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.”
no
Market watch posted the same article as WSJ all the while posting the Analogy with the 1929 situation posted here on ZH.
Just saying...comparison is not reason, and the PTB are pretty gung ho right now with their hands on the levers of power and their pockets full of hey presto fiat!
Who knows when this will topple!
The chart that’s scaring Wall Street - Mark Hulbert - MarketWatch
Jobs report moves Fed closer to ‘QE’ taper - MarketWatch
so these MSM financial blog sites hedge their bets! I guess they have no clue about whats up ahead.
The Rat has spoken...
Yellen 2014 will cause quite a stir and don't think anyone will remember Benny. Fiat printers will probably achieve light speed.
Poor Yellen. Clueless lamb led to the slaughter. So excited and proud about being the first female Fed chairperson. The "Bearded Potato" will be in his bunker when the SHTF and poor Janet will be dealing with the "froth". The lack of Wall Street confidence in Yellen taking control of the money chopper may well turn out to be the catalyst that kicks off the next Great Depression.
Fate the Magnificent
"Push the Button, Max"
it was the collapse of the bond market in 31 that really did it
I've taken both call and put options for March on the NASDAQ. I figure on flogging the calls in early February and the puts in early March both deep in the money ;)
It's called "3 Peaks and a Doomed House". Either that or Zimbabwe (douches).
The indeces would correct all the way back to where they were at the beginning of 2013!? That's it?? Run for your lives!
Just thought I'd jot down the script. The taper is already priced in so the actual announcement of it may create some vol. but the algos will know what to do. The key will be the narrative being able to absorb tapering and we likely get some therefore fearless bulls. It is always at that moment where there is nothing in sight...
The money on the sidelines combined with a continued sell-off in Treasuries will be the dry powder that the talking heads reference. Shorts are reloading here on the ZH Doomer Douche inspired, "they have to print moar" non-taper call. And man are they are gonna get fried! So ya, the chart could very well therefore look like the one above.
The Fed can blame the bond market sell off on the taper but defend it in the name of prudence. It also alllows Bernanke to hand off policy at neutral (albeit the new neutral) as is Fed tradition. Old Yellen will have the Street and Capitol Hill begging him to ease as his first action.
The real 'problem' is that Treasuries are going to continue to sell off as the Pedro-Dolla is abandoned. Yellen brings in an unconventional printing policy as this occurs -- not sure what but they keep telling us about more tools in the tool kit.
Here's the punchline girls: the Fed can really only affect the slope of the yield curve. A shift in the curve up is the swan (er, war).
Peace Out Douches
ok yeah. i also read the end of the book after a few chapters to see what the end is.
Janet Yellen is a woman. But I can understand your misunderstanding as...
She looks like a man because she is a Bull Dyke Bitch from hell...
The Market will implode as the politcizinng of the Debt Limit and possible Bond Market Downgrades start to grab everyone's attention...again.
I actually want them to Taper in congruence with Credit Agency Downgrades so that Interest Rates on the Ten Year really soar to the Moon. Perhaps that may stimulate some Fiscal Restraint and serious talks about decreasing the Government Spending in WashingTOON.
Maybe...if we are really lucky...it just may bring enough uncontrollable instability to the Credit Default Swap Derivatives Market so that it implodes and brings about absolute Financial Destruction with that detonation.
It may be a very Bearish Bond Market in First Quarter 2014. (That is the 1931 Bond Market Implosion to go along with that chart.)
Get rid of the Fraud...Collapse baby collapse.
...on the same page. Things won't collapse like all the Doomer Douchebags on here keep wishing for however. You make a particularly good point about ping ponging the political hot potato of showing some fiscal constraint back into the Congress' court. Given that the Fed runs things it's a perfect F U with election motives coming into view.
The Fed owns all these bonds so they want some fiscal constraint now. This is why you never sign up with a Joo Banker... look at Africa and/ or many EMs. Once those cunts loan you the money they force you into austerity. The U.S. will be the same, they own us now and could give a fuck about opportunity and growth. The Fed doesn't truly want inflation.
The point is they taper and Congress takes the dive on the fiscal shit storm that's brewing. Watch, everybody will be begging the Fed to ease into Q2!
Know your enemy Douches!!!
"...coup de whiskey..." huh?
How'd that work out Mr. Strong?
Rattle some chains in Ben and Yellen's bedroom tonight, will you?
So Ben and Jan are in bed together? Strange.
How would 2 rattlesnakes have sex? Is there a printer involved?
How would 2 rattlesnakes have sex?
Curious. And yet, they manage it...
They were born to couple
I would guess the Serpent Position. I think it's one of the Kama Sutra positions.
niice...
Sex? Oh, you mean when they blow each other.
Cross Asset Returns: 2013 Versus 2012 - Business Insider
I find this article very disturbing and when Deutsche Bank says :
In the end 2013 went broadly according to plan, presuming global policymakers indeed do operate with a plan in mind. Stellar returns in core market equities, led by Japan but including the European periphery, were balanced by nondescript mildly negative returns in the less risky asset classes.
