This page has been archived and commenting is disabled.
'The Crash" Will Not Be Caused By An Event...
Via The Burning Platform blog,
Hussman analytically describing the process leading to a crash. It hasn’t happened yet, so it won’t happen. Right?
From an investment standpoint, market conditions remain characterized both by obscene valuations and still-negative market internals. It’s that combination that continues to suggest potentially vertical downside risks.
When people think about crashes, they tend to think about an event – as if some massive, grotesque, red, scaly, fire-breathing, razor-toothed catalyst should be obvious beforehand. But we know from history that that’s not the way it works.
Instead, the sequence goes like this: the conditions that create vulnerability to a crash emerge first (elevated valuations coupled with deterioration in market internals and/or widening in credit spreads), the crash emerges second, and catalysts are then identified – often just flashpoints that were consistent with speculative breakdown. Many investors think that “Lehman” caused the global financial crisis, but the mortgage crisis was already unfolding well before that. Lehman and Bear Stearns before it were only symptoms, not causes.
The cause is always speculative distortion that was well-known for quite some time: elevated valuations, often accompanied by speculation and new issues of low-quality stocks representing some “new economy” theme, or yield-seeking speculation and heavy issuance of low quality debt. The main reason investors don’t believe that such speculation will end in a crash is simply that a crash hasn’t happened yet.
In shorter-term market action, we see a general tendency toward distribution, for example, declines on expanding volume coupled with low-volume recoveries on mixed breadth and narrowing leadership (which was also the pattern last week). We note that prior to Friday, the Dow Jones Industrial Average had gone 40 trading sessions without setting a 20-day high or low.
If we look across history for periods of extended range-bound activity in overvalued markets where: a) the DJIA had gone more than a month without setting a 20-day high or low; b) the DJIA was confined to a range of less than 6%; c) the DJIA was within 10% of a 2-year high; and d) the Shiller P/E was 18 or higher, there are only 7 clusters that fit the bill (1929, 1937, 1965, 1973, 1999-2000, 2007-2008, and today).
While the full-cycle resolution was repeatedly brutal, I should note that the short-term resolution was not very informative at all, and didn’t depend on whether the initial break out of the range was higher or lower. What’s interesting about the general pattern is that range-bound action often coincides with distribution on price-volume measures. In October 2000, I mentioned similar measures of distribution, such as one that Peter Eliades called the “sign of the bear” based on range-bound market breadth. As I also observed then, neither elevated valuations, nor internals, nor distribution patterns ensure a market crash, but we don’t like the probabilities. Still, we aren’t terribly impatient about the near-term resolution of what we see as a likely topping process here.
You’ve been warned.
- 73843 reads
- Printer-friendly version
- Send to friend
- advertisements -


duh. it will be overnight credit default swaps.
one day we wake up and Tyler will give us the news, as will Drudge, Bloomberg and even MSNBC.
The HuffPost will blame George Bush.
Internet On Fire With ‘September 2015 Collapse’ Narrative
Who could have seen it coming really?
I just got my participation trophy.
Who really knows anything from history?
Thanks to Common Core, we don't have to do history anymore.
History may rhyme at times, but then history never had SkyNet so all bets are off.
Nobody is right when everybody is wrong, that's the heart of the problem, a corrupt system is only sustainable by the corruption of the masses who mysteriously feed the pigs, and they don't stop to consider what their master's hands are doing to their hard work... (Siphoning the shit out of their entire lives)
Most of them wake up after retirement, realizing their retirement money isn't nearly enough, but by then it's far too late, and that's a damn travesty.
Precipitating events for collapses are like sandpile slides. You keep pouring on sand delicately and the pile gets higher and higher until - it all slides away. No precipitating event, only causation.
One grain of sand slides first. What does it matter which one anyway?
and, its religion up to bat...............
EVERYTHING is caused by an event. It may be small but it's still a trigger. Stupid title, stupid.
BOO !
There's your EVENT Silky.
It does not have to be a Black Swan, often a black duckling will do the job.
Hey, asshole -- don't outsource my job. We have a union.
