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Guest Post: Attention Passengers on Global Equity Flight 2011: Assume Crash Positions

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Attention Passengers on Global Equity Flight 2011: Assume Crash Positions

An array of evidence suggests that a crash in equities might be just ahead.

I know, I know, retail sales are up so everything's wunnerful, but the captain of Global Equities Flight 2011 just instructed the passengers to assume crash positions. It seems the captain has the distinct advantage of being able to see what's just ahead, not to mention being able to monitor the engines and fuel levels. (Hmm, did the starboard engine just conk out? Not good....)

Levity aside, there are unnerving similarities between the present and the pre-crash 2008 equities market. To make the case, let's turn to some excellent charts from The Chart Store and Ron Griess.

In the first chart, Ron has traced out the basic pattern and the percentage of stocks above their 200-day moving average (MA). Notice how weak that is compared to price.


Next, a chart which shows we're right where the 2008 rally topped and tanked.


Last up, one of my favorites, an analog chart that overlays the present-day rally over the 1907 crash and rally. It is uncannily similar until QE2 saved the day for a few months. That pushed the present out beyond the 1907 line, but then current prices began falling until the most recent "6-week wonder" prop job once again saved equities from collapse.


Apparently we're supposed to believe that channel-stuffing auto dealers and Americans-self-medicating-with-shopping-on-credit are really going to power the economy to ever greater heights of sales and profits. Anything's possible, but despite the cheer and the constant calls for a year-end rally to end all rallies, the market is looking a little uncertain here.

Consider the broad-based Russell 2000, which seems to have traced out a beautiful head and shoulders pattern, as good a precursor to a crash as you can get.

The last time the RUT looked this ugly, the Powers That Be pulled one save after another out of their bag of tricks. Despite brave talk from Fed lackeys that "we have more amazing stimulus plans right here," everyone knows they've shot their wad and have been reduced to playing around with Treasury yields that won't do anything for the real economy. So all that brave talk about the next big Fed-rides-to-the-rescue is just that, hot air and paper-thin bravado.




For a very insightful chart of the RUT from a razor-sharp analyst, please see Technical Perspective: Repetition in the Russell 2000 (Chris Kimble).

Zooming in a bit, let's take a look at the S&P 500, where we see a classic wedge/pennant, the sort of thing that breaks big up or down. Given the abundant evidence of weakness, not to mention the potential for outright panic in global credit markets, does anyone not being paid to lie really think the probabilities favor a breakout here to the upside? Based on what? I know, I know, "seasonal patterns." In other words, we're depending on Santa to deliver the rally everyone needs to stay solvent.



It doesn't take much imagination--none, really--to see the similarities between the July topping-out and the present. If volume is the weapon of the Bull, then everyone betting on the next big rally has to explain why volume has been declining.

Rather than get distracted with how much low-quality crap gets sold at loss-leader prices on November 25, we might be better served to focus on the U.S. dollar. As everyone knows, equities and the buck have been on a see-saw for a long time. If the dollar rises, equities drop. If the dollar rises a lot--for any reason, or no reason, it doesn't matter-- then equities crash.



If the euro weakens, the dollar rises. If the dollar rises, equities weaken. If there is anything else to know about the current equity market, how much can it possibly be worth?

He who sells first sells best. Something to ponder in the weeks ahead.


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Wed, 11/16/2011 - 11:50 | 1882764 undercover brother
undercover brother's picture

Ummm.  Ain't happening.

Wed, 11/16/2011 - 11:56 | 1882790 HelluvaEngineer
HelluvaEngineer's picture

Agreed.  Apparently this correlation no longer works.  You know, just 'cause Fraud Street changed the rules.  Didn't you get the memo?

Wed, 11/16/2011 - 12:04 | 1882832 HelluvaEngineer
HelluvaEngineer's picture

Junk all you want.  They're about to take it green.  Again.  What do you think is gonna happen when the Euro rebounds?  *then* the correlation will magically work again.

Wed, 11/16/2011 - 12:22 | 1882920 rocker
rocker's picture

I did not junk you. I would like to make a remark. These charts look good and factual.

Yes they will make it green all day on NO volume. Volume verifies the rallies. Not forced short covering.

I am and will remain 100% cash.   All we have to do is wait for the trigger and credit event.

It will happen because it is real. This will be a financial crash.

There is nothing to debate. Dr. Copper has spoken. Bond yeilds have spoken.

All we need now is for reality to set in. Hope is not a investment theme.   

Wed, 11/16/2011 - 12:39 | 1883000 jm
jm's picture

Forget charts.

Not every European bank is going to implode, but just about every european is priced as if they are.

Find the ones that will weather this storm (read: their government bond holdings are beating bunds) and exceed tier 1 capital targets and take a risk.

Wed, 11/16/2011 - 14:29 | 1883465 Mugatu
Mugatu's picture

The buy the good bank stategy did not work in 08 and it will not work in 2011-2012.  The baby will get thrown out with the bathwater.  All banks will fall.

Wed, 11/16/2011 - 17:04 | 1884320 jm
jm's picture

You could be right of course, but QE is out of the bag.  And even those morons at the ECB know they have to do it to save the financial system.


Wed, 11/16/2011 - 12:49 | 1883069 El Viejo
El Viejo's picture

Hope you are truly in cash and not in MMKTs cause a lot of MMKTs are invested in EU Banks. I was all in Bond Funds when the original crash hit and I made out. This is not a reccomendation just free info and this and $4.95 will get you a cup of coffee at Starbux.