The Performance Of Global Markets In 2013 Was A Necessary Response To What Happened In 2012.
So...CBs and PDs wanted to make money in 2013 to recoup from 2012...and damn the consequences if it compromised the economy and CBs further...
If that is not an admission of forward planning by Oligarchs to skew the market I don't know what is...
Not a word about the real economy and P/E criteria and growth; all about plan to recoup assets from 2012 attrition!
Bullish.
WE got a ways up to go before sell off mode activated.
Taper around Jan 20th.
I expect to be see a crowd like that very soon on my way to work. I walk right by the NYSE from the subway. Thankfully, I am in medical malpractice insurance and not in financial "services".
things are different this time. the fed is now monetizing 85 bil a month. the market can and will go up. look at what happened during the debt ceiling showdown. before you down vote me, im not defending this. These policies will eventually result in the downfall of the dollar, but its not possible to predict a downfall because the fed can and will increase QE to counteract any market downturn. It will work until it doesnt
Sorry. Not going to happen. Again. More disappointment for perma-bears.
aren't these price comparison charts funny? not until two days ago Hugh Hendry made a bullish one: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/12/20131205_hendry1.jpg
I would really like to see a collection of charts that pundits so freely push left and right :D it will be a lot of laugh, crash or not
"well into an economic expansion "
???
We are NOT well into an economic expansion.
The author does not realize that we are in an ongoing depression since 2008, and this instead of worrying about a crash like in 1929, 2008, 1921, etc., he should be worrying about the policies that turn a crash into an ongoing depression, but if he can't even see the one he is in the middle of ...
A digital crash today just happens faster.
ZH should go full retard and become a perma-bull site. Come on lets get stupid crazy
But then Tyler and all the members of this Fight Club will get lynched when SHTF.
Yoo-hoo... dont make a U turn and be a sheep or a ewe
or Hugh might be accYewsed of channeling You Hendry.
I like this article. Not because it is "right on", but because it may well rhyme with right on. The first obviously important observation is... you can shove that red line back 6 to 9 months and still make the same observations. Which means, the break could be 9 or even 12 months later than implied by this article.
I do not believe the break will come BEFORE January as shown by this article, because the predators-that-be will literally do ANYTHING to achieve what are two of their highest priority goals for 2013, namely:
#1: Make absolutely certain to have the stock market much higher by year end, because they intend to scare regular folks out of stocks in order to make them declare taxable gains for 2013, thereby ripping them off in taxation.
#2: Make absolutely certain to manipulate gold and silver so much lower by year end, because they intend to put a deep, blood red mark on gold and silver to crush the positive PR generated by their 12 straight years of gains. The predators-that-be would rather shoot themselves than allow gold and silver be up in 2013.
Having expressed these two opinions (or perhaps facts), note the following qualifications and considerations.
About #1. Understand that my own observation above (their potential ability to extend this run one more year (at most)) indicates they could attempt to extend the run in insane speculative gains until January 2015, at which point, look out below for sure! So while I consider the prediction of this article quite plausible (early 2014), it is not guaranteed... they might try to squeeze out another calendar year. But I sure as hell wouldn't count on that, folks!
About #2. They have thoroughly trashed the reputation of precious metals in the eyes of everyone except the most dedicated gold/silver bugs, and the most dedicated reality bugs. HOWEVER, this may or MAY NOT be a sign to back up and trucks and load up. Why? Because recent ZH articles have demonstrated that margin is at an all time high (which is how markets get to all time highs). We already know what happens when massively-margined markets collapse --- people liquidate [just about] everything to cover margin calls, which forces down precious metals too, which creates a downturn, which creates a positive feedback that drives the metals (and miners) down evey further.
However, if one waits until this has happened, Q1 or Q2 of 2014 (or 2015) could be the most unbelievably awesome time to pick up gold, silver and miner stocks at unbelievably low prices. Given the horrific bear market in miner stocks today, this event could make late 2008 look boring for everyone who wants to grab mining stocks at insanely cheap prices. But everyone who already HAS gold, silver or miners would have to bite their lips BIG TIME while the crash happens, or better yet, buy put options on their favorite goodies during the collapse, so they have lots of profits to buy with near the bottom. Otherwise, they will have to suffer BIG TIME for 2, 3, 4 years while waiting for those markets to recover.
Now, which will it be... collapse in 2014 or 2015? My educated guess is 2014. Why? There is just too much unavoidable bad coming in 2014 no matter what, so I figure the predators-that-be prefer to get it over with WELL before the next presidential elections. For one thing, the entire health-care and health-insurance system is almost certain to melt down in 2014 due to Obamacare. I suppose it is possible they could unilaterally take many unconstitutional and unlawful measures to delay various provisions and funnel unlimited federal-reserve fiat paper to health-insurers to prop them up for one more year, but that seems so extreme as to be unlikely at this point.
If most people sign up for Obamacare, the economy is utterly destroyed by 60% of all "spending-money" being sucked up by insane, egregious health-insurance fees, which assures the rest of the economy goes straight down the toilet.
