba
cbaba's picture

You should multiply by 9 first :
If you think the magic number you found 630 doesn't work then 630*9= 5670 .
If you add 5+6+7+0=18 and keep adding 18 = 1+8 = 9
So it works.

Sat, 12/07/2013 - 22:09 | 4225737 chumbawamba
chumbawamba's picture

What is it that hath been? that that shall be: and what is it that hath been done? that which shall be done: and there is no new thing under the sun. - Ecclesaistes 1:9 (1599 Geneva Bible)

I am Chumbawamba.

Sun, 12/08/2013 - 01:32 | 4226140 lewy14
lewy14's picture

I get it now... the answer lies in...

Integral Studies...

Thanks Chumba!

Sun, 12/08/2013 - 08:18 | 4226385 GetZeeGold
GetZeeGold's picture

 

 

 

and there is no new thing under the sun

 

There are only four things certain since Social Progress began:---

That the Dog returns to his Vomit and the Sow returns to her mire,

And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins

When all men are paid for existing and no man must pay for his sins,

As surely as Water will wet us, as surely as Fire will burn,

The Gods of the Copybook Headings with terror and slaughter return

- Rudyard Kipling

 

I would have posted the whole thing.....but I didn't want to scare anyone.

Those guys knew about Social Progress back then? No worries...it's probably not Social Progress as we think of it today....just remember the three magic words.....yes we can!

 

Sun, 12/08/2013 - 14:37 | 4226955 brettd
brettd's picture

fOOOOOOrward!

(love Kipling....thank you!)

Sun, 12/08/2013 - 17:41 | 4227360 MetalFillBoy
MetalFillBoy's picture

Chumba,

Strange how one day someone can make a Biblical reference, and get no responses, while others get a flurry of posts.  This is one of my favorite verses when it comes to understanding what we are going through.  It has happened before and will happen again.  Maybe not exactly, but it sure will rhythm!

 

MFB

 

Sun, 12/08/2013 - 11:04 | 4226547 ncdirtdigger
ncdirtdigger's picture

Burn the witch!

Sun, 12/08/2013 - 14:02 | 4226875 Raging Debate
Raging Debate's picture

Explore and correlate Pythagoras and Benoit Mandelbrot's fractals yet?

Sat, 12/07/2013 - 17:54 | 4225195 Sudden Debt
Sudden Debt's picture

I would agree with you completly but now there's 10 trillion extra in the game which wasn't in those last 2 peaks

Sat, 12/07/2013 - 18:12 | 4225234 Occident Mortal
Occident Mortal's picture

So what?

 

It's flow that moves the market.

Sat, 12/07/2013 - 18:39 | 4225300 Beam Me Up Scotty
Beam Me Up Scotty's picture

How much money does the Plunge Protection Team have up their sleeve?  I bet they will arrive just in time to give you some "flow".  And the Dow would still be over 12,400, hardly a crash like 2007.  But it would be just the excuse that BernYellen would need to open the QE spigot even further.

Sat, 12/07/2013 - 18:42 | 4225313 HardlyZero
HardlyZero's picture

The physical Gold Team supports the PPT thesis.   And, BenYellen will do their Ctrl-P thing.

Sat, 12/07/2013 - 18:51 | 4225336 I am more equal...
I am more equal than others's picture

 

 

 

This time it is different.  The money that moved the market prior to the 29 crash is not the same source that moves the market now.  Its hard to leverage a printer. 

Sat, 12/07/2013 - 19:09 | 4225361 Occident Mortal
Occident Mortal's picture

It's always different this time.

 

2008 was all about loose money too.

 

It's not just Central Banks that have the power to create money. Before 2008 commercial banks were the source of the vast majority of new money, check out an M1 chart.

 

http://research.stlouisfed.org/fred2/graph/?s[1][id]=MULT

 

Yes the Fed is creating new money now, but they are merely plugging the massive hole that is commercial bank money origination following the collapse of retail and commercial credit expansion.

 

It's just a different spigot this time.

Sat, 12/07/2013 - 19:22 | 4225397 Occident Mortal
Occident Mortal's picture

Oh and the reason why M1 is crashing is because the banks aren't lending the money out...

 

http://research.stlouisfed.org/fred2/data/EXCRESNS_Max_630_378.png

 

They are keep it as reserves.

 

Where are they depositing it?

http://research.stlouisfed.org/fred2/data/WRESBAL_Max_630_378.png

At the Fed of course.

 

$2.5 trillion of QE is already back at the Fed.