Any crash will be blamed on a fat finger, then a long retired politician for letting it happen. Banksters will be the heroes who save us, once again.
It's an event they cannot perceive...for example, Spring 2008: CDOs of all stripes being unwound in an "orderly" fashion. Boom, out of the blue in August, Mr. Putin decides to use a false flag and inavde Georgia. Everyone rushes for the exit doors, and it gets better. There's a massive planetary alignment in September while all this other furr is flying.
The situation has to exist for the event to happen. That's the point. If there wasn't a honk load of dodgy CDOs based debt that was ALWAYS going to default sloshing around then a mass exit wouldn't really have mattered.
you've missed the point.
the article is about depending on a flawed system that is vulnerable to an individual event capable of triggering a disaster. not that there's anything magical about the event itself.
the sand pile analogy is perfect. each grain of sand is more or less like any other. its the fact you keep piling them one on top of the other that is creating the instability, not the grains of sands themselves.
trying to solve the problem by avoiding this individual event or another is useless unless you fix what makes the underlying system vulnerable in the first place.
Yeah, sand or cards. The feux US markets are currently resting on such foundations.
Herds do run off cliffs
http://www.nps.gov/bica/learn/nature/buffalo-jumps.htm
The muppet masters are at the bottom too, waiting to finish off the injured.
"Events" are an arbitrary invention of the human consciousness. In reality, there is only the continual process of change. All of the past is the cause of the present and, combined with the present, will be the cause of the future!
Thanks you got me opting out of the empirical world thinking of this quote from Ludwig Wittgenstein:
"If we take eternity to mean not infinite temporal duration but timelessness, then eternal life belongs to those who live in the present."
http://en.wikiquote.org/wiki/Ludwig_Wittgenstein
The derivative of theft is corruption.
When you have a financial system whose base is fiat money aka counterfeit aka theft, corruption follows.
what are derivatives then?
Gambling, highly leveraged gambling.
But in this casino the house makes sure the odds are stacked against the player.
Wait a minute....what investors think the crash was CAUSED by LEHMAN?
Never met one of those investors lol
The one thing we learn from history is that we don't learn from history.
What happened to that guy who promised that the crash would happen yesterday and was going to put out a video about why he was so clever and saw it coming today?
You know the guy, smokes a lot, videos on youtube.
They misspelled Troof Seker, LOL
"If we look across history for periods of extended range-bound activity in overvalued markets where: a) the DJIA had gone more than a month without setting a 20-day high or low; b) the DJIA was confined to a range of less than 6%; c) the DJIA was within 10% of a 2-year high; and d) the Shiller P/E was 18 or higher, there are only 7 clusters that fit the bill (1929, 1937, 1965, 1973, 1999-2000, 2007-2008, and today)"
Those are 7 pretty scary clusters, considering what happened to the market in those years. But as everyone knows, this time is different !
2015 AND 2016 COLLAPSE TIMELINE
Fire monkeys, Dude.
Can't go wrong with a fire monkey. I did enjoy watching the video on the web page the info was entertaining but like all things you take it with a grain of salt.
Giant read moon? Check
Volcanic lightning? Check
Doom for all mankind? Check
Great reading is sure to be ahead.
I'm shaking like a leaf under this tarp. When I stopped to catch my breath I could hear someone softly crying under the other end of it.
Was that you?
Any article that starts out with: "The following essay is arguably the single most important article on the internet today." Is bullshit.
They were stupid
We are smart
I've made a couple of good calls, but I'd never venture so far as to call myself smart.
ha. this time you missed the /sarc instead of me.
Well I'm an intellectual, so everyone obviously knows I'm a idiot.
Can I trade you a can of Mountain House chili mac for some pork and beans?
Now that's talent, flippin burgers and pancakes at the same time.
We have not recoverd from the 2007-8 crash
So we are in a crash now!
Only thing that has icreased the the DEBT..............Stawks and house prices and cost of living items....................oh and Elf Care.
crashes have been outlawed, didn't you get the memo?
Circuit breakers!
The interesting part is that flash crashes can't rebound if the breakers set in.
Every time mankind thinks they can control natural forces, natural forces find away to humble mankind.