If most people refuse to sign up for Obamacare, all health-insurers go bankrupt within a few months, because almost ALL their customers have expensive pre-existing health-care problems, making it sensible for them to sign up for insurance. In which case their expenses massively overwhelm their revenues. This will be a fantastic, wonderful outcome, but the predators-that-be will not stand for this. One way or other they will destroy the economy to keep these health-insurance predators alive and well. Of course these predators-DBA-insurers will refuse to pay their bills, say they are paying late, just refuse to cover what they are supposed to cover, and so forth. But this just shifts the disaster onto doctors, clinics, hospitals, pharmacies, test facilities, and everyone else who performs medical services. And THAT is not good for the economy either.
We already know Obamacare WILL create a disaster. Just look at articles like "70% of doctors in California will not participate", and other articles that measure how many doctors intend to flat out retire or switch professions to avoid being manipulated by Obamacare regulations.
So... I'm guessing 2014 is the collapse. But don't bet your life on it.
BTW, everyone who says "you don't know the power of the dark side"... yeah we get it. What they mean (and sometime say) is, "don't bet against the fed", or "the fed can do or offset anything". Yes, we get it. But what we get from recent evidenc is... they can indeed manipulate things a LONG way... and further than many of us imagined. But what you predator lovers don't get is... there are limits.
1929 was one of those limits.
And 2014 or 2015 is another of those limits.
To be sure, the predators-DBA-fed and predators-DBA-government do have a LOT more power to manipulate things today compared to 1929. You are correct about that much. However, just look at the state of reality and economy in 1929 and compare what they had to work with then, with what they have to work with now. Look at debt levels in the economy in 1929. They were NOTHING in comparison. Look at the economy in 1929... mostly built upon productive of real, physical goods that people need - versus today, mostly useless paper-pushing. Look at "all things considered" in 1929 and in 2014... and draw your own conclusions.
And do understand. The top-level predators in this world know exactly what's coming before it hits. They are let in on what will happen by the predators-that-be who actually pull the switches, and manipulate everything. Those predators-that-be know when they need to switch scams. So don't expect any top-level predator to lose money in the collapse. They will own all the short positions before the collapse, and absolutely clean up by the collapse. They'll do what YOU should do... get very short at the right time, ride it down, then liquidate and buy ultra-cheap assets (gold, silver, miners, and lots of others). And if you're smart, you'll be living far outside the USSA or other major western predator-central nations, and get most of your assets in to real, physical goods buried far in the boonies where only you know where.
Oh, one final comment about gold and silver. I believe the predators have invested a lot of ammo in 2013 to push prices down as far as they have while simultaneously demand has skyrocketed, and massive quantities of physical have drained from west to east (but also into the pockets of the predators-that-be who know what comes after they remove their paper manipulations). So it is not clear whether the predators-that-be will even try to hold prices down in 2014. I mean, by means of the paper market they certainly can, but outflows to places they will never be able to buy back from will continue to increase, and risk a complete meltdown in the paper markets when they can no longer prevent "failure to deliver" problems... which is coming unless they give up. But if gold and silver get caught in the downdraft of a market and margin meltdown, that will be the most awesome time since $35 and $247 gold to back up the truck, then hide and bury securely.
I concur with a number of your points, but differ strongly with one of your central predictions. While it is likely that gold will be sucked down in an initial downdraft as a result of markets crashing, I see virtually no chance that it will take a long time for it to recover, and expect that it will rather quickly reverse and inexorably launch to new highs.
The next crisis will most assuredly wake up the masses to the folly of trusting paper promises, and, speaking of history, what asset class do you suppose those with capital to shift will choose under those circumstances?
I am not suggesting that it won't be an excellent time to accumulate gold, only that the window of opportunity is likely to be rather narrow.
That is very possible, that the suck-down in PMs will only last weeks or months, not a year or three. And perhaps more important, the suck-down might not even happen depending on how quickly and dramatically the predators-that-be (in the federal reserve and government) respond. That plus the timing and impact of #2 above... an end or substantial reduction of manipulation of precious metal prices.
So I would never suggest anyone sell their physical metals, but paper-shorting very carefully for a short time might be a prudent way to protect against temporary psychological depression (and temptation to sell physical PMs), while building up cash to buy a lot more at super low prices.
Here are some interesting comments from someone who should know to support your conclusion (his guess is 3 to 6 months):
http://www.ingoldwetrust.ch/alex-stanczyk-physical-supply-never-been-tighter
We simply have no way to be CERTAIN when they will give up on manipulation. The basic information says soon (1 to 6 months), but actually depends on how completely they are willing to empty the remaining corners of Fort Knox, federal reserve vaults, and other western central bank vaults. Obviously they're already in trouble, or they wouldn't have told Germany they must wait 7 years for return of only 1/3 of their freaking gold.
PS: One additional reason for them to manipulate gold down... is so they can buy the physical gold they need to ship back to Germany. But if they try to keep this manipulation going for 6 more years, they'll totally blow up the market (or attempt to re-institute confiscation).
