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Guest Post: It Sure Looks Like 2008
From Tony Pallotta of Macro Story
It Sure Looks Like 2008
"He observed that human emotions collectively had major impacts on the on stock prices and the patterns seen in the Stock Markets in general." - From a book on the teachings of Jesse Livermore
When you think of it in the short term markets are nothing more than a group of people trying to process data and understand what others are doing all under the stress of losing personal wealth. They are trying to solve a problem that in may ways is not solvable unless one can adapt. Similar to a group of Navy SEALs on a mission. They are successful only if they can adjust to the changing situation. There's a reason few are SEALs and few are successful in this business.
At times like these markets are more about human psychology and less about technical and or macro data. That is why I wrote about the 2007 topping pattern as compared to the market in June and July. The macro data in both instances was deteriorating yet equity markets refused to listen to falling bond yields, falling commodity prices and countless credit products. Then the recession hit, the data deteriorated fast and ill prepared markets were forced to catch up.
Now I believe it is time to fast forward to the fall of 2008. Once again the 2008 market is a road map of how human emotion reacts when credit events happen. When economic data deteriorates at an exponential pace. When the unthinkable becomes reality.
The volatility skew relative to the vix captures market sentiment very well. Overlay any such chart with the SPX and the similarities are without question. So for all those pundits who say this is not 2008 I present the following chart. Once again markets are pricing in the unthinkable. In 2008 history witnessed the failure of Lehman, AIG and the GSEs. Today history is bearing witness to sovereign nations on the brink of failure. In 2008 there was the threat of bank runs. Today there is the threat of currency runs. In 2008 there were government bailouts. Today there are central bank bailouts.
Through it all market participants have not changed. They are still a group of individuals trying to process data and understand what others are doing all while real money is on the line. As history has proven once again they will get it wrong. Once again leverage will destroy balance sheets. Denial will get in the way of rational thought. History truly does repeat and the patterns are present in the charts.
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Looks like 2008? not really, gold is not $500/oz.
Shhhh, are you trying to wake the CME margin increasing bastards up.
That pony has played it's one trick. They tried it again with Gold and all that pony got was an $1,800+ brand burned in it's ass.
+1
According to my receipts, most of my gold is $500/oz. ;)
You seriously need to return your gold and get the $1800 kind. Actually, I've got a few $2000 golds if you are interested.
The same receipt you will get soon from government, forced.
Yeah, he better unload that crap fast. I'll give him $750 oz right now.
Monetary half-life getting shorter, bitchez!
This is the greatest buying opportunity moment the world has ever seen!
No, this is!
No....THIS is!
It just keeps getting better and better the worse things get and the lower it goes!
LOL how about those guys they parade on CNBC, calling a bottom every 10 points down on the SP.
Don't be silly, everyone knows it's not a bottom until Cramer throws in the towel. Hasn't happened yet, therefore we're still in free fall mode.
same canyon? check.
same weather? check.
same lone ranger and tonto? well, not exactly, but there are similarities.
same horses? check.
same indians? well, there do seem to be a few more, this time around.
does history repeat? No.
This time, the lone ranger has no bullets .....
By the time this is played out, you will WISH it 2008!
...unless you have PM, of course.
Put/call closed at a record high of 1.49 today, fwiw....
http://www.wallstreetbear.com/board/view.php?topic=85895&post=307618
nomo momo
Hows that NFLX trade working out?
We're starting the next leg down with much less dry powder
My question is do we continue with that leg down tomorrow... or is this going to be a little more of a drawn out process (perhaps extending into next year). Doug Kass says the XLF is going to be up 10-15% in 2 months and up 50-100% in the next 12, so I guess that means we're headed lower right away.
I know that the worst thing that could happen to my portfolio is a long sideway drag, killing all my calls and puts.
You might consider selling some furrher out strikes puts and calls to hedge? Volatility is probably up from when you bought your puts and calls so you may be able to capture some decent premiums. Good luck!
Blowoff top in 30-yr. bonds today as Tom Keene's jaw was dropping on the floor this morning.
http://finviz.com/fut_chart.ashx?t=ZB&cot=002602&p=d1
ignore. u=>0
How are those GLD puts working out?
It can't be like 2008. Why? Because I read an article Yahoo Finance from CNBC that it wasn't like 2008.
Case closed!
2011 looks nothing like 2008.
2008 has two boobies stacked sideways on the end, 2011 has two sticks.
Exactamente
I came here to post the same thing. It's off the front page now, but the moment I saw it, I said there's your mainstream media denial, which confirms it's exactly like 2008!