Sun, 12/08/2013 - 02:49 | 4226240 AbbeBrel
AbbeBrel's picture

Minor bug fix - the last part of your URL somehow didn't make it into the link - copy and paste works, but FWIW

 

 

http://research.stlouisfed.org/fred2/graph/?s[1][id]=MULT

That is the full link with the missing bits...   -AB

Sun, 12/08/2013 - 13:54 | 4226756 Drifter
Drifter's picture

TARP and QE didn't exist in '29. 

If it didn't exist in '09 there would have been another '29, but far worse due to far more leverage.  Trillions of dollars of secondary derivatives didn't exist in '29.  In '09 they did and they all would have crashed.  Wall Street would never have recovered.

So yes it was different this time.  Same causes, different response. 

In '29 massive wealth disappeared from financial markets and Fed wasn't willing to pump new wealth back in.  Wall Street had to bear their losses.  

In '09 Fed was willing to pump new wealth back in (wealth stolen from the American people via currency printing and resulting debasement).

The '09 collapse hasn't stopped.   Bonds and derivatives are still collapsing.  MBS are still collasping just like they did in '09.  It's why QE keeps going, and will keep going till Fed buys up the entire MBS market.

Something else is different in '09.  Huge govt deficits and borowing.  Fed has to print and buy up all that stuff too to prevent treasury bond market collapse.

The '09 collapse has no end.  America no longer has the manufacturing capacity to generate massive wealth needed to pull out of it.  Wealth stolen from the American people will keep Wall Street (and govt) afloat long as possible until it runs out  (American people are destitute).  Then the '09 collapse will actually happen, and that's the end of America.

 

Sat, 12/07/2013 - 18:20 | 4225262 VD
VD's picture

the DOW at 1300 is by no means a crash or even a legit correction. the DOW at 8k is about fair value sans QE. so under that and then some is a genuine crash.

Sun, 12/08/2013 - 01:59 | 4226177 MsCreant
MsCreant's picture

You are an odd bird. All of it is fiction otherwise I would be upset with your proclamation. Yours is no more or less legit than the Fed. This is no compliment. No insult either. There is no spoon, VD. There is no spoon.

Sun, 12/08/2013 - 07:43 | 4226380 The Mist
The Mist's picture

You forget that it's valued ágainst the dollar. 

The dollar has lost enough value since the previous crash for a higher plateau to be normal.

Own stocks, you own a business. Own dollars, you don't own shit.

Sun, 12/08/2013 - 13:43 | 4226826 Neo
Neo's picture

if the Dollar goes to zero........it all goes to zero

Sat, 12/07/2013 - 18:19 | 4225257 Jeff Lebowski
Jeff Lebowski's picture

The prudent have thrown up their hands at the lunacy and left long ago.... There's nothing new here in the form of fundamentals, signals, and omens from what was present when Tyler started ZH 5 years ago.

Sat, 12/07/2013 - 18:31 | 4225287 DaddyO
DaddyO's picture

You're right, but normalcy bias is a bitch.

The markets are so distorted, that short a major reset/correction, we have no way of knowing where reality lies.

Besides, what the heck would we post about, real trades with matching TA, real charts and such?

DaddyO

Sun, 12/08/2013 - 08:09 | 4226393 GetZeeGold
GetZeeGold's picture

 

 

Normalcy bias......makes my brain hurt.

Sat, 12/07/2013 - 19:05 | 4225368 Teddy Tenpole
Teddy Tenpole's picture

 

 

Not true Jeff, the new new thing is just how many more Douches keep showing up.

Sat, 12/07/2013 - 19:08 | 4225375 DaddyO
DaddyO's picture

Ya, some douches showed up here about 11 weeks and 20+ hours ago...

DaddyO

Sun, 12/08/2013 - 00:50 | 4226056 silverserfer
silverserfer's picture

and the only way to become a ZH immortal is to be banned. Damn shame.

Sun, 12/08/2013 - 13:14 | 4226774 RockyRacoon
RockyRacoon's picture

Martyrdom ain't all it's cracked up to be.

 

Sun, 12/08/2013 - 23:58 | 4228325 matrix2012
matrix2012's picture

Really??? Indeed how many have been banned besides francis_sawyer?? just wondering

Sun, 12/08/2013 - 02:05 | 4226182 MsCreant
MsCreant's picture

Douche, the new spray and pray.

Sun, 12/08/2013 - 12:33 | 4226710 Teddy Tenpole
Teddy Tenpole's picture

 

 

 

haha, touche!  I meant to say Doomer Douches.

Sun, 12/08/2013 - 04:10 | 4226296 dark pools of soros
dark pools of soros's picture

nothing new??   except bitcoin  ;)

Sun, 12/08/2013 - 05:17 | 4226328 ThirdWorldDude
ThirdWorldDude's picture

Just a digital rerun of an event seen in Holland in the early 1600s...