Wed, 11/16/2011 - 14:08 | 1883387 rocker
rocker's picture

Yep. 3 Accounts all Cash. Just Waiting.  They may push this around till after Xmas.

Who knows, right now hedge funds are burning shorts. A bigger drop when they do this.

One morning we could see a 400/500 drop at the open which will cause a down ramp.

I am beginning to believe that is what they want.

Wed, 11/16/2011 - 14:32 | 1883479 11b40
11b40's picture

Short interest has dropped.  If will take a lot more this time to force a short-covering rally, unlike a few weeks ago when everybody & his brother was short.

I guess we will see soon, but the upside from here looks very limited, while the downside looks....well, it looks like it could go down a long way.

The Santa rally is facing European headwinds that even the jolly old Bernake can't tame.  I don't know what tomorrow may bring, but the Europeans are having discussions now about things that were unmentionable a few months ago.  The more they talk, the worse it looks for the Euro/European Union retaining the same character of the past.  Regardless how hard I look, finding positive things to get excited about is almost impossible.  Seems like for every plus, there are at least 2 minuses.

Wed, 11/16/2011 - 13:14 | 1883174 SheepDog-One
SheepDog-One's picture

Hows that 'takin it green' workin out? And even if and when they do 'take it green' so what?

Wed, 11/16/2011 - 12:26 | 1882934 LeonardoFibonacci
LeonardoFibonacci's picture

Assume the fetal position & start suck your thumb.  Somehow i feel less pain when i do this! 

Wed, 11/16/2011 - 12:54 | 1883097 max2205
max2205's picture

Bennie and the Inkjets dont give a fuck about your charts  (BTW I DO), he will Penn St fuck all shorts beyond imagination....or so he thinks

Wed, 11/16/2011 - 14:38 | 1883520 11b40
11b40's picture

it will take a boatload of new debt, because more QE here won't mean much if Europe blows to insure the Ponzi extension, Ben will have to print for the ECB, too.  If it comes to light that the FED is bailing out the US banks and the Euro banks at the same time, all hell will break lose.  The politics of it all would be unbearable.

Wed, 11/16/2011 - 12:38 | 1882995 alien-IQ
alien-IQ's picture

yeah that's right...and go long Lehman and MF Global...and all that jazz....

Wed, 11/16/2011 - 12:50 | 1883072 WhiteNight123129
WhiteNight123129's picture

Yup sometimes the board where things are supposed to balance from one side to the other, well this board breaks and two sides get down. It will take more time than most people think but the USD will break.

Wed, 11/16/2011 - 14:42 | 1883540 11b40
11b40's picture

On a long enough timeline....and all that jazz.  The USD will beak against what?  Really, what breaks first?  EUR or USD?

Wed, 11/16/2011 - 15:05 | 1883650 WhiteNight123129
WhiteNight123129's picture

Well open a history book and all that jazz...  Assignats, Rettenmark, Continental dollars, Greenback introduction.... yeah I know too much jazz probably, boring... History started in the 1980, on hte first day God gave Ronald Reagan to the USA on the seventh day God sent his an angel to the USA (= earth) and music was invented by Madonna... Currency crisis are just business as usual if you take a longer perspective, there are hundreds of crisis, which are either sovereign, banking, currency, just hundreds of them in history. USA already defaulted three times (continental dollars, Civil war 100% inflatipon), 70s inflation and now it is the fourth time. Currency crisis, severe inflation, banking crisis or sovereign crisis are business as usual from historical point of view. Forget about fiat, at that point they will all break in a different ways, they can break through printing (long time scale) or in shorter time scale... Take your pick

Wed, 11/16/2011 - 15:12 | 1883689 WhiteNight123129
WhiteNight123129's picture

Oopsss forgot the devaluation of 1933 against Gold...

Wed, 11/16/2011 - 15:47 | 1883859 11b40
11b40's picture

Well, if you know so much, why didn't you answer my question?

Wed, 11/16/2011 - 13:16 | 1883190 The Big Ching-aso
The Big Ching-aso's picture



Stock Market Non-Insider Participants = Crash Test Dummies

Wed, 11/16/2011 - 22:22 | 1885500 Sopra Tutt1
Sopra Tutt1's picture

It can't happen, because this time is different.

Wed, 11/16/2011 - 11:51 | 1882767 Ancona
Ancona's picture

I want my mommy!

Wed, 11/16/2011 - 11:54 | 1882778 Shleprock
Shleprock's picture

I want your Mommy too

Wed, 11/16/2011 - 11:57 | 1882795 Ancona
Ancona's picture you're in to necrophelia?

Wed, 11/16/2011 - 12:13 | 1882875 disabledvet
disabledvet's picture

Awwww. That's sad.

Wed, 11/16/2011 - 12:14 | 1882880 Cash_is_Trash
Cash_is_Trash's picture


Gold, bitchez

Wed, 11/16/2011 - 13:15 | 1883186 augmister
augmister's picture

I had your mommy and she tasted pretty good!

Wed, 11/16/2011 - 11:53 | 1882774 Tsar Pointless
Tsar Pointless's picture

Great timing for this post, just as US equities commence on yet another ramp job.

Dow spikes nearly 60 points in 10 minutes.

Wed, 11/16/2011 - 12:15 | 1882820 Ghordius
Ghordius's picture

I'd say it's too early.