OUTLAWED?!
BTFD, bichez...until you can't buy the dip no mo.It works until it doesn't.
It is a game of musical chairs except on the final round we will discover that 90% of the chairs have disappeared.
That's when you grab a seat before the music stops.
seriously.
fuck their games-playing. this is my life, and it's not a fucking game
checkmate
Man, you are quite the repository of market knowledge, aren't you?
A sage in our midst - bitchez!
Butt Butt, "the black swan" that's all I've been hearing about here for years. Make up your mind.
There is always a black swan, it's just that we only see its shadow flying overhead, never looking up to realize what it is we are actually seeing. Once the deed is done, then we realize it was that fucking bird again.
Black Swans sailing on the 666th Hindenburg Omen in the Bondapocalypse!
just remember, the recessions of 2001 and 2008 were already entrenched before 9/11 and the LEH. stocks were already down over 15% from highs. and then crashed. no reason to think this time is different. at least in 2008, a fucking bank was destroyed instead of 3000 people and the twin towers.
same shit every 7 years
a real good purge and cleanse are overdue
The soft landing .... of buy back bigotry .... and low expectations !
I'm sure there are some good buys on the zimbabwe stock market as well, but even with a stock valued in a trillions it's still only three eggs. Eventually all these companies listed will be worth less than a productive chicken which only works for chicken feed.
I valued this horse for $10,000 but I got hungry and traded the horse for two chickens which were obviously worth $5,000 each.
if it's like 2008 the average person will not even notice.. funny how looking back they call it a crash, but living thru it it was like ok lets go get some burgers who has an extra 20 on them..
Until they received their 401k statements showing 40% loss. Then they woke up.
The 40% loss on their RRSP/401k statement or pensions is nothing in comparison to the real 2500% increase in price on daily goods.when those people made the contributions to their 401k's say 10 years ago beef was 49 cents a pound. Today it's around 7 bucks, next year if modeling real prices against the ignored inflation, it'll be 9 bucks. If we all wait long enough, all those 'billionaires' will just be worthless hobo's. They will become the 'great unwashed' no matter what they do.
The fact is, the conditional math of the system is built to make them paupers and starve everyone. It is poetic justice in putting faith into a ponzi scheme to do anything else while under a delusion they are 'seperate'. That's amazingly dumb.
That's because they hide it better.
If this was the 1930s it'd be lines and lines of millions of people waiting for soup at the soup kitchen. Instead it's millions of people with their food stamps.
See, it's much less noticable if they replace people shopping at walmart with people shopping at walmart.
That's because in the modern age crashes are kinder and gentler - no suffering required. Suffering is for knaves and chumps who don't know how to print.
Has nothing to do with suffering. Has to do with welfare for WalMart and control of the peons in the street.
The free shit army doesn't give a rats ass about the market or economy as long as they get their free shit. That said with the growing of the free shit army there are fewer and fewer people who notice. Until the free shit stops because its impossible to continue to give free shit away forever then and only then will you see a mass awakening then the cycle can repeat. This is barring the federal seizing of guns from law abiding citizens that would cause the free shit to stop because the producers would be fighting a civil war.
I tried to buy the dip, but which one ? I can't seem to keep up with Ronnie Robot.
Funny, it probably IS the same as it ever was, but now it happens 10K times every day instead of a few times a day.....
Gruber bomb. None of the other shit is working ......
https://www.kickstarter.com/projects/empireoflies/empire-of-lies
http://russia-insider.com/en/ron-paul-crowdfunding-film-heres-why-you-sh...
HEARD ON THE STREET: TWITTER AND GOOGLE TALKING WITH EACH OTHER?
There won't be a crash. One day we will wake up and the "markets" will have vaporized. They will simply close the casino doors. Bye, bye, thanks for playing. Tip your waitress on the way out.
But, but I still have all these chips! I demand to see the manager! (gales of laughter as giant armed bouncers approach)
Fear not for the doors will open again, once they are convinced you have more bets to place on the table. Casinos don't close because they ran out of money. They close because they run out of "customers".