Does shit stick to your fur?
Sorry, English isn't my native language, and I don't understand less common expressions, including yours.
Bear and a rabbit in the woods.
Bear wants to go make a poops because he had a big lunch.
Turns to the rabbit. "Does shit stick to your fur?"
Rabbit replies "No, it doesn't"
Bear takes a poop, grabs the rabbit to wipe his bum.
-
In the sense used prior, you are the rabbit, this avatar is the bear. In reference to how you perceive the world as overly complex.
Try to reason without using so many paragraphs. Less is more.
I still don't get it, but that's okay.
Also, I don't think the world is overly complex.
In fact, I think that once one identifies the fundamentals in any topic, the reality that matters is usually very simple.
However, figuring out what are the simple fundamentals in any given topic is sometimes as messy, complex and non-trivial as the concluses are simple and obvious (to those who understand).
So sometimes I just do post just one or two sentences on ZH. Other times I could post just one or two sentences, but prefer to lay out the complexity behind my simple conclusions... especially when I'm not so sure of my conclusions, or sufficient variables exist to render any conclusion an educated guess. Like in this case.
Nobody else gets it either.
The earth is complex but we are all humans,
Treat each other with respect and dignity,
That is all any human truly wants.
Wisdom is simple.
Stack On
HonestAnn I would like to make gentle insemination to you; please PM me ASAP.
Respect.
Honetann
Just Ignore Him.
Ignore Ignorance
Don't Feed The Trolls. Paid or otherwise
BTW, 2015.75 is Martin Armstrong's. Major date. He sees Gold going up then.
http://armstrongeconomics.com/armstrong_economics_blog/
"In the sense used prior", magnetic silver, you are the substance wiped off of the bear.
Easy enough for you to insult honestann's interesting post, which you are too stupid and lazy to read with care. Easier than for you to add anything with any content.
honestann, it is Saturday night. This guy has gotten no attention from any females. By attacking a (likely) female with a random insult on a blog, he is getting the only female attention that he will get this year. That is what his post is all about. Don't try to dig deeper; there's nothing else.
"interesting post" you dumb fuck... LOL.... you keep being interested by little comments on ZH....
I doubt if English is magnetic_silver's native language...
More of an 'urban-subculture' patois with 'tude...
Nice avatar though - I must admit...
Great comments. I especially liked your description of the health care bubble.
Re Why (a crash in) 2014?
'They' like to celebrate anniversaries - especillly bigguns.... like the one that kicked-off Aug 1914
How did I forget that one?
Nuke the markets, then buy everything of value at pennies on the dollar with unearned gains and/or unlimited 0% loans from the federal reserve. Excellent point!
HA always on the ball ;)
Just realised the sync. of bigguns (meaning 'big ones' but literally Big Guns) and Aug 1914.....
But what about the (bigger?) anniversary coming Christmas Eve Eve.
If we have about an 8 year crash cycle, it should crash in 2016, after going much higher.
I think TPTB will want it to crash before a Presidential election, instead of a mere Midterm, but I could be wrong.
The above article graph is very misleading. The magnitude of the scales are different, and stock graphs are very self-similar at many scales. The 1929 graph rose about a factor of 2, and the current is up less than 30% over the same time scale.
I think the crash, when it comes, will start outside the US. If so, this will make it very unpredictable for US investors.
These 'predators' all breathe leftist oxygen and as such will not flush the market unless obamacare starts the same spiral your toilet takes daily. Obamacare is the canary in the stackers mine and all the computer processing power in the NSA hack palace cannot manipulate that outcome.
Are you still researching BitCoins? Still can't wrap your head around it? Do you chew your own food?
fuck you and your bitcoin tulips.
1F4792XrPCwvBN4hxARjzK2qHrb5cCMraj
these people are too old to ever understand it, best to leave them to their pureed carrots and golf claps when they clank their copper ingots together to feel smug.
The reason old people keep silent and never correct young raving lunatics is because it doesn't pay squat.......and they know it.
Yeah, I'm an old fuck and I'll just stick to stacking PM's, food, guns, and ammo. Fuck your bitcoin and your revolution.
4 Years after the launch anyone who still doesn't get what bitcoin and bitcoin network are, then reply so we can know how to trim this fat heard of corn syrup junkies.
Coast to Coast AM has a good first half tonight. Dietrich relates how war was used to return the country to economic prosperity.
Douglas Dietrich will discuss what his research has uncovered about the attack on Pearl Harbor and how FDR's administration provoked Japan and led the United States into war in order to pull the country out of the Great Depression.
WOW... WAR equating prosperity is for fucken ignorant people.
War causes death of bodies. The bodies have tremendous more value alive than dead. What a bunch of bunk.
Perhaps you should study history as it has a habit of repeating itself.
In 1929, crowds gathered on Wall Street and banksters jumped out of windows. This time IS different. Crowds will be dispersed with force and banksters will be handed trillions of USD to cover their loses. We saw it in 2008. We will see it again soon. But next time TPTB will have drones and an abundance of private prisons for the serfs who dare protest. And billions of JHP's in case things really get ugly.
