Do you remember this from the beginning of the year on the Max Keiser show in London?
S&P 500 drops below trading range as global selloff intensifies [11]
Chicago Tribune - Aug 20, 2015
Bulls Against Wall as Seven-Month S&P 500 Trading Range Caves [12]
Bloomberg - Aug 20, 2015
S&P 500 Worst Day in 18 Months May Act as Accelerant for Bigger Unwind [13]
DailyFX - Aug 20, 2015
Stock pain: 15% of S&P 500 down 20% in 2015 [14]
USA TODAY - Aug 20, 2015
Stocks Rocked: Plunge Lands S&P 500 Back In Negative Territory For 2015 [15]
Forbes - Aug 20, 2015
God forbid the Fed actually follows up on one of its many bluffs and does inch interest rates up. The real estate markets will collapse. Those who visit NYC and Miami know there's rampant construction ala 2007, despite the fact that supply is really not that sparse. This is all during ZIRP and NIRP, Imagine rates going higher...
Don't believe me? Remember why the market spiked to begin with. FASB was coerced to drop mark to market accounting rules, and everybody forgot why the banks were in trouble to begin with (quick reminder, their balance sheets are trash)... From BoomBustBlog:
I declared insolvency throughout the banking system, and it looked as if I was wrong for some time, then the truth’s ugly head started peaking out. See The Financial Times Vindicates BoomBustBlog’s Stance On Goldman Sachs – Once Again! [17]
Goldman Sachs [18] has revealed details of about $5bn in investment losses suffered during the crisis for the first time this week, in a move that will deepen the debate over companies’ financial disclosures. The figures, issued as part of internal reforms aimed at silencing Goldman [19]’s critics, show that the bank suffered $13.5bn in losses from “investing and lending” with its own funds in 2008. But Goldman’s regulatory filings and its executives’ comments to investors at the time pointed to about