The key for them is to always have equal measures of apparent arrogance and ignorance so as to lure their "customers" back in. To place a bet you must think you are smarter or luckier than they are, or think you know something they don't. The reality is that they will always allow you to win just enough to keep that idea alive, up until the moment they sense you have put it all on the table. They then claim what they always knew was theirs. It just takes patience, and the best part is that we, as a civilization, never learn.
Something for nothing is an infinite weakness. No amount of pain and loss can kill it in our species. We can be the victims ourselves or witness others suffer, and yet still fall prey to it. It is an insatiable appetite. It is the very basis of our modern economy. It is what empowers our government, using the notion of democracy to take from one to give to a more vocal and populous other. Vote to raise taxes because you believe it will take more from others than yourself, while believing the benefits of that theft will reward you more than it will those being more greatly robbed. Something for nothing.
Its ALWAYS due to a crisis in confidence..
Mental masterbation!!!!
Go dig in the dirt, collect water, store pm & pb, and pray you are ready when it really happens.
Who cares who called the correct sequence of events and identified the black swan?
What will you do one second after?
Continue to brag about how smart you are in a collapsing society or will you be able to save your family and neighbors?
All those puts will not buy you anything when it really goes down
Every Saturday my family puts on its bug-out bags and we run psy-ops in the forest until Monday morning.
Reduction to practice is the key to any strategy. I know people that are "ready" by simply having a survival seed vault in their basement.
Theory is a bitch when you have to learn how to open the seed vault and try to dig in the dirt without any experience. Especially if this would happen Oct-March in the Midwest.
I hope your family appreciates your preparation.......
We turn off our electricity and water for a week on every soltice and equinox to practice our home strategy.
Peace
I have a potted tomato plant on my condo balcony. Does that count?
I recently opened a seed vault to plant some of the seeds this year, it was about 7-8 years old. None of them germinated. I don't think it was because of bad seeds but I do believe I let it sit tooooo long. So keep in mind the age of your seed stock. Look into plants that can over winter or can be harvested in the winter. Carrots are great they can survive in below freezing temps and are very sweet once the temp drops. Spinach can be over wintered for a very early spring harvest. Kale will survive all winter long covered in snow. Garlic (hard neck) needs to be planted about 2 weeks before your first hard frost date and can be harvested in about the 2nd week in July (depending on climate). Chickens (winter hardy types) can survive with no heat in 10 degree weather as long as they have a hen house to huddle up in, they stop laying though.
Sorry but with HFT and spoofing, there will have to be a very signficant event to create a large enough stop run, that the algos cant turn it....
Call for the day the 10 back under 2.26, and the S&P green... Hope I am wrong, but this isnt it. Just a ripple in the force, not a true disturbance. Cards arent in place yet.
All references to past market actions are moot. Never in history have the Central banks been so myopically focused on 1 thing and 1 thing only. The market will not be allowed to decline like past serious selloffs. Of course in the end this will crash and burn but we aren't there yet. . . not by a long shot.
Took over 60 years in the USSR, to finally consume all the seed corn.
Exactly, and their feed stock was much less than in the good ole US of SA.
'The Crash" Will Not Be Caused By An Event..."I would certainly hope not...
Gigantic asteroid near miss coming this ThursdayOn this occasion a collision seems unlikely – but it doesn’t take much of an orbital perturbation to put an Earth grazer onto a collision course.
A collision of 1999 FN53 with Earth, especially an ocean strike, would be nothing short of catastrophic. The fire and blast alone would likely kill millions. It would cause massive earthquakes across the world. An ocean strike would raise mountain size tsunamis which would smash coastal cities thousands of miles from the strike. The climate impact would also be significant – the Younger Dryas, a brutal collapse in global temperatures which lasted 1200 years, may have been caused by an asteroid impact.
-------------------
Now they name storms after people, hopefully they named this one Hillary.
" near miss" my ass...more like fear porn horseshit. http://echo.jpl.nasa.gov/asteroids/1999FN53/1999FN53_planning.html
As you can see, the closest approach distance is about 26.5 times the distance from Earth to the Moon. Not a threat in the least.
I'll go with July 25th.