For sure, and they make those ATM's spit out french fries, fruits, gasoline now right?
The revolution is happening now. It's madness and the time is now for change, not in 1000 years.
Why delay the fucken change?
Banksters are as vulnerable as ever being dependant on technology that only the geeks and nerds truly master. The rest are posers.
With a paper and pen system they were fucking up the masses good, but they couldn't do as much fucking volumen as when they brought in the computers.
But the greedy fucks, they did it to themselves, they pulled in the trojan horse known as the digital age, where stupid dies and bright lives on.
It's stupid to steal wealth and then create poverty when there can be abundance if the resources are properly managed. This is self evident to anyone that has caculated the amount of resoruces the world is using for its military aresenal on an annual basis.
I'm just glad your silver is magnetic and mine isn't.
And don't forget the MRAP's-surplus military vehicles now in the hands of police forces.
.
Last count, 2700 from DHS, and an untold number from DOD. ~ 3000 contiguous counties and I'm guessing an average of 5 MRAPs per
So keep stacking H&K's...
Another Benjamin in NY WTF!!?? Hurry up and get Janet Yellen in there. /sarc
1929 was still during the gold standard. Money was at least somewhat restrained.
Now the Fed is creating all the money it has to to put off a crash.
I suspect it will continue with even more QE is things get dicey.
In September we learned that the Fed cannot stop, or even hint at tapering. Notice how it is not Ben or Janet hinting this time, just a couple of minor figures. This time we are headed for Zimbabwe highs.
The proof is there that they cannot change course. The only way is onward.
We may not see DOW 20,000 because something could snap first but if it doesn't snap there is nothing to prevent the creation of enough cash to send the indicies to much higher levels. This is what Hendry sees. The fundemantals do not matter. All that matters is that the Fed is printing and the only place to go is the market. Bonds must be bought because the derivative market will explode if the 10 year hits 3%.
I refuse to try to ride and hope I know when to hop off. Gold on the sidelines is the best way to play this. It won't be as fun as watching your investments skyrocket...but when the whole thing collapses at least what I have will still have value and with the dollar gone it may well be the only thing that has value.
good luck to all...just remember, when Zimbabwe failed the entire market in Zim dollar value would not buy 3 eggs.
And one more thing tonight.
Last night the official government weather station two miles from my home recorded a temperature of -39C with windchill of -50C.
It's coming your way bitchez!
Burn gaz.
Stack On
Are you chilly yet fuckers?
Yeh Haw
Burn Gaz.
My last message said denial of service. Fuckers are a bit sensitive, stack fuel for a hard winter, bitchez.
Stack On
Wind chill of -57F way up here...Snot freezing in nose while starting car. It's been a few years since a snap like this and I find it invigorating. Some say I'm crazy.
Cut wood.
The only fuel that warms you more than once.
The graph is misleading. The current period is not tracking 1929. Look at the percentage movements of the two indices rather than the seeming lock step movement. The graph is also wrong because when our version of 1929 hits it will the opening act to Armagedon.
gives the same move, just a matter of proportion (slope in scatterplot, log-scale both axes).
policies never solve the bussines cycle?
policies CAUSE the bussines cycle. It? 4 years !
The cycle swings fear back to greed.
Earth calling Hugh Hendry. Shame, he had it right.
I don't have much faith in analogs.
They will just close the markets at the first sign of a 1k drop. Repeat after me...there is no spoon, or huh, market.
The article graph is very misleading. Look at the scales on the right and left hand sides. The 1929 curve rose by a factor of 2 and the current graph is up by about 30%. Stock price graphs can be self-similar at many scales, and if you want to make an analogy to 1929, you have to imagine the QE-pumped rise to accelerate first. If they keep the QE up for a few more years, it may do just that!!
it's not misleading to me. It's overlaid and matches. You just match scale to scale. You can do that with a scatterplot.
If you want to do it on log-scale or linear-scale both can be useful, linear more for options, log-scale more for % multipliers.
The 1920's already got their credit boost, as we have, so it's as good a guess as any this move will happen http://flic.kr/p/enJ7Cs. My own time-series repeating pattern (which requires re-scaling price & time) would put SPY to around 80 eventually, maybe in 12-18 months, DOW to 6600 or 7000 or so.
The smartest people in the room confuse money with wealth. They may be able to print dollars, but they can't print a competent web site, nor print a gas-to-liquids project, nor print the replacement for the iPhone.
Come on dude, 3D printing!!
Actually with printable plastic transistors & printable graphite circuits & stamped plastic casings maybe they could.
If it cost 1/10th the iphone cost & even only did half as well for performance and weighed 1/100th the current weight it might just pick up.
iphones have no value to me any more than dollars do or bitcoins, however.
They are weak garbage, overpriced & spy on you.
My old prepaid flip phone is more durable & reliable and doesn't spy on me. The radio triangulation works as with all broadcasting but with so many gps-enabled iTargets I'm lesser on the priority list.