Enough of that crazy-talk. This is nothing like 2008...
2008 was all GWB's fault.
This time it's those pesky tea-partiers.
can't believe our perfect utopian pelosi-paradise where no one has to work and money is free is being trampled underfoot like this.
That's it- I'm calling the President of my local Bilderberg chapter.
I do declare it's high time for Senora Pelosi to take another trip to Syria. Maybe outfit her with a headscarf with "Assad Rocks" embroidered on it.
I think this is a bit worse than 2008...the convusions are worse. I think there will be one more stick save that will last into Q1-2 2012...then the game is over. Or the powera that be will just step away and let it fall sooner rather than later.
Either way a major conflict or series of medium ones will break out. ME will start things off, followed by Asia.
It is worse: political instability that was not present in 2008.
How is it more unstable now? One party rule has always been disastrous.
LBJ 1963-1968
Jimmy Carter 1976-1980
Bush Jr 2002-2006
Obama 2008-2010
I think he was referring to the international scene. World > USA.
China reaffirmed recently that any attack by NATO or another entity on Pakistan would be considered an attack on China. The U. S. is itching to dismantle the Paki nukes. Stay tuned.
Whatever..I have some cheap, "disposable" shit to buy from Walmart made from our friends in China. /sarcasm
Another word for the globalization loving crowd is liberal.
yep the next FF will be something that strangles oil supplies
and of course the dinner table is set for the ME to be blamed
the last act of masking peak oil effects and racking the world into rationing/martial law/kill off
think about it
Oil dropped to $33/brl in March 2009. Marginal demand determines prices.
wrong EROEI determine prices
Didn't I write exactly this just a couple of days ago? I'm sure I did . . . and didn't I call it . . . uh, something like . . . "The Sequel"?
http://gonzalolira.blogspot.com/2011/08/sequel-how-2011-is-repeat-of-200...
You know, I think I even got interviewed on it on The Alyona Show . . . or was I dreaming?
GL
I actually printed this out and distributed around my office. Well done ;)
Thats not a dental office, is it?
:-)
ah, but yours did not include snazy chart..
We didn't have this in 08:
Recent readings taken at the [Fukushima Daiichi] plant are alarming.
When on August 2nd readings of 10,000 millisieverts (10 sieverts) of radioactivity per hour were detected at the plant, Japan's science ministry said that level of dose is fatal to humans, and is enough radiation to kill a person within one to two weeks after the exposure.
10,000 millisieverts (mSv) is the equivalent of approximately 100,000 chest x-rays.
It is an amount 250 per cent higher than levels recorded at the plant in March after it was heavily damaged by the earthquake and ensuing tsunami.
"How much radioactive materials have been released from the plant?" asked Dr Tatsuhiko Kodama, a professor at the Research Centre for Advanced Science and Technology and Director of the University of Tokyo's Radioisotope Centre, in a July 27 speech to the Committee of Health, Labour and Welfare at Japan's House of Representatives.
According to Dr Kodama, the total amount of radiation released over a period of more than five months from the ongoing Fukushima nuclear disaster is the equivalent to more than 29 "Hiroshima-type atomic bombs" and the amount of uranium released "is equivalent to 20" Hiroshima bombs.
And no news at all about it any more. Amazing. Full scale media blackout.
Something like the MSM reporting of the strawpoll and how Ron Paul wasn't even there! According to the MSM.
After the Fukushima disaster thunder thighs Hillary Clinton flew over to Japan and agreed that the U. S. Government's stance regarding foodstuffs imported from Japan to the U. S. is that they would be safe! So our masters are not even testing imported food coming from Japan!
Japan would do the same for us. It's not like they banned the importing of American beef when Mad Cow disease hit, is it? /sarcasm.
We need a candidate for President who will make sure we are not the world's bitch.
2008?
Please -- this is going to be much worse
2008? We should be so lucky.
Hardly any dominoes had fallen then.
Now they're either not telling us or lying.
No shit.
2008 ~ Sound made when fireworks leave the tube.
boom.
Now ~ Fireworks.
KABOOOOOM!
And the ChairSatan drove up inflation in all things that the poor need to exist
Hitler was Robin Hood by comparison to the BenRon's GLOBAL genocidal (as in all of the human race) activities
2008: Banks saved by sovereign faith and credit
2011: Faith and creditless sovereigns saved by ?