First the EURUSD has to touch 1.30 (December, latest),

then (according to Gonzalo Lira) the Big Raid on EZ Sovereign Bonds might to begin in earnest (he says tomorrow's French Auction),

then we have Xmas & the biggest Bonuses of All Times

and then we have a decoupling of US Equities (down) from all Euro-related things.

See you at EURUSD 1.5 at Easter

Wed, 11/16/2011 - 12:15 | 1882885 disabledvet
disabledvet's picture

Who put your Dr. Evil hat on today?

Wed, 11/16/2011 - 12:41 | 1883007 Ghordius
Ghordius's picture

you are right, I'm slightly down the wind today - not my usual cheerful self

but the fact that the masters of the universe have found a way of having the Dutch Debt now with consistenly higher yields than Germany really makes me angry

it's not only too manipulated - it's grossly manipulated

too much hot USD searching some quck killer bets and all on "seasonal themes"

usually I'm skeptical of all conspiracy theories - idiocy explains 99% of the cases, IMO

Wed, 11/16/2011 - 12:13 | 1882861 scatterbrains
scatterbrains's picture
and when you switch over to an hourly line chart you'll notice that the 11/11/11 high occured at 11am. This high could also be labeleda 5th of C (in an ending diagonal) from the  the Oct. 3rd lows.  We are now in the 1st leg down unless 126.81 hourly closing basis gets taken out.. or so it seems.
Wed, 11/16/2011 - 12:17 | 1882894 Ivanovich
Ivanovich's picture

Was this before or after Mercury entered alignment with Uranus?

Wed, 11/16/2011 - 12:19 | 1882903 scatterbrains
scatterbrains's picture

lol no actually this was the next day after a full moon and an astroid the size of a battle ship grazed past earth :o)

Wed, 11/16/2011 - 12:26 | 1882933 Mae Kadoodie
Mae Kadoodie's picture

There's Klingons circling Uranus.

Wed, 11/16/2011 - 12:32 | 1882965 scatterbrains
scatterbrains's picture

I brought this up because it was within a technical market posting.  I'm calling for a plunge come friday's open bitches! 

Wed, 11/16/2011 - 15:44 | 1883841 WhiteNight123129
WhiteNight123129's picture

Well you are a bit too specific, BUT....

Hard to deny that moon has behavioral impact on people, same goes for Sun apparently. There is a statistical sample of 34,000 people over 30 years that show that people commit suicide more often in Spring. There is apparently nothing in litterature or culture that spring is a sad time, or some sort other variable.... maybe it is because tax are due in April there and Sweden has a very high rate of taxes (that could be actually the reason...) Joke on teh side, assuming that Moon and Sun has 0 impact on what goes on the earth?? Hello??? Women menstrual cycle length, reproduction cycle following moon cycles, tides, inability to sleep on full moon (documented stastically). Well about zero impact of the Sun on earth, well it that would be case, we would not be blogging here on hte first place, because there would be no light and no life. That is was is powering all that is there to see, and the amount of power varies across time... There are credible evidence that total absence of sunlight on people has impact on people sleep cycle, mood ect... That is put a human being in a cave for months without sunlight and watch.... not pretty.

So while I can not accept that Sun and moon are telling us when the crash will be, it is also imprudent to accept the hypothesis that there is no impact on human behavior from stellar objects, given the ample evidence that those two somewhat massive objects have large influence on life cycles on our planet

From that point to predict when teh market crash on a given day at a given hour... yeah right...

Wed, 11/16/2011 - 11:53 | 1882776 ffart
ffart's picture

Silver barely holding 34 now.

Wed, 11/16/2011 - 11:55 | 1882788 HelluvaEngineer
HelluvaEngineer's picture

Why would you want silver when you can buy some delicious CRM stock?

Wed, 11/16/2011 - 11:59 | 1882809 The Axe
The Axe's picture


Wed, 11/16/2011 - 12:49 | 1883067 ffart
ffart's picture

Well I guess if I listened to my broker I'd be buying all sorts of useless shit right now.

Wed, 11/16/2011 - 11:54 | 1882779 Piranhanoia
Piranhanoia's picture

They're on instruments.  The copilot is losing air, and everyone had fish but the kamikaze pilot.

Wed, 11/16/2011 - 11:56 | 1882780 ShankyS
ShankyS's picture

Well done, could not agree more. Nice to see you pick up the possible head and shoulders with RS forming here. Weekly fractaling nicely to '07 top. Only difference - the Fed and crony capitalism are out of control here. We may have to wait this one out till they literally implode the whole system. 

Wed, 11/16/2011 - 11:54 | 1882782 fonzanoon
fonzanoon's picture

market coming back nicely

Wed, 11/16/2011 - 12:02 | 1882800 SheepDog-One
SheepDog-One's picture

Coming back to what, 1995 levels? DOW is 12,025, so all is well I guess.

Wed, 11/16/2011 - 12:25 | 1882928 fonzanoon
fonzanoon's picture

These sky falling headlines get tiresome. It is especially irritating reading them while the market bounces back for the day

Wed, 11/16/2011 - 12:41 | 1883010 BandGap
BandGap's picture

Then you behave as they intend.  Or not. It is not a question of if, but of when. 

The leading indicators will move after the system collapses, not before.

Wed, 11/16/2011 - 12:48 | 1883059 fuu
fuu's picture

3 weeks 6 days.