Sun, 12/08/2013 - 08:15 | 4226395 GetZeeGold
GetZeeGold's picture

 

 

Yeah.....but we can do it faster now.....cause it's digital!

 

We are no longer hindered by growing cycles.

Sun, 12/08/2013 - 13:28 | 4226763 Kirk2NCC1701
Kirk2NCC1701's picture

'You're only as good as your last season."

So it is with market predictions: The Bulls didn't just beat the Bears last year. The Bears could not have been more wrong. My friends' bull-portfolios gained 20-30%, while my ZH-portfolio LOST 30%. The delta is horrific.

"The sky is falling" has been going on for years and a person could go broke and starve in the Doomsday shelter, while the sun is shining and everyone else made hay.  I get it that Bears make money from other chronic bears, by selling them picks & shovels (newsletters & services).   But tell me, ZH friends, how is your investment portfolio doing?  And slippery side-steps of evasion or sophistry doesn't count.  If your fiat investment did not result in healthy positive ROI, you "lost".   And "not playing" counts as "lost opportunity cost" of 20-30%.

In the words of that very rich a-hole, by the name of Donald Trump: "ZH, you're FIRED!"

p.s. And in case a bull crash does happen, and it actually happens in the predicted time-window, then "You're only as good as your last season (prediction)" still applies, and always will.

I'm cancelling my bear newsletter subscriptions, betting some very targeted equity positions.  Like the good Lord and like the Oracle of Omaha, "I shall heed my own council".  Please spare me the diarrhea of verbal abuse for shining the harsh light of truth.  Instead... "Gentlemen, start your engines.  Gentlemen, place your bets!"  Opinions don't matter, but results will.  We'll check the scores and positions after 60 laps on the Monte Carlo* race. 

* The statistics-savvy people will have gotten the double-entendre.

Sat, 12/07/2013 - 17:15 | 4225092 snowlywhite
snowlywhite's picture

would be fckin' great if they'd give a correlation % too...

 

oh, wait, this shit ain't logarithmic. Really, folks, why do you waste our time?!

Sat, 12/07/2013 - 17:25 | 4225111 Excursionist
Excursionist's picture

Notice the scale on the two y-axises in the chart.  In 1929 the break was about 50%.  The implication for this time around is a break of about 20% from mid-16,000 to mid-13,000.

Meh.

Having weathered the NASDAQ's break over a decade ago and more recently the 2008 / 2009 break, this prospect doesn't exactly blow my hair back.

Sat, 12/07/2013 - 17:29 | 4225121 PathForward
PathForward's picture

The level of governmental influence in the financial markets is different today than it was during 1929 – it’s *much* greater now. Therefore, I’m thinking the USG will probably do a significant amount of meddling in the future to prevent a crash like 1929. (It probably already has.) I agree that a crash will eventually hit, but this time it will likely include a more sudden drop than in 1929, because the upcoming crash will signal that the USG has lost control, and electronic trading systems will quickly reflect reality. The only way there will be a "relatively slow" crash like 1929, is if the USG decides to purposely orchestrate it.

Sat, 12/07/2013 - 17:41 | 4225141 frankTHE COIN
frankTHE COIN's picture

I see Your Point and I agree with you. We must be ready to grab profits fast. And if you are going to reverse and buy something cheap that has value and it won't go bankrupt you have to do that fast also. Remember, in 2008 some of those 3 x inverse Dow ETFs skyrocketed from $ 50.00 to $ $ 600 - $ 800 a share, but they quickly reversed n did'nt stay there that long.

Sun, 12/08/2013 - 11:54 | 4226636 DaddyO
DaddyO's picture

I'm curious, does your thinking take into account that there must be a market to trade into?

What if there are nothing but sellers?

What if TPTB halt all trading for "everyone's protection"?

I cashed out of the markets many years ago when it became clearer what was really going on and the FLEECING has now escalated to all time highs.

If you're going to grab profits, how do you beat the machine when it can front run you by decades?

DaddyO

 

Sun, 12/08/2013 - 12:40 | 4226718 Teddy Tenpole
Teddy Tenpole's picture

 

 

Cashed out years ago, great call!  Let me guess, down over 25% on your gold -- Doomer Douche!

Sun, 12/08/2013 - 13:34 | 4226778 RockyRacoon
RockyRacoon's picture

Being "down on your gold" would all depend upon the purchase date, no?  Your time horizons are way too short, demonstrating that your concept of the reason for holding gold is warped, to say the least.   Odd how the wildly inflated fiat dollar "value" of gold has changed over the years, while the gram-weight of the gold coin has stayed the same.   Doesn't that strike you as significant?