Martians
2012: "Green" Aliens bail us out if we agree to cut our excess greenhouse gases...
http://www.guardian.co.uk/science/2011/aug/18/aliens-destroy-humanity-protect-civilisations
Benny Bucks
"We're only going to do what works."
The Messiah, shortly after he was annointed;))))
Come on, m...fuckers. I am sick and tired of this fearmongerers. NOTHING IS GOING TO HAPPEN.
Do not listen to these pathetic, stupid jerks.
Hope for the best and plan for the worst. Only a stupid jerk would think otherwise.
Apparently, Defencev thinks it's a more prudent to "assume the best and why bother planning?"
Uh, Dude, oil was down six bucks today, and European banks are in free fall. What are you doing here?
Obviously, he's working some scam. Fleecing windows and orphans
I've got insolvency fatigue. Die already.
Why won't you die!
http://www.youtube.com/watch?v=LGGPufySwZ4
Inversed OT.
On the bright side - this huge double bottom will likely resove to about Dow 25,000 sometime in the 2020's
When $1,719 buys you a Big Mac in Zurich.
Well, at least I know how long I have of sleepless nights...another 9 years....during which time we'll have bank failures, bank runs, non-existent credit (no need to worry about interest rates - no supply nor demand on borrowing), currency crises, 30% unemployment, hyper-inflation, more home foreclosures (which won't matter, cuz ppl will just squat there, as banks will have more on their hands to deal with) civil unrest (to put it very mildly). Only silver lining will be silver & gold - and not get rich but to get by.
Double bottom? We haven't hit the first bottom yet. The 2009 lows will be taken out long before the last chapter in this story is written.
Can't we coun't March 2009 as the first bottom? It's just been Joy Jell and QE since then.
You probably have a smaller number in mind for DJIA than 6500. So do I.
Obama, Geithner and Bernanke have kicked this can down the road for three years and have reached a dead end.
To quote Ed Rooney "Les jeux sont faits"
am i stoned or does the 2011 line look a little uh.. extended? possibly to fit the 2008 line? or is it really sept already?
It appears to be. You may still be stoned though.
Just wasted 3mins of my life reading this nonsense. Complete load of BOLLOCKS.
And another thing: I'm sick & tired of hearing about Jesse Livermore - made one bet too many... but you don't hear about that.
Have a Nice Day.
Well, denial does work for some folks.
the cost of maintaining goods with fiat is more worhtless fiat...the cost of maintaining PMs ?.....ammo.
Too right! Mr. Smith & Mr. Wesson's 357 mag with full wad cutting hollow points!
The 5 min looks like we have a bottom. The 60 min looks like one more blowdown till we are done. The daily looks like a good bottom IF we go up fri or Monday without more downside. The weekly looks like we could extend as not super oversold yet. The monthly HOWEVER, is NOT oversold and although has generated a ema sell signal IS NOT OVERSOLD BY A LONG SHOT and hauntedly appears to be exactly like the LTCM disaster correction. Trade well my friends and stay thirsty.
Each of you owe me $100 for this consultation. :)
I wonder if those high paid algo writers have figured out how to do pattern recognition in real time? If so, the crash comes in 3, 2, 1 nanoseconds.
Just like old times and for a real knee slapper
"SEC may have destroyed documents!"Yep, it seems SEC may have trashed some of those vintage 2008 documents:
http://www.marketwatch.com/story/sec-may-have-destroyed-documents-senato...
"SEC", wow, I mean, really, what a useless organization......
BOJ to intervene tonight. It will last 3 days this time. Or less.
i liked its not 2011 better, or 2008 redux :)
Gold over $1,830
Wow.
And silver looks beautiful also. Stable. If there were a correlation with oil, its not showing right now.
RobotTrader, do you answer to random people sometimes? Or do you have too much CPU workload to do so?
$1836 spot
Watched Jim Rogers interview in 1st week of Aug predicting higher gold to come.
The reporter said, "could it go to $2000 by end of 2011?
Rogers said, "no, at least, I hope it doesn't!"
Implying, things would have to be really bad, and getting worse for that.
And here we are only three weeks later looking at the realistic prospect of that occurring by end of 2011.
Obama who?? ......OH! You mean that dude who dresses up like POTUS?
More like IM-POTUS
and here I thought you were going to post something about Obama canceling his vacation! Silly me! Have read that he has deported over a million illegal immigransts and must be taking ehat from the left. Nobody appreciates "moderates" these days. Bummer.