My wife's employer is changing firms that manage her 401K and the funds there will be a blackout period from Dec 26, 2013 until January 14, 2014. At this time you cannot change any investments you are in at the time of the blackout or make any withdrawals. Time to get out of equities and into cash methinks.
I remember the same thing happening to me.
Does it not strike you as odd in the age of fiber transmission to have a blackout period of weeks instead of hours? What no redundancy?
Better print some hard copies of that cash balance before the switch methinks.
So basically we will never have a 'crash' again with QEternity?
According to that chart, history repeating itself to January 2014 DJIA crash of 14000. Cry me a river.
still money to be made. It's a big enough move a tiny drop of cash on an inverse etf like vxx, hvu, would do well. SPY could hit 110 to 120, big for spy puts but the timing could be bad relative to expiry, whereas hvu has no time limit. 19.8444 19.8444 / 110 11 = 1,974.82 and 19.8444 19.8444 / 120 11 = 758.32
not bad given hvu closed at 8.34 (CAD).
I project SPY may still tap up to 183 before making a big drop putting HVU at 7.31/share. I'd happily drop 250 on that to later take about 59k in profit at such estimated drop levels. Even just half-way there would be fine (exit at hvu = 991.57 or SPY= 117 from that big one). Or half-way from the small one is OK too, SPY=110 profit=$22,500 so cut that in half to 11250 on 30 hvu shares, 383 each, SPY hits 127.68 dropping from 183 for entry.
Jesse Livermore realized a 100 million dollar profit when the market crashed in October of 1929. That's 2 billion dollars in today's silver prices or somewhere near that. He was a happy camper that day.
The first time I saw the photo of the German woman loading her cook stove with Reichsmarks was in an old edition of the local newspaper on microfiche at the local library.
Good info in the old newspapers. Had to go and read about the Crash of 1929 as reported at that time.
Woolworth's stock price was 189 dollars per share in October or 1929. CP Railroad was at 236 dollars per share. Take that times 20 and you see today's mad world on Wall Street.
The dry years were during the Dirty Thirtiies. 25 out of 50 states have record high temperatures during the decade of the 1930s. Yes, I know, Haiwaii and Alaska were territories, not states, but they count today as states.
The land was dry and it wasn't about to rain like a cow pissin' on a flat rock, so farmers went broke and didn't have any money. Makes it hard to pay back the money the farmer owes that the banker loaned him. Penny auctions took place when farmers were foreclosed. Bankers hated penny auctions.
If you have two hydraulic cylinders with 2 foot shafts, you can devise a new and improved guillotine with 2 cutting blades for an even cut, automate the works and eliminate the necessary evil of an executioner. A tractor to power the hydraulic pump to get the hydraulic fluid pushing the shaft with plenty of pressure; God knows how many you would need. Gravity fed Guillotine is ok, but the new and improved post-modern version is more efficient. The French used the Guillotine up until 1977, so it remains an entire possibility to revive its use.
Pneumatics my friend. a compressor can be run off a generator. Forget the splashy Guillotine: that is more for you, the watcher, than the sake of efficient dispatch of bankers, politicians, and lawyers. Rather, the simple pneumatic slug hammer used to kill pigs. Wham! Bang bang on the head, bang bang.
Lasvegas:
You have it right. You can't predict this market because it's totally rigged. Chart analyse your asses off but it won't matter unless you get lucky or you're in the inner circle. The only way to win is not to play. Remove counterparty risk,just avoid gettting totally fucked if you can. Me, I plan on hard assets, not just pms but base metals, some re outside the home, tools and guns. Not gonna make money with any of those, just keep what I have rather than have it stolen in "the market".
BTW, going to vegas today for a few days. Counting cards not illegal and not hard. Gonna do battlefield vegas too. Fully auto weapons, fuck yeah. Spend some time with my brother who's not in good health. I'm also certain you get a more fair shake in vegas than in wall street. At least they don't change the rules mid game.
Fuck the markets, fuck te fed.
The only "fair shake" in Las Vegas is done when you order a vodka martini.
Bullshit. DOW 50,000! S&P 10,000.
1 berzillion kerjillion fwazeeelion!
"They say those who forget the lessons of history are doomed to repeat them. We’ve seen that maxim made true time and again."
Not this time. They know the lessons of history and willfully and deliberately chose to ignore them for personal gain.
Greenspan wrote in 1967 that 1920's FED policy lead into the Great Depression. He not only ignored what he knew, he doubled down. Bernanke wrote in 1988 that QE doesn't work. We are now on QE4.
NO LESSONS HAVE BEEN FORGOTTEN
Three peaks and a domed house. This isn't the first one since 1929.
LOL. Chart pictography put to words. Predicts nothing. The math of the circumstances predicts much more accurately. Scatterplot it.
"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."
Bernanke wrote in 1988 that QE does not work. What Bernanke is doing is not a mistake of history. Bernanke knows history. Bernanke is working a scam.