There will be no collapse - period. That's just the frustrated Zeroes talking who missed out on the boom.
However, Zeroes WILL eat cold oatmeal and argue amongst themselves about the virtues of it.
“Speculative distortions” Duh! FIVE TRILLION $ in money creation can sort of cause that. The Fed bankers all pat themselves on the back and say the alternatives were far worse. They don’t know; they just delay and pray. It WILL all come tumbling down…it has to. Trees don’t grow to the sky and limitless growth is a fantasy. When organic growth ended it was replaced by stock buybacks and mountains of new debt generated through loose credit. Any attempt at “austerity” will cause our cities to burn…just look at Greece. Once the masses taste all the entitlement program handouts, good luck cutting them off.
Silicon Valley is in the largest property bubble in all of history and it is about to deflate. It will start slowly, almost unnoticed, and then accelerate as people who paid insane top dollars for run-down old houses, begin to panic and walk away. Those high-paying tech jobs are starting to evaporate and they have been powering the mania for 40 years. Layoffs are already in progress, and tech companies will have no trouble moving more of their operations overseas.
The Fed will try to appease Wall Street with talk of more QE, but it will not work. This will get ugly…but timing it is always tough and the bears have been gored for seven years now.
"The cause is always speculative distortion that was well-known for quite some time"
Skyrocketing student loan debt that can/will never be repaid?
we never could appreciate the meaning
or significance of the term
"malinvestment", is that it?
money monkeys.
Title is wrong......the event is already taking place......a 30+ year binge of monetary expansion which increased exponentially over last 7 or so years. Professional investors borrowing low and investing high, Greenspan put, Bernake put, Yellin (man is she ug) put.
The event was - is - and will be the looting of lower, middle and middle upper classes by the professional looting class. This was supported by a spineless government legal system and infected FTC. Never have so few screwed so many while giving total impunity to the guilty.
All this filth and rot will cause an event that may or may not be containable. Be patient, it will happen.
Gold and cash at home may help.
Don't forget the Poloz 'Put', and the Carney 'Put', those motherfuckers are butt ugly too, eh. Further, Yellen is a damn sight better than Summers would have been. Fuck me, if Summers had of become FED Chair he would be gloating today and we on Z/H would be even more irate. Yellen is better than Summers, always remember that. And never get out of the boat, never get out of the boat!
The top has been marked with the AOL buyout once again.
I triggered the 08 crash, and designed it to wipe out every bank in the World, slowly, and painfully, SUCKERS! Everything is going like clockwork, and the 'Shmeeeeetaaaa' crap-O-la is pure unadulterated bullshit Jewspeak gobble-DE-gook, motherfuckers. The Jews don't know shit-from-shine-O-la and are reactionary because they are getting FUCKED like they have been fucking everyone for the last half century.
What goes around comes around, eh.
:|
bwahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahah
holy fuck you're retarded
Not half as retarded as you obviously are, Pareto.
A crash is when the FED loses power to the applications server.
The physical world reacts to the siritual world. It's The American Curse >>> http://wp.me/p4OZ4v-3z
Making predictions is hard. Especially about the future
But economists are great for making predictions about the past. That's why they get paid the big bucks.
The best predictor of future behaviour is past behaviour. Moreover, American Behaviourists in Experimental Psychology formulated this heuristic, not moi!
Beware then and be prepared.
just load up on subzero penny stocks and you'll be well hedged fpr the collapse.
There are companies that pay you to transfer ownership of their shares to yourself?
What's to worry? Trust the Fed.
Decent article, but
"The cause is always speculative distortion that was well-known for quite some time:"
The speculative distortion is itself a symptom--a symptom of artificially low interest rates / easy money. The big players are always going to chase the highest expected yield. Central bank intervention shifts yield from savers to leveraged speculators.
"By Jove, Sherlock, I do believe that chap is trying to use the Spark & Tinder analogy. How frightfully clever of him, I dare say."
"Indeed, my dear Watson, indeed. Did you know that far more ravaging fires are started with a spark or match, than with a torch or a Molotov* Cocktail? Yes, big things have small beginnings, you might say."