Wed, 11/16/2011 - 13:14 | 1883182 SheepDog-One
SheepDog-One's picture

Hows that 'market bouncin back' goin now that its back to days lows?

Wed, 11/16/2011 - 17:08 | 1884368 fonzanoon
fonzanoon's picture

I am so happy to be wrong. I truly I am. I am so sick of watching the same show.

Wed, 11/16/2011 - 11:55 | 1882784 John Law Lives
John Law Lives's picture

"Apparently we're supposed to believe that channel-stuffing auto dealers and Americans-self-medicating-with-shopping-on-credit are really going to power the economy to ever greater heights of sales and profits."

Quote of the day!

Wed, 11/16/2011 - 11:55 | 1882787 PulauHantu29
PulauHantu29's picture

I put on my crash helmet jus tin case....a bigger cash position since i dumped last bounce....on sidelines now....

Wed, 11/16/2011 - 11:56 | 1882791 HD
HD's picture

All I want for Christmas is accurate price discovery...or a shit ton of gold. Never mind, just get me some not money gold - it's tradition!

Wed, 11/16/2011 - 11:56 | 1882792 slaughterer
slaughterer's picture

Too many technicians are pointing to this similarity between 2008 and 2011 chart pattersn.  Question is:

where are the failures?

where is Bear Stearns?

where is Lehman?

where is FnF?

where is AIG?

where is wamu?

where is Wachovia?

We need a few catalysts (runaway disasters) still to get to 2008.  

Too many politicians are seemingly rescuing the world and the MSM is not tuned to disaster yet.  

Wed, 11/16/2011 - 12:17 | 1882892 Ragnar24
Ragnar24's picture

Dexia, MF Global, Unicredit, Jefferson County... and despite ISDA, Greece debt "haircuts" ARE actually real losses on the balance sheet (a catalyst for a future catalyst).

Wed, 11/16/2011 - 12:33 | 1882970 Stax Edwards
Stax Edwards's picture

Agreed.  Talk to any retail insiders and they will tell you their business is great.  Some say better right now than has ever been.  Sorry, no 2008 redux here.  We have got a recovery on our hands.

Not sure what to make of the WTI spike. The reversing of the Gulf-Cushing pipeline that COP just sold is probably related.  WTI-Brent spread has collapsed.  Anyone have another explanation? 

I could care less until it affects the price of gas.  Gas prices remain the lowest since Feb '11.  

Santa Rally on tap next.  Get long. 

Use the Euro induced volatility to add to positions.  BTFD.

Wed, 11/16/2011 - 13:20 | 1883215 baby_BLYTHE
baby_BLYTHE's picture

so you think Bernanke really saved us from a repeat of the Great Depression? The very same man that has been wrong about every economic prediction he has ever made?

Wed, 11/16/2011 - 11:56 | 1882794 TooBearish
TooBearish's picture


Wed, 11/16/2011 - 11:57 | 1882797 Rainman
Rainman's picture

Charts schmarts..... oil ain't payin attention to any of it

Wed, 11/16/2011 - 12:33 | 1882968 Bring the Gold
Bring the Gold's picture

Unless of course Oil has gone rogue because it's operating under it's own fundamentals due to decreasing total production...

Wed, 11/16/2011 - 11:57 | 1882799 Irish66
Irish66's picture

Spreads between bid and ask government bond prices indicate markets are “frozen,” said Franco Passacantando, Bank of Italy’s Managing Director for Central Banking, Markets and Payment System in Milan today.

The European Central Bank is “almost exclusively buying Spanish and Italian bonds,” he added.

Wed, 11/16/2011 - 12:03 | 1882827 Tsar Pointless
Tsar Pointless's picture

The European Central Bank is “almost exclusively buying Spanish and Italian bonds,”

Hmm. A central bank buying sovereign debt. Sounds vaguely familiar.

For all of my lifetime, the American Right hated European Socialism, and wanted Europe to be more like the USofA.

Well, now it is.

I guess the American Right must be happy now, huh? Victory is theirs!

Wed, 11/16/2011 - 11:58 | 1882801 stika
stika's picture

EURUSD heading to 1.20 or less... stock markets should follow... I share this view: it's about time, crash time.

Wed, 11/16/2011 - 12:18 | 1882901 treemagnet
treemagnet's picture

I'm more like 1:1, but it won't matter cause it'll be German marks to USD anyway, but it won't matter cause we won't buy their cool shit, but it won't matter cause ...

Wed, 11/16/2011 - 11:58 | 1882803 cherry picker
cherry picker's picture

I've been reading ZH for some time now.  The articles appear to be factual and well researched.

Some of it I do not understand. I am not the only one.

The "sky is falling" syndrome has been going on since I starting reading ZH, and yet, life seems to be going on.

Am I missing something?  Is ZH the prophet of an eminent financial collapse or will things still be the same five years from now?

Wed, 11/16/2011 - 12:01 | 1882813 SheepDog-One
SheepDog-One's picture

Good luck....we're all counting on you...

Wed, 11/16/2011 - 12:02 | 1882823 Ignorance is bliss
Ignorance is bliss's picture

We are in the collapse. See National debt 15 Trillion that we know about, Banking sector propped with bubblegum and hope,  European debt crises, 16% unemployment, etc.... It just takes a while for our collective heads to feel the brick and morter crumble around our ears. Be patient..the pain will come.