This time is a lot different: Asia out-QE'ing the FED by 4-1 (?). There's more liquidity where that came from.
When the SHTF in 2008 myself and my
own concurred we won't be the first
to go really heavily hedged but we've
no choice but to do it anyway.
It would be of no intended effect
unless it was all at once as a block
for its own sake.
We put it in place. We knew that we
were naked to being a little early or
late--or wrong.
But we also knew for us it would be
a financially tumultuous year, thanks
to a bankers' mortgage scheme gone
bust, but at least the real crisis
was quite entirely ended.
Our preceding posture, essentially
a default decision in relation to the
new information, was also being
naked, while nearly entirely "long."
We knew we could guage the real
extremes of pessimism/optimism,
and trim the positions accordingly,
removing hedge with the former,
adding with the latter. We knew
we could conceivably come out
ahead, not simply hedged.
It did work to our net gain, modestly, though simply
playing video poker would've been
more fun than scrambling into the
casino economy to adapt to the
compulsive gamblers who privatized
the banking sector.
Because the banks themselves were
caught with unreliable counterparties,
those today interested in hedging in
advance can't ignore the same concern.
Obviously, the Fed's artificially
bought the banks' bubble, mainly to the
benefit of the banks, and so something
like a replay of 2008 has to be within
the broad risk view.
One can at least sell a willingness to
buy a hedge vehicle at a lower price,
knowing they'd want it anyway, if not
even at today's price.
Then, even if there's no counterparty
solvent at exercise time, the option
seller nonetheless keeps at least the
premium (some gainful consolation though
it leaves the would be hedger yet
unhedged.)
I give no advice, make no forecast, and
I'm unable to know tonight's weather
until it happens. The above describes
vehicles not suited for many/most people,
and in particular strategy preposterously
risky particularly lest cash be set aside
to cover what could prove a losing
position nonetheless.
It's simply a shame we lack fiscal and
monetary policy grounded on seeking
a stong currency and strong wages
reflecting a people's high worth, in
turn reflecting a cultural deep love of
rich public education and free enterprise
based but systematically rationalized,
and not at all privatized, health care, and
a strong commitment to collective bargaining
as an effective force.
Remarkably, Wall Street's still
blaming the yuan.
The Chinese HAVE been raising the
minimum wage and would LOVE to see
Wall Street facilitate the yuan's
becoming reserve currency.
What sane leaders would do if China had
an immense advantage would
say:
if a co's importing $1/2T in Chinese goods
annually while not paying a living wage to
its workers, as some see it, then that
co. would be better operated under a
corporate charter such as that which
existed until earlier in the 20th Century:
it must show some overall net benefit to the community
for its existence. And it should have to
face assured, effective collective bargaining,
even if the latter needs some manner
of propping.
Then, if there's a major trade disadvantage
between 2 nations, instead of going
mass homicidal, the leaders of the disadvantaged
one, at the very worst, need only indicate:
you know, we've shafted education for some
time now, cause we're just a bunch of lobbyists,
and so y'all are just goin' to have to
give us a bit of a manageable break for a short
while here, while we repair that error.
In one significant way, this current economic climate has absolutely no resemblance to 1929. The difference is that the international bankers - once parasites on an economic system and once counsels to the kings, presidents and parliaments - are now the kings.
They have graduated from parasite to tyrant. And they intend…to take it all. Their mechanism and their intentions are clear: it’s the Federal Reserve System - one hundred years of increasing destruction that has now come to its climax as Lord Acton said it would, that ultimate battle, the people versus the banks.
One look at the Congress of the United States will tell you all you need to know about who runs the world. It’s not a conspiratorial theory that the people have lost their freedom. Will they now lose their country?
JS Kim, founder and Managing Director of SmartKnowledgeU, described in January on ZH the “nine step process bankers have used to enslave us all with nary a peep of resistance until recent times. Hopefully, he said, “recognition of this process can help us to free ourselves from the grip of bankers that wish to financially destroy us all.”
In short, these steps without narrative are as follows:
(1) Teach lies as truth like “markets are free” and “we need to spread democracy to the rest of the world.” Plant agent provocateurs in all movements of resistance like OWS to discredit these movements whenever possible.
(2) Commandeer and effectively take over all control of global governments, mass media, state police, and federal military elements to suppress truth from reaching the masses.
(3) Take over the education system, design it to dumb down instead of enlighten the masses, and export this model to the rest of the world.
(4) Teach young adults that a tax on tea and a tax on stamps caused the American colonialists to hate the British monarchy and triggered a successful revolt in 1776, when it was the debt enslavement component of the monetary system and the bankers’ system of theft through numerous taxes that truly caused the revolt.
(5) Learn from the mistakes of Kings by hiding the robberies of citizens’ money and disguising this robbery as a silent tax called “inflation”. Transform the violent method of tax collection that lead to the beheading of past members of nobility during Medieval times into a passive method of automatic deductions from paychecks.
(6) Engage in huge disinformation and propaganda campaigns to convince citizens in every country that income tax is not flat out robbery and not equivalent to King George’s act of sending 40,000 soldiers to force colonists to turn their hard-earned money over to him.