Sun, 12/08/2013 - 13:48 | 4226839 Teddy Tenpole
Teddy Tenpole's picture

 

 

It's a commodity dude.  Yes, a special one at that.  Better yet, it's a currency dude.  Yes, a special one at that.  You keep on rationalizing why you hold it when it's going down and we're all good.

 

Peace Out Douche

Sun, 12/08/2013 - 13:42 | 4226823 Kirk2NCC1701
Kirk2NCC1701's picture

In a world of "CB Synchronized Swimming", I'd simply expect them to end one set and "reset" by starting a new routine.

In the meantime, I'm betting that I'll be more fiscally profitable by investing in "the sun shining and the world spinning", than buying/building a doomsday shelter and hiding out in it.

Put another way:  At some point a man's gotta decide to be a man, and stop being angry or scared like a child.  For those poor souls who just can't help themselves, and must get their daily dose/therapy of fear or anger, well... there are always a plethora, a mini-world of sellers of anger & fear.  Both on the AM stations, and on the blog sites.

Neither Bears nor prayers will make you richer.  But only the latter will make you less miserable, or help you cope better and for less money than a Therapist.  And I'm not even 'religous/religulous'.  Therefore...

"Choose your Rx or choose your poison".  And, in case you don't know it, not choosing is a choice in itself: more of Status Quo.

Sun, 12/08/2013 - 14:08 | 4226886 PathForward
PathForward's picture

I agree that it’s important to keep a positive outlook – the sun will shine and the Earth will spin. It may be prudent, however, to keep a balanced approach to financial investing, since it’s hard to tell when certain living system levels (e.g., the USG) have grown to the point where they’re exerting too much centralized control, the imbalances they’ve created are unsustainable, their lifespans may therefore be ending, and the higher level emergent systems that we’re all part of may be headed towards metamorphosis. I’m not claiming to know the future - we’re part of a spectrum of living systems and it’s difficult/impossible to predict life.

Sun, 12/08/2013 - 13:55 | 4226859 johngaltfla
johngaltfla's picture

You can see the same pattern if you overlay 1984-1987. It is quite ominous and indications of a historic top; which is usually followed by a historic crash.

Sat, 12/07/2013 - 20:13 | 4225500 hunglow
hunglow's picture

I'm culminating

Sat, 12/07/2013 - 21:02 | 4225605 Uber Vandal
Uber Vandal's picture

That January 14, 2014 prediction is a bit odd when you consider the market decline that began on January 11, 1973 and lasted until December 6, 1974.

https://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market_crash

 

Sat, 12/07/2013 - 22:12 | 4225745 Jumbotron
Jumbotron's picture

This is a repeat of the same chart from just a few days ago.

My answer is still correct.  This chart is bullshit because the Fed in 1929 through the Depression did not engage in QEternity.  As long as QEternity is the economic law of the land there is NO where to go to find yield.  And QEternity WILL and MUST last until the currency crisis.......which WILL come.  But that day can be pushed WAY down the road.....a lot longer than we can imagine.

But 2020 is looming.  By then their are so many global macro-economic tsunamis coming by then and a little bit after that it will overwhelm QEternity.

Namely.......Peak Cheap Energy......Peak Cheap Credit......Peak Medicaid.....Peak Medicare......Peak Obamacare......Peak Student Loans......Peak Inflation on things that matter....like food.  Peak VA Benefits payout......Peak Disability......Peak (upside down peak) Labor Force Participation Rate......Peak Interest on National Debt.....Peak Old Folks (AGE) Wave......Peak Corruption in Government.......Peak Pension Implosion......Peak High Rental Rates on homes that STILL cannot sell.

But please....keep posting this chart.....I want everyone to see that red line BURST through the historical black line so we can get over the whole history rhymes meme.  We've NEVER had QEternity before.  We are writing a NEW SONG here for the FAT LADY.  But she will sing.....and it will be a brand new song.

Sun, 12/08/2013 - 01:33 | 4226144 lewy14
lewy14's picture

No fat lady. No song.

Just Millie Cyrus twerkin' a midget. Forever.

Sun, 12/08/2013 - 09:40 | 4226454 Jumbotron
Jumbotron's picture

You know ....I thought about going there.  But decided against it.  But it is certainly apropos in this day and age.  Sadly....I must upvote you.

Sun, 12/08/2013 - 13:54 | 4226856 Kirk2NCC1701
Kirk2NCC1701's picture

Yup!  The picture looks clear, Jumbotron. 

Also, the USD was not the Global Reserve Currency (GRC) in 1929, which allows them to blow a much, MUCH bigger balloon payment, by exporting our fiat confetti.  We also live in a Brave New Big Brother World, with space-age tech, which adds complexity (clouds the Crystal Ball). 