Wed, 11/16/2011 - 12:04 | 1882831 Rainman
Rainman's picture

Relax and just BTFD

Wed, 11/16/2011 - 12:28 | 1882867 Waffen
Waffen's picture

I believe a lot of assumptions have been proven wrong.

QE to infinity

Fed has no more bullets in the gun

Sensationalist headlines encourage the more ignorant of us to make bad investment choices(see the deflation blows doors open for QE) really?

logic says that the markets can't continue to do this. however if all governments collude together to keep the ponzi going and there is no media(that the normal person watches) to blow the whistle, well then this can go on until the powers that be want it to end. It appears to me that they hold all the cards and as George Soros said in, was it 08? "We will have a managed decline of the dollar"


I am sitting on my stacks, tending my gardens, raising my newly bought goats etc, preparing for the end.

Wed, 11/16/2011 - 12:35 | 1882978 alien-IQ
alien-IQ's picture

if all governments collude together to keep the ponzi going...then it is not, by definition, a "market". Merely a government sponsored game of three card monte.

Wed, 11/16/2011 - 12:37 | 1882989 pelican
pelican's picture

Those goats will go right into the stomach of the starving armies.

Wed, 11/16/2011 - 12:14 | 1882877 alien-IQ
alien-IQ's picture

Apart from the National debt, endless and ongoing wars (at least 4 of them), devaluation of the dollar, real unemployment rates, home price deterioration despite dollar devaluation, mark to unicorn accounting gimicks utilized by the banking industry to create the illusion of solvency, the perpetual bombardment of misinformation, disinformation and outright lies by the mainstream media and our "elected officials" and the levels of protest sweeping the nation and the globe...everything is, in fact "just fine".

Don't worry...go shoping.

Wed, 11/16/2011 - 12:15 | 1882884 treemagnet
treemagnet's picture

They laughed and mocked Noah too, use this time.  Develop skills that have been lost due to specialization of tasks and division of labor.  Most prepping is just good sense, good times or bad.

Wed, 11/16/2011 - 12:26 | 1882908 zonkie
zonkie's picture

Cherry Picker - Here is the thing - even if you ignore all colorful commentary and just look at the facts that are talked about here at ZH you will see for yourself that the world economic condition is very perilious. 

Carefully see how the corporate and economic numbers are routinely fudged and are clearly exposed here at ZH, when you look at any expecatation be it corporate or economy number you will see a downward revision and then the big bold news that "XYZ beats estimates".  The same is true with economic data. ZH rightly predicted about the Italy bond/bund breakout even before the market shifted focus to Italy and now ZH is talking about Spain again..

The market is reacting slowly - this may not be a plane crash but a slow and gradual ship wreck that started in Sep 2010 (yes not 2011), though the seeds were sown 5 years ago when debt situation began to worsen the world over.

And yes I will buy S&P but not until it has corrected 20% from today, this may take upto 6 months in my view, but might happen sooner. 

Wed, 11/16/2011 - 13:05 | 1883145 afdestruction
afdestruction's picture

Spot f*ckin on

Wed, 11/16/2011 - 13:28 | 1883243 JPM Hater001
JPM Hater001's picture

Agreed.  We are all waiting for the "EVENT!!!" when in fact this collapse happens in stages.

Here is a link to the bears explaining how it happens.

We around around stage 8 although it is not a totally linear event.

Wed, 11/16/2011 - 12:26 | 1882937 neevarp
neevarp's picture

@ cherry picker

True. However, I see ZH as an alternative medium to find out what is happening on the other side.

Like something good to look into while holding trading positions .. :)

Wed, 11/16/2011 - 12:29 | 1882946 Randall Cabot
Randall Cabot's picture

The sky is falling, you just can't see it through the manipulated markets.

Wed, 11/16/2011 - 12:48 | 1883046 Sgt.Sausage
Sgt.Sausage's picture

Financial collapse is inevitable.

You have the correct question, though: is it "eminent"? (except you got the wrong word - you meant "imminent" didn't you? They have completely different meanings)

I don't believe so, myself. I don't even think it will be a "crash" per se, just a looooonnnnggggg slllloooooooooowwwww grind into oblivion over the next several decades.

I have faith in humanity, and its ability to improvise and adapt to any situation. We'll collectively get through this thing eventually, but probably not in my lifetime. We are in the "new normal" where things just slowly and constantly get worse and worse. Two or three more decades of that and I'm dead anyway ("on a long enough time scale ...") so it won't really matter to me.

Collapse via sudden crash? Nope.

Long slow grind into oblivion? Ayup!

Just my opinion, I'm only The Sarge, I have no high level, insider  intelligence on this matter.


Wed, 11/16/2011 - 12:48 | 1883055 Stax Edwards
Stax Edwards's picture

ZH came to notariety during the financial crisis that is (seemingly) winding down, by giving the non-stop  (24-7) play by play with the excitement of a sports announcer with lots of charts and wily commenters.  

If the euro thing ever gets resolved, I am thinking TD will have to realign the 'sizzle' somewhat to reflect the less liklieness of fiat ponzi collapse. The euro thing keeps us guessing about potential contagion though.

It is compelling reading nonetheless as TD does a fantastic job of drawing the crazies and some of the shit you read here is really funny.  A lot of the commenters are highly intellectual and clever.  Fun place IMO.