* The observation readers will not that the Molotov Cocktail was invented well after the creation of Sherlock Holmes, but the analogy still applies.
I personally believe that since there are fewer and fewer general public investors in the "markets," any "black swan" event can only come from other grifters, banksters, in the system. As a result, I believe that Zion and their banksters are going to engineer the "crash," like they did in 1929.
I believe that that is why the dollar is so artificially and quickly up, as the connected and Amongst are padding their "exit" to the euro, shekel, etc.
I believe that the Saudis were let in on this "exit" in exchange for their cooperation on oil prices. The recent indicators on their dollar assets/reserves seems to support this.
Regardless, I believe that if you are holding dollars, or any other so-called paper assets, you are playing Russian Roulette with a semi-automatic.
Liberty is a demand. Tyranny is submission..
Instructions: Tin foil hat on to block reception. Tin foil hat off to receive. Best reception is on the "throne."
There is EBT, Section 8, Obamacare, energy assistance...the list is endless, and no matter the economy, Amerikans will drink sewage in defense of the aforementioned elements of Freedom. No regime change is in the offing, ever.
Don't forget the snowball effect of Goldman-Sachs hitting a couple of hedge-funds with unplanned collateral increases that triggered off the avalanche in MBS. That's all it takes when they decide they've stolen enough on the upside; then they go short for the long ride down. And they call it "smart" money.
While the alternate media awaits the crash, like this poster, the MSM heralds the status quo as here :
http://www.marketwatch.com/story/us-stocks-futures-driven-lower-as-bond-...
Us futures may be decoupled from "reality" but according to these "pundits" they lead the market.
Bonds will save the Stawks overpricing...
You've heard it here!
If I had to create a new super-currency -- or even a regular national currency -- I'd base it on (index it to) a Basket of Precious Assets, to make sure that it became regarded universally as Honest Money.
This Basket of Precious Assets would consist of several (5) other Baskets:
1. Precious Metals (15%)
2. Strategic Metals (10%)
3. Precious & Strategic Minerals (5%)
4. Precious Carbon Fuels (10%)
5. Renewable Energies in Watts (10%)
This adds up to a 50% backing of universally accepted Real Assets, and would allow for value-add GDP growth contributing to a currency's strength. It is the latter part (the GDP component) that reflects the natural reality that "Not all currencies are equal", but that they are competitively priced and retain inherent value for any economy.
This would allow for a large range of nations to create Honest Money, that would be resilient against the predatory (opportunistic and parasitic) efforts of Usurpers, who would seek to speculate, manipulate and profit from mere exchange of money. It would, hopefully, end the rule of the Moneychangers, and usher in an era of Builders, Creaters, Inventors and Enablers (value-add Service Providers).
Are you listening, BRIICS and AIIB?
Captain, you don't get that gold is universally accepted currency already and that there is really no need for a basket system. This is why all nations are rushing to gold and hoarding it en masse. It also explains why gooberment is keeping the price of gold low whilst they buy it up. The basket thesis is reasonable, but it is a reset proposition, and does nothing for the current state of affairs with this gold rush that is manifesting. Your post is certainly a very excellent post though, and I'm glad you are bringing this up. What do the Tyler(s) envision for the best possible basket of currencies? This is what I want to know? You are the first to compile a list here, kudos.
The crash will come when the central banks policies result in pushing on a string. Until then - nothing will take the markets down because the Fed can print to infinity.
So buy the index and go along for the ride.
Because when this crash comes it does not matter if you are on the sidelines. Civilization will end. Your cash will be handy in starting a fire to heat up some rotting rat meat to go with your bark and grass
THE PERFECT STORM (see p. 59 onwards)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
the new currency will be .22 rounds, canned food,and AR-15 parts.
Death by a thousand cuts. We have been in a recession/depression for years.Kept afloat by steadily rising debt and printing money. It's all smoke and mirrors.
It will end badly,I am guessing not to far in the future.It's what jade helm is about.Our government getting ready for mass riots and civil unrest.
Obama is doing his best to make it happen.Nobody can really not lead at all. Cloward and Piven stuff is what he is about.