 

Sun, 12/08/2013 - 11:52 | 4226615 RSloane
RSloane's picture

We're not the only ones thinking 2014 is going to be one big stinker:

 http://economictimes.indiatimes.com/news/international/business/nobel-economics-winner-eugene-fama-says-risk-of-global-recession-in-2014/articleshow/27027871.cms

I swear this guy reads Zero Hedge.

Sat, 12/07/2013 - 16:41 | 4225002 Charles Wilson
Charles Wilson's picture

Sooo...When everybody starts wearing hats again, we'll know that the end is Nigh...

Sat, 12/07/2013 - 16:45 | 4225013 PacOps
PacOps's picture

Hopefully poised for a new beginning? Someone better have a good strategy - as the SEALS say ... hope is not a strategy.

Sat, 12/07/2013 - 17:00 | 4225062 Oldwood
Oldwood's picture

Maybe not, but it would appear is all we currently have and its not much at all. Actually I have none at all.

Sat, 12/07/2013 - 20:53 | 4225583 Pure Evil
Pure Evil's picture

Hope may not be a strategy, but it sure got the DoucheBag In Chief elected twice.

Sat, 12/07/2013 - 23:28 | 4225883 OneArmBandit
OneArmBandit's picture

COMPLAINING IS NOT A STRATEGY ALSO

Sat, 12/07/2013 - 16:52 | 4225040 Headbanger
Headbanger's picture

But where are the Flappers!?

Sat, 12/07/2013 - 16:56 | 4225054 RacerX
RacerX's picture

Twerkers?

Sat, 12/07/2013 - 16:59 | 4225063 Headbanger
Headbanger's picture

Close enough!    Here comes the crash then! 

But I think it already started.

Sat, 12/07/2013 - 17:51 | 4225177 stant
stant's picture

god that was hilarious!!! shot of burbon for that

Sat, 12/07/2013 - 17:01 | 4225065 Dr Benway
Dr Benway's picture

Lindsay Lohan getting out of the cab without underwear?

Sat, 12/07/2013 - 20:55 | 4225585 Pure Evil
Pure Evil's picture

Were the crabs pouring out all over the street?

Sat, 12/07/2013 - 22:45 | 4225813 Jumbotron
Jumbotron's picture

No self respecting crab would inhabit that shit.

Sun, 12/08/2013 - 00:48 | 4226048 validate
validate's picture

Link

Sun, 12/08/2013 - 08:13 | 4226394 RafterManFMJ
RafterManFMJ's picture

No more Flappers, just us Fappers...

Sun, 12/08/2013 - 11:19 | 4226568 Oldballplayer
Oldballplayer's picture

I started wearing a hat. I am going bald. Does this mean I am going broke?

Sat, 12/07/2013 - 16:45 | 4225011 AGAU
AGAU's picture

Great, judging by the 1929 chart there's still loads of upside potential.

Sat, 12/07/2013 - 18:45 | 4225323 BeanusCountus
BeanusCountus's picture

I see the chart as saying only another 10%.

Sat, 12/07/2013 - 19:05 | 4225367 Glasnost
Glasnost's picture

Chart numbers should be on log scale to even consider comparing them side by side...

Dow 200 to 375 is a 187.5% increase.
Dow 375 to 200 is a 47% drop. 

Dow 13200 to 17400 is around a 132% increase.
Dow 17400 to 13200 is about a 24% drop.

Sun, 12/08/2013 - 02:34 | 4226221 disabledvet
disabledvet's picture

how about when it goes to zero? "go to ebay"?

Sun, 12/08/2013 - 13:58 | 4226863 Kirk2NCC1701
Kirk2NCC1701's picture

That's when civilization ends. 

That class isn't just "down the hall".  It's "down the street".

Sat, 12/07/2013 - 16:46 | 4225014 hugovanderbubble
hugovanderbubble's picture

VIX 150%

Sat, 12/07/2013 - 16:46 | 4225020 Truther
Truther's picture

Got PHIZZZZ?

Sat, 12/07/2013 - 17:10 | 4225082 RaceToTheBottom
RaceToTheBottom's picture

Phzzz and VISA mixed.

https://www.perpetualassets.com/

Sat, 12/07/2013 - 16:49 | 4225029 SmittyinLA
SmittyinLA's picture

"On a pure price-analogue basis, it’s time to start worrying"

BS, that atatement only applies to equity purchasers that DON'T discriminate, look at XOM PE of 12.49

 

 


Sat, 12/07/2013 - 18:37 | 4225304 Doña K
Doña K's picture

Can you trust reporting?