Wed, 11/16/2011 - 12:57 | 1883114 upWising
upWising's picture

Mr. Picker:

Thank you for your support of The System! We appreciate your efforts to counter negative thoughts and doubt in this, The Greatest Country the World Has Ever Seen!   As you so rightly point out, indeed everything is fine and getting better every day! Any false allegation of a "soft patch" or "transitory bump in the road" that the Mexi-Muslim-Controlled Liberal Media try to make you believe will in any way diminish your "non-negotiable American Way of Life" is simply designed to confuse you!  Your Government and Leaders are in Full Control of the Situation and America is poised to soar to ever greater heights!  You are Safe and Protected and have nothing to worry about!  Please follow the Official Advice and Directives below, and know that by doing so, you are Supporting and Defending the Homeland!

1)  Drink Alcohol (if a little is good, a lot is better) and, with each swallow, know you are stimulating the economy.
2)  Watch your Television Regularly (because everything on TeeVee is true; that's why it's on TeeVee!!), and Buy As Directed.
3)  Enjoy an All-You-Can-Devour Buffet at least once a week (because if Big is Good, Larger is Better, and Huge is Best!!).
4)  Accept Every Generous Credit Card Offer You Find in your Mailbox (because when you swipe, your show you Love America.)
5)  Take your Medication as Directed, and ask your Physician for More (because, as your know, if a Little is Good, a Lot is BETTER!!)
6)  Spend Quality TIme in your BarcaLounger (because you can best Defend the Homeland when you are reclining).
7)  Give Generously to Your Television Preacher (because they love America more than You Do, and remember that the Bible is in English and Jeezus was really American).


F A I T H    &    C O N F I D E N C E    I N    T H E    S Y S T E M !!!!


Department of Homeland Security
Bureau of Compliance, Control, and Credibility!

Wed, 11/16/2011 - 12:01 | 1882817 dereksatkinson
dereksatkinson's picture

The chinese are definitely finding value.  Shandong gold just bid for Jaguar mining for $1 billion which is double it's current market cap. 

Wed, 11/16/2011 - 12:03 | 1882829 Doubleguns
Doubleguns's picture

TZA bitches.

Wed, 11/16/2011 - 12:03 | 1882830 Athemos
Athemos's picture

So I suppose the question is do they finally let is collapse and let us decend to global chaos and New World Order or do they prolong the agony and misery continue a slow burn with QE3 Final Release?  I'm going with slow burn.  They haven't bought the whole entire world just yet. 

Wed, 11/16/2011 - 12:06 | 1882839 ACP
ACP's picture

No need to worry, the HFTs will just implement the "Bernanke Algorithm" and up we go.

Wed, 11/16/2011 - 12:07 | 1882843 alien-IQ
alien-IQ's picture

looks like the /ES is about to go on yet another inexplicable rip fest.

Wed, 11/16/2011 - 12:09 | 1882848 YesWeKahn
YesWeKahn's picture

Options expire in two days, they can't lose it. They will throw in all they can to support this fraud market.

Wed, 11/16/2011 - 12:10 | 1882857 gibbersome
gibbersome's picture

You have been calling for a crash for quite some time. I don't see how zerohedge manages to retain so many readers. Perhaps fearmongering is popular.

Wed, 11/16/2011 - 12:21 | 1882915 Tree of Liberty
Tree of Liberty's picture

Please exit left then to the CNBC propaganda room please as it better suits you - you appear to enjoy a no truth zone!

keep up the good work Tyler of exposing the truth.


Wed, 11/16/2011 - 12:10 | 1882858 gibbersome
gibbersome's picture

You have been calling for a crash for quite some time. I don't see how zerohedge manages to retain so many readers. Perhaps fearmongering is popular.

Wed, 11/16/2011 - 12:12 | 1882872 SheepDog-One
SheepDog-One's picture

LOL, sounds like Yahoo!Finance is more your speed bulltard. 

Wed, 11/16/2011 - 12:23 | 1882923 alien-IQ
alien-IQ's picture

yet here you are...why is that?

Wed, 11/16/2011 - 12:27 | 1882942 fuu
fuu's picture

Hey congrats on the 2 weeks 6 days.

Wed, 11/16/2011 - 12:56 | 1883111 zonkie
zonkie's picture

gibbersome - ZH has not called for a crash in a long time. But don't worry go buy go buy go buy. go go go go go 

Wed, 11/16/2011 - 20:05 | 1885215 gibbersome
gibbersome's picture

You know there are alternatives other than CNBC and zerohedge, right? I rarely watch CNBC. And I view zerohedge for entertainement, less so now than I did a couple of weeks ago. If you want to stay one step ahead, stop looking toward other people to do the thinking for you.

Wed, 11/16/2011 - 12:11 | 1882865 alexwest
alexwest's picture

fucking tired about reading another 2008yy..



FEDS/ECB/everybody knows that , so goverments wont allow banks runs and market crushs


Wed, 11/16/2011 - 12:16 | 1882886 SheepDog-One
SheepDog-One's picture

The 'collapse' this time wont be seen in equity indexes dropping like last time, that was for the issuance of trillions of fiat to ensure the system was completely and equaly broken. No, this time one morning your accounts will just be 'unavailable until further notice' as nukes are going off in major US cities, hey have fun wth all that you big heeled stock market casino gamblers..

Wed, 11/16/2011 - 12:21 | 1882917 alien-IQ
alien-IQ's picture

"goverments wont allow banks runs and market crushs"

Now that's free market capitalism huh?