(7) Sell concepts like “nationalism”, and incite religious-based and race-based hate to divide and conquer people from uniting against a segment of society (bankers) that commits a long list of atrocities that would have landed anyone else in jail centuries ago.
(8) Falsely teach people that paper fiat currency and paper derivative products offered by bogus gold and silver derivative markets of the LBMA and COMEX are better stores of value and purchasing power than physical gold and physical silver, even though the below chart displays the incredible progression in the prices of gold and silver every year in USD since 2001.
(9) Teach people that the law is the final word so that they believe that anything legal is moral and anything illegal is immoral. The bankers have flipped the paradigm of morality on its head by convincing people that anything legal is moral and anything illegal is immoral when in fact, many things they have legislated as illegal is still moral and many things they have legislated as legal is highly immoral.
Concludes Kim: “As always, never believe anything printed or stated on TV “news” channels (especially CNN – just google “Amber Lyon” to understand why) unless you independently verify it yourself, including everything in this article. Unfortunately there are more lies than truth circulating among all mass media distribution channels today so nothing should be accepted at face value. You must verify everything yourself until you are satisfied that you have arrived at the truth. Uncover the truth, and when you do, do everything you can to spread the uncovered truth to the four corners of the earth. This is how we will regain our freedoms.”
http://www.zerohedge.com/contributed/2013-01-08/9-step-process-bankers-use-force-global-slavery-upon-humanity
Those sound like the Protocols of Zion, whoever assembled them, as the basic Machiavellian methods show through rather well, and he only assembled them in his 'Prince' book anyway, they are not new, and the reason history repeats itself as form and function.
I find that April timing interesting given the expected main comet cluster is said to show up in that month, after our binary buddy of course, which should put a little scare into the world's markets for a little while, then the stress test gives us a breather before the cluster et al come sometime in April... or so it's been hinted, no confirmation just yet... but as humanity exists within the larger cycles as well, it is interesting to watch our little contribution to the cyclical cosmic collapse as Mother Nature swings in to reset the game. No wonder the charts match up so well, and the same game of 'playing chicken' to see who blinks(sells out) first. Seems most people have forgotten that the markets fall 3x faster than they rise, even in a circle jerk trading system we currently 'enjoy'.
Seems not too many are watching the cosmic cycles these days, kept distracted no doubt by the puppet show of terrorism, money making and the usual 'fascism is cool when we do it' routine. Same set of lessons over and over. Good thing it's all about to reset (species extinction level event ~28million yr cycle), as this is getting a wee bit boring once you see the forest through the trees.
Birds of a feather flock together. Retards coming to ZH to read 'interesting' posts... You accomplish nothing.
LOL!!!! none can touch magnetic_silver... beceause y'all are too far behind, you think you're ahead!!!
Thank you for downs!!! I appreciate them!!!
Shows you can't reply in kind... because your ability to reason is not in kind.
What a bunch of tarded GMO corn syrup junkies.
HOW MANY NEW MERCHANTS ACCEPT GOLD SINCE 2001? How many accept gold for checkout online? STUPID STUPID STUPID STUPID
You are low income, delusional, obama phone, social degenerates. Anyone that takes investment advice from this site, or has the dexterity to even read (an get dumber by the word) what your uneducated minds have to say is in the same boat at you.
luckily for us, you rode into town with a white hat and set all of us straight!
never engage in a debate with an idiot, he will drag you down to his level and beat you with experience.
i normally do not respond to such post, and in fact agree with some of your comments, but your malignant insult of all who are here cannot go unanswered.
Good attempt, you were almost able to make a complete sentence.
You normally remain brain damaged unless you find a time machine to go back in time and undo years of mental conditioning which rendered you pathetically unable to reason.
Spend more time on ZH, the wealth is made here, on this site, really, everyone here has massive net worth, it makes the red shields jealous.
Nobody knows your next move, because you kept it hidden from the public, did not show your hand and nobody can take the other side of the trade..... turds
Man, yesur boss, yessur boss, you da man boss!
Nothing makes a better Sunday morning than a good cup of joe and reading some pinheads self-adoring adornment. Fuck you and thanks for the belly laugh.
i R going too payz teh trollz wif da bitcoinz to -1 u
'Tis the season!
Typical douche bag troll. Doesn't change a thing, loser.
"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"
It is not the tightening that is the problem, it is the easy money that is the problem.
Boom causes bust. 100 PERCENT of booms end in a bust. A boom results from easy money. Once the easy money flows, a bust is inevitable. There is no mistimed tightening of monetary conditions. There is only the timing of tightening monetary conditions.
When QE1 ended, the stock market failed. When QE 2 ended, the stock market failed. What was mistimed? Nothing. There is no such thing as perpetual stimulus. It has to end at some point, even if that point is when the money becomes virtually worthless. There is no perfect timing to end stimulus.
http://flic.kr/p/enJ7Cs
Thanks - I updated the description to include this article's chart URL.