Sat, 12/07/2013 - 16:51 | 4225032 eddiebe
eddiebe's picture

Today is differnt. It's worse.

Sat, 12/07/2013 - 16:50 | 4225035 Debeachesand Je...
Debeachesand Jerseyshores's picture

Also watch out for falling bodies in the next few months.

Sat, 12/07/2013 - 16:57 | 4225051 Dr Benway
Dr Benway's picture

I hope to see them hang before I see them fall

Sat, 12/07/2013 - 17:03 | 4225071 DaddyO
DaddyO's picture

While I share your desire, I wouldn't hold my breath as long as the printing press has power...

DaddyO

Sat, 12/07/2013 - 17:02 | 4225068 Oldwood
Oldwood's picture

So you think the fact that none of their windows actually open is an accident?

Sat, 12/07/2013 - 17:18 | 4225099 RaceToTheBottom
RaceToTheBottom's picture

If they don't jump, then push them....

Sat, 12/07/2013 - 17:24 | 4225110 css1971
css1971's picture

Just take 20 seconds to wrap some electrical cord round their necks first. It's just a matter of courtesy.

Sat, 12/07/2013 - 16:55 | 4225048 Oldwood
Oldwood's picture

Any idiot knows that history NEVER repeats itself and it is ALWAYS different this time.....really!

Sat, 12/07/2013 - 16:59 | 4225057 RacerX
RacerX's picture

That is a nice head & shoulders pattern.

Sun, 12/08/2013 - 08:14 | 4226396 RafterManFMJ
RafterManFMJ's picture

More of a Selsun Blue pattern, I think.

Sat, 12/07/2013 - 17:05 | 4225070 LMAO
LMAO's picture

Ooooh Nooo'sss another fucking chart overlay in the endless series of fucking chart "you are here" prognostications.

 

What a fucking waste.....yeah, yeah  ...... some day one of these... ....whatever.

 

 

 

 

Sat, 12/07/2013 - 17:13 | 4225089 JackT
JackT's picture

Still holding BitCoins?

Sat, 12/07/2013 - 17:19 | 4225105 LMAO
LMAO's picture

Never did and never will.... Is that you Fonestar? Turning each and every thread into a Bitcoin fuckfest!

Sun, 12/08/2013 - 08:17 | 4226397 RafterManFMJ
RafterManFMJ's picture

What is this, how you say, Bit ... Coin? Someone please tell me more?

Sat, 12/07/2013 - 17:46 | 4225166 quasimodo
quasimodo's picture

So you can actually hold bitcoins? Like metals?

Didn't think so

 

 

Sat, 12/07/2013 - 17:55 | 4225198 RacerX
RacerX's picture

That's what so great about bitcoins--you don't even have to PRINT them. Pretty ingenious if you ask me. /sarc

Sun, 12/08/2013 - 02:40 | 4226225 algol_dog
algol_dog's picture

So all we have to do is transpose a chart over another back in time, and we have a perfect prediction model. Ingenious! 

Looks like another 1/3 to go on that chart anyways. I'll take those gains ...

 

Sun, 12/08/2013 - 13:23 | 4226786 SeattleBruce
SeattleBruce's picture

And immediately translate your fiat gains into phyzzzzz - wow, you're good!

Sat, 12/07/2013 - 17:07 | 4225075 grid-b-gone
grid-b-gone's picture

If most of us are working for eventual free time and spending money, it's not complete idiocy, especially after recent corporate and municipal broken promises, to start coasting as early as possible.

After all, one can always opt to look for work again after a mid-career gap or time-out, but the chances of earning another pension after losing one are pretty slim.  

Sat, 12/07/2013 - 17:33 | 4225130 greatbeard
greatbeard's picture

>> to start coasting as early as possible.

I started three years ago at 55.  Just said fuck it, the race is not worth it.  I can't say that I haven't enjoyed the shit out of it.  I've done a number of things I never thought I'd get the chance.  It's been a wild ride and I'm not sure how it's going to turn out but I wouldn't change my mind if I had the chance.  But I'll tell you what, bailing out of the system isn't for sissies.

 

 

Sat, 12/07/2013 - 20:32 | 4225540 grid-b-gone
grid-b-gone's picture

I know a guy who was a few years away from his Yellow Freight pension, saw the danger, retired early, and avoided the deep cuts that came a few years later.

Two other friends got caught in the 2008 deep labor cuts. They are "coasting" to 62, but have spouses who could cover the insurance.

I'm a little younger and will probably hang on for the 67 yr, 8 months needed for full SS benefits (if they survive). I traded a high-stress Fortune 500 middle-management job for a P-T job and a small start-up company. I have so much control at each that there is very little stress.