Wed, 11/16/2011 - 12:14 | 1882878 nobusiness
nobusiness's picture

All this is great and I agree, but what is hard to figure is that it is yearend and the beast needs to get a bonus, so historically fundementals and technical be dammed up up and away.

Wed, 11/16/2011 - 12:17 | 1882895 SheepDog-One
SheepDog-One's picture

Up up and away to where....where we were 6 months ago DOW 12,700? 

Well Im not betting on it, all you gamblers have fun Im out the door.

Wed, 11/16/2011 - 12:15 | 1882881 Oztralian
Oztralian's picture

ZH is the Harold Camping of the financial world.


Aaaand here come the junks.

Wed, 11/16/2011 - 12:20 | 1882912 SheepDog-One
SheepDog-One's picture

What I dont get it the whiners...if youre so happy and confident in stocks, then get in there and get busy buying. I dont see why the great stock bulls need to write about how everyone else has it wrong and everything is just fine. If youre so all-in on these equity markets shouldnt you be off enjoying all your vast profits, or managing all your trading? I think its all BS, none of you has anything at all in the markets youre just annoyance trolls.

Wed, 11/16/2011 - 12:29 | 1882948 Ragnar24
Ragnar24's picture

And CNBC is the Candide (Voltaire)

Wed, 11/16/2011 - 15:15 | 1883700 Jena
Jena's picture

The Dr. Panglosse

Wed, 11/16/2011 - 12:46 | 1883040 fuu
fuu's picture

4 weeks 21 hours...

Wed, 11/16/2011 - 12:18 | 1882898 uno
uno's picture

add in the Dax daily with 200 ema on the daily line, or the weekly; they are not as controlled as our markets

Wed, 11/16/2011 - 12:19 | 1882902 dynamictrader
dynamictrader's picture

Not yet. first we clear the 4 weeks congestion highs, 1270/1275/1280/1289 stops pop first.

Then the buys comes in, everyone wants to be on it. Then maybe we put it a good top, or else, its again, 10-20%

down, and back up again. Remember Nasdaq's run 10% per month for a few months. can we do Nov 10% up, 

again, i don't know, but one thing for sure, alot of people are betting on a collapse, and it cant be so easy. Can it?

Wed, 11/16/2011 - 12:27 | 1882941 sabra1
sabra1's picture

or, for the last 3 years, people were betting the markets can only go up! could it be that easy? 

Wed, 11/16/2011 - 12:19 | 1882907 disabledvet
disabledvet's picture

"Captain! I've just tossed New Jersey out the back per your instructions sir!" "Excellent job! The planes flying much better now airman!" "Sir?" "Yes airman zero class?" "the other states are looking at me funny now sir." "that's okay airman...they always look like that...carry on!"

Wed, 11/16/2011 - 12:20 | 1882911 treemagnet
treemagnet's picture

Anybody remember when interest rates were 6.50% and a 25bps move rocked your world for a few days? 

Wed, 11/16/2011 - 12:21 | 1882914 Yen Cross
Yen Cross's picture

 You guys forgot " Commodities".

Wed, 11/16/2011 - 12:24 | 1882925 dynamictrader
dynamictrader's picture

Casino and Slots. Stock Market and Bots. The Odds are stacked against us.
Use your chips wisely.  

Wed, 11/16/2011 - 12:27 | 1882932 Jalarupa
Jalarupa's picture

Surely if everyone is printing more money and at zero % intrest how can the markets fall...?

Oh wait they tried that already and it did... I'd say short term that Italian 10yr is the ticket... Italy is the most indebted country in the EU and above 7% it becomes nigh impossible to service the run the govt. let alone service the interest on the debt... 

Then there's Japan... Poster child for the soup lines... They print and the print and well... we all know what happens there...

Then there's the USA... if they dip... then its all fuct... all of it...

Wed, 11/16/2011 - 12:28 | 1882945 TheAnarchist
TheAnarchist's picture

Fear Mongering is a business too...


Just look at religion...


Look at political campaigns...


Look at the financial world...


Look at the media...


"Fear" is pervasive.  It is an emotional reaction that can cause one to lose their center.  Many never find it in the first place.


Life is a drama. 


Enjoy the ride, and go long on popcorn.

Wed, 11/16/2011 - 12:30 | 1882952 My Days Are Get...
My Days Are Getting Fewer's picture

I respect CS and like his missives a lot.  However, the timing of this post puts me ill at ease.  Equity options stop trading on Friday on expire on Saturday.  Charles, for the avoidance of sinister doubt, why didn't you publish this next week.

The chart technician may be right - everything might go to hell in a handbasket. But, all the Fed has to show for its massive post-2008 efforts is a propped-up stock market.  The Fed will not permit the indexes to revisit their lows without massive intervention, which could fail.


Wed, 11/16/2011 - 12:31 | 1882960 fuu
fuu's picture

Lot of ZH "credibility" comments today from newly minted accounts. Someone drove forth the sock puppet brigade.

Thu, 11/17/2011 - 01:27 | 1885840 prains
prains's picture

Lot of ZH "credibility" comments today from newly minted accounts. Someone drove forth the sock puppet brigade.

a good haka usually works, stand as a group form a wedge look your opponent in the eye and let them know they are about to be eaten,

works every time. 