I have just bought ILUKA mining (ILU) on Australian stock exchange using another slump (Rare Earth miner). You do not expect me to buy US treasuries? Are not you? If you are interested in PM buy palladium. It is hugely behind the other three. Nobody can live fearing everything around for such a long time. Just fuck these fearmongering jerks!
This is not like 2008. I had very little silver and no gold in 2008.
Through it all market participants have not changed. They are still a group of individuals trying to process data and understand what others are doing all while real money is on the line.
Isn't this a little aw shucks-ish?
ZH and its posters (love you both) have instructed me, the could-be retail investor, to see the Skynet behind the curtain.
That's it. Going to start acquiring the physical. PMs, Bullets, Alcohol, Tobacco, Chocolate, and Barb Wire.
And plant a garden with a care provider designation to boot.
That's all I need.
and this lamp
From a semi-industrial supervisor for a luxury yacht vendor, it is far worse than 2008. In 2008 I oversaw 15 other employees, the bulk of which handled line production supply for 20-30 new yachts a month for Silverton/Luhrs/Mainship. By the second month of 09 I had four people in my department and I was the main gun. Yachts built per month have steadily dwindled since then as both my company and those we supply have have issues making ends meet. Today they build a new yacht every 3-5 weeks, despite a fresh schedule that optimistically calls for building 3-4 a month.
Much worse than 08, but then it never got any better on this end of things. The past three years we have spent on the edge of doom, and it seems that doom is now way overdue. Numbers don't lie, folks. It's just that simple.
Different industry, same issues!
DISI!
Give it a name friend!
Good. Glad to hear it. Last thing this world needs is bloody great superyachts made out of non-biodegradable shit for rich bankers to flaunt their ill-gotten gains at the proles who can't afford bread and a roof.
you are one angry prole
There are plenty of hundred millionaires in the world. Have they all given up on getting new yachts?
Very interesting.
.
I hate to be maudlin, but in 2008 we had plenty of hope. Hope that it wasn't as bad as it appeared at first glance. Hope that the Democrats and Bernanke could reassemble things and get up another head of steam. Hope that the two parties would put aside their ambitions and work together for the good of the Republic.
In 2011 things are quite a bit different. It seems like everyone has taken a haircut, except for the gold bugs.
And others think that the haircuts will soon be compliments of Madame la Guillotine.
check out my take of the whole scenario... published a week ago..
“To some this downturn may seem like a destructive event, the economic crisis is actually a constructive event that paves the way for the future [silver, gold, bitcoin] … The stability of several major European banks has been seriously threatened and government leaders are in constant teleconferences to discuss how to halt the crisis. The US, on its part, has lost its status as AAA and 7 trillion dollars of stock value has gone up in smoke … Yet, a downgrading of the US creditworthiness and the loss of 7 trillion dollars of stock value really does not mean anything except that the numbers associated with certain papers have been depreciated. It is thus essentially correct when commentators say that so far the crisis has not had any effect on the ¨real economy.¨ The recent fall in the markets simply shocked the mental duality between abstract values and real values. There is however no reason to expect that it will be possible to limit the crisis to the ¨unreal economy¨. Thus, I expect that now also the real economy will be hit. How quickly this will actually manifest is hard to tell but I expect that events will lay the foundation for massive unemployment in many major Western countries (It is of course high already, but for many it has still been possible to keep on with the previous lifestyle). I also expect that there will be a large runaway from the stock markets and the stability of currencies will be negatively affected to a point where new radical solutions need to be considered … I think it is realistic that there will be some kind of political reaction to the developing chaos” - Carl Calleman
http://dont-tread-on.me/money-banksters-and-august-2011-%E2%80%93-the-co...
Actually it's worse. We have nations/central banks failing, AND we have regular banks failling.
So it's 2008+new shit = >2008
Glass-Steagall
In so far as a war with Pakistan is concerned, they have been participating in serious war games for quite while. You better check this out.
http://www.wimp.com/indiapakistan/
With respect for both you and Glass Steagall
Talk about locking the barn door after... well, you remember this:
"Mac Arthur's Park is melting in the dark
all the sweet green icing flowing down
someone left the cake out in the rain
I don't think that I can take it
'cause it took so long to bake it
and I'll never have that recipe again
Oh, nooo!"
300 million people in this country want a piece of that cake -- 7 billion world wide.
I can't google that recipe again.
Why don't you try?
Living through a currency devaluation and how to cope
In 1976 I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.
One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.
Read more
http://lonerangersilver.wordpress.com/2011/06/20/living-through-a-curren...
Looks like 2008 -- except WORSE!