I don't mind going another 15 years now that I have designed flexibility and control into the way I make my living. It helps that both endeavors give me direct customer contact with clients who are very appreciative. No more "What have you done for me lately?" and I'm first in line to benefit financially when going the extra mile for a customer.

I agree, though, bailing is not for sissies, I don't regret the move, and it has been a wild ride.  

Sun, 12/08/2013 - 12:29 | 4226696 FreeNewEnergy
FreeNewEnergy's picture

Coasting is what I've been doing since, well, 40? Actually, the internet saved my ass. Started up a website in 1999, never looked back. Thanks to Google and other ad opportunities, I've been semi-retired (some say retarded) since 2003, so, my coast began at 50.

Just turned 60 on Wednesday. Friday night a bunch of pals from HS got together to celebrate all our 60-year birthdays at once. A core crowd of about 20 people showed up. All had money (I could not buy a drink). Only a few cared about retirement, Obamacare, or just about anything else. Only two (and both are obese, BTW) had any kind of medical issues. Only ONE was retired, officially. One other was rich, so he could retire, but he's a workaholic, so, including me, three at age 60, from predominantly suburban upbringing (we all went to the same Catholic HS) had pretty much knocked it.

A few others had their own businesses and were doing well. Everybody seemed to hate the government to varying degrees, for various offenses. Nobody made their money from stocks, AFAIK.

My conclusion is that most of these people will live into their 80s, already have retirement packages and are expecting something from SS. Health care was a topic mostly off the table. All but the two mentioned above were pretty fit.

What is interesting about getting to this age and meeting with peers is the relative calm. It was almost as though I was the only one who thought that maybe a shearing was coming. Maybe rich guy and the others in their own business felt the same, but nobody talked about it. We were having too much fun.

My conclusion is that if a shearing is coming, about 2/3rds of these folks will be considerably worse off than the other 1/3. The 2/3rds worse off: those in regular jobs, with pensions, mostly, who've paid in and are expecting a return, starting in 2-5-6 years and the two with med issues (It's too bad for them, but those are the cards they're holding and I wish them well). Those who will be better off are the early retiree, me, the rich guy, and those in their own business (and spouses), about seven of us. We should be able to weather the storm better because we likely see what's coming as we have to deal with gov BS every day and need to stay informed, are prepared to make sacrifices and changes as the situation dictates and have proven to be self-reliant and resourceful. The rest will be whining over what they were "owed."

Just some personal observations, which I find more enlightening that chart porn overlays (kind of like photoshopping boobs on Miley Cyrus). Other anecdotal observations and theses around the ZH comments have been helpful and enjoyable.

Sun, 12/08/2013 - 13:27 | 4226796 SeattleBruce
SeattleBruce's picture

"If they survive" is right. Will any of us get even 10 cents on the current dollar (or what those City of Detroit pensioners ended up getting?)

Sun, 12/08/2013 - 08:19 | 4226401 RafterManFMJ
RafterManFMJ's picture

GreatBeard is your Avatar a selfie? Looks like you may have coasted your way to a box under a bridge.

Sun, 12/08/2013 - 08:35 | 4226406 Disenchanted
Disenchanted's picture

His avatar is 'Manifesto' Ted Kaczynski...aka Unabomber.

Sun, 12/08/2013 - 08:45 | 4226413 GetZeeGold
GetZeeGold's picture

 

 

Most people in Montana just called him that big city crazy bastard.....turns out they were right.

 

For the most part....they're just glad he's gone now.

Sun, 12/08/2013 - 12:04 | 4226671 Wen_Dat
Wen_Dat's picture

Ted is a hero in my book.

Sun, 12/08/2013 - 13:30 | 4226800 WarPony
WarPony's picture

TK was a fed 'asset' played in the news to get the press out of Jordan, Montana the day after the Militia went on radio in Lewiston promising a National rebellion if the feds killed any Freeman on the Clark ranch.

Sun, 12/08/2013 - 14:45 | 4226980 Wen_Dat
Wen_Dat's picture

Asset for that particular day or in general? Did not know that...

Sat, 12/07/2013 - 17:34 | 4225136 Papasmurf
Papasmurf's picture

Once you lost your seat in musical chairs, you won't find a seat again.  

Sat, 12/07/2013 - 17:15 | 4225094 frankTHE COIN
frankTHE COIN's picture

Anything out of the blue can trigger the crash. In 1987 on the Friday before Black Monday, we had our first 100 plus point drop. Then over the weekend, James Baker ( I think he was Secretary of State ) Declared that we would let the US Dollar float against the Duestche Mark. Because of the uncertainty of not knowing the dimensions of the float, on Monday the Crash began. Then Portfolio Insurance poured kerosene on the fire. Then the Specialist stopped answering their phones or making a market.
It can just come out of the Blue.

Sun, 12/08/2013 - 12:13 | 4226683 mojine
mojine's picture

Specialists is the plural of specialist. I don't know what started this disturbing trend of failure to form the correct plural of nouns ending in "st".
Guest - guests; dentist - dentists. Sorry for the intrusion. Carry on.

Sun, 12/08/2013 - 13:14 | 4226772 WarPony
WarPony's picture

True, but you're a few mile short . . . and my algorithm is bigger than yourn.

Sat, 12/07/2013 - 17:22 | 4225107 css1971
css1971's picture

Well, if you prevent banks from creating credit unbacked by currency then you pretty much limit the ability to creates booms and busts. It's the lack of 100% backing of credit which allows expansion.

Sat, 12/07/2013 - 21:05 | 4225614 grid-b-gone
grid-b-gone's picture

It's the lack of even 10% skin in the game that allows for eventual collapse.

The easier the credit, the more mal-investment.

The more leveraged mal-investment, the sooner the reset.

Sat, 12/07/2013 - 17:31 | 4225127 buzzsaw99
buzzsaw99's picture

Ludicrous.

Sat, 12/07/2013 - 17:41 | 4225151 Element
Element's picture

OT:

 

US spy agencies are busy blowing their foot off once again. These guys really are idiots when you get down to it. Their new emblem seems to be specifically designed to piss-off the entire planet, and turn people everywhere away from anything the US has to say. This sort of obnoxious crap will lead to the downgrading of all forms of international cooperation and support. The US seems quite determined to spit right in the face of everyone in the most offensive ways possible.

http://rt.com/usa/nro-satellite-octopus-emblem-854/

These idiots will soon be whining about why everyone on earth seems to hate the shit out of the united states.

Sat, 12/07/2013 - 17:57 | 4225204 Papasmurf
Papasmurf's picture

So they are in partnership with Goldman?

Sat, 12/07/2013 - 18:00 | 4225212 stant
stant's picture

its called picken a fight

Sat, 12/07/2013 - 18:00 | 4225214 Winston Churchill
Winston Churchill's picture

They hate the US anways now.The fear is fast evaporatig as well..

Passing as a cannuck won't work much longer either.

It seems Uncle Scam is succeeding in turning the US into a giant gulag of lepers.Prolly

the intention.You can't run, or hide.

 

 

Sat, 12/07/2013 - 19:58 | 4225464 SgtShaftoe
SgtShaftoe's picture

BWAHAHAHAHA!!!!

These fuckers have no idea the shitstorm they're going to bring down on their heads. Maybe God will have a sense of humor and drop a fusillade of meteors on these fuckers.

I hope we chase these people just as the nazis were chased, but we have a record of all the war crimes at the NSA now. The next snowden needs to leak all those responsible.

Sun, 12/08/2013 - 06:34 | 4226359 kurt
kurt's picture

Let's see. Where does the octopus live in the biological scheme of things? Only two out of tens of thousands of her eggs live to adulthood. Is she a top predator? Nope. Is she all knowing? Nope. Does she have a spine? Nope. She does skulk and hide under rocks. She can sqeeze into unlikely spaces. Most of all she makes good eating. Let's net, marlin spike, and eat this bitch!

Sun, 12/08/2013 - 11:31 | 4226590 Disenchanted
Disenchanted's picture

That octopus emblem/logo rivals Poindexter's TIA(aka IAO) office logo a decade ago.

TIA = Total Information Awareness

Sun, 12/08/2013 - 12:59 | 4226750 Element
Element's picture

Brits TV made an ominous fictional drama program about a new computer spying system called TIA few years back.

http://en.wikipedia.org/wiki/The_Last_Enemy_%28TV_series%29

Mon, 12/09/2013 - 09:08 | 4228834 Disenchanted
Disenchanted's picture

I wonder where they got the idea...

 

 

Total Information Awareness (TIA) was a program of the US Information Awareness Office. It was operated from February until May 2003

 

The Last Enemy is a 5-part BBC television drama starring Benedict Cumberbatch and featuring Robert Carlyle and Max Beesley. It first aired on 17 February 2008.

Sat, 12/07/2013 - 17:49 | 4225179 debtor of last ...
debtor of last resort's picture

Stocks crashing is the moment to reshuffle monetary (reserve) balances? The fuse is lit.

Sat, 12/07/2013 - 17:54 | 4225191 falak pema
falak pema's picture

Any truth in this WSJ article ?  :

Fed Closes In on Bond Exit - WSJ.com

Do NOT follow this link or you will be banned from the site!