Wed, 11/16/2011 - 12:36 | 1882984 BlueStreet
BlueStreet's picture

$ index needs to close above the 20 month (78.42) to confirm further upside.  

Wed, 11/16/2011 - 12:39 | 1883003 AmazingLarry
AmazingLarry's picture

Hyper disinflation bitches

Wed, 11/16/2011 - 12:40 | 1883004 adr
adr's picture

Retailers posting solid gains based on skittle shitting unicorns that live in the land of corporate accounting.

I met with a senior buyer only two steps down from the corporate VP last week and he tells me sales are down massively from last year. Real store sales are down 30% based on the paper that actually says what consumers bought. Yet the numbers are released today to show a 5% gain YoY. How do they keep on doing it?

Reported retail sales are a complete myth. Every single publicly traded retailer works on the same principles of counting shipped inventory as sold. Even if the stores never opened and there wasn't a single customer all year, somehow the retailer would be able to post sale gains.

What is real; The paper given to me buy a senior buyer showing the actual store sale numbers with overall declines of 30%, or the rainbow colored skittle shitting unicorn paper sent out by the CFO to appease Wall Street?

You don't put out a 42" TV for $199 if you think your holiday sales are going to be spectacular.

Wed, 11/16/2011 - 12:40 | 1883005 Alex Kintner
Alex Kintner's picture

There is a line graph in the Black Swan book that shows the Trust Level of a Turkey for 1,000 days as it is fed daily with generous portions. Trust ramps up nicely until Nov 24 (day 999), the day before Thanksgiving, when a Butcher arrives. Ha ha ha.

Wed, 11/16/2011 - 13:22 | 1883219 Roger Knights
Roger Knights's picture

"Turkey Day" cometh!

Wed, 11/16/2011 - 12:44 | 1883028 Dedwards
Dedwards's picture

The absolute best post ive seen on the state of the equity markets in a long time.  kudos

Wed, 11/16/2011 - 12:49 | 1883065 css1971
css1971's picture

Market already crashed on Oct 4th. You missed it.

Western stocks were saved. Go look at treasuries, commodities, eastern markets etc.


Wed, 11/16/2011 - 12:49 | 1883066 quacker
quacker's picture


Analysts talking collapse don’t understand the meaning of Obama. Barack Obama represents the culmination of all the hopes and dreams of most of the media, the Jewish financial world, and much of socialist Europe.

2008 – 2023 will be the known in the history books as the Greatest Depression. But the period of Jan 20, 2009 – Jan 20, 2013 will be known as the Blizzard of Bullshit. Where the situation continually gets worse and worse but a blizzard of bullshit is telling us things are getting better and better.

Then 10 minutes after Obama is gone things will be allowed to collapse. But until then there is no amount of fraud, cheating, lying and financial chicanery that will not be employed to artificially prop things up.

The collapse will NOT be allowed to show itself with Obama around. But the second he’s gone, the facade will crumble.


Wed, 11/16/2011 - 13:00 | 1883126 RoadKill
RoadKill's picture

For those of you that are new here, rule #1 on ZH is to only pay attention to the data presented in the articles. Don't pay attention to any of the speculation or comments. Half the people that write comments are butt-ass crazy gold bugs, perma bears and SHTFers. The other half are just f-ing with you.

This site is THE best place to get the other side of the CNBC story. But it's up to you to take ALL the data and make your own trading decisions.

Personally I don't pay any attention to the end of the world, buy guns and gold stichk anymore then I pay attention to the handful of inbred conspiratorialists and Jew bashers on here. But I do think a freeze up in Europian credit mkts causing a recession, austerity in Europe and US, end of FICA tax cut, end of unemployment benefits, continuing double dip im housing etc... Means 2012 will likely be worse then 2011. Meaning at 1,250 I'm short. At 1,080 I was all-in long and making fun of the idiot that paid me $1 to sell him a $4 put on FAS. If we drop back below 1,000 I'll look to get long again..

Wed, 11/16/2011 - 13:06 | 1883146 Shizzmoney
Shizzmoney's picture

Great chat, well explained and interesting (and scary) data.  I like how the crashes and dips seem to coincide to "reality" that is the months following XMAS.

Does anyone not being paid to lie really think the probabilities favor a breakout here to the upside? Based on what? I know, I know, "seasonal patterns." In other words, we're depending on Santa to deliver the rally everyone needs to stay solvent

This made me LOL

"Seasonal Patterns" have ALWAYS existed, hence why those in the MSM saying, "look, the economy is growing!  Retail up 0.5% before the big rush zzomg!!111". 

But as I mention, this always occurs.  There will be enough Kindle Fires and COD:MW3s to be sold and keep volume up to inspire confidence to investors, but once Santa goes away, reality will play.  That's why after retail revenues come in down in late Jan/Feb 2012 (along with layoffs of those seasonal retail employees), along with Eurozone shenanegians, the crisis will start to begin. 

The Jan 2013 date is upon us.  Get out of debt, buy a gun/non perishables, and get gold.  Its a-comin'.

Wed, 11/16/2011 - 13:24 | 1883232 deepsouthdoug
deepsouthdoug's picture

You talking head&shoulder patterns?  Take a look at Daneric's 20+ year Wilshire head&shoulder pattern....

Wed, 11/16/2011 - 13:28 | 1883240 augmister
augmister's picture

It's the night of December 6th, 1941... we just don't know how much longer the Bankstas can kick the dark down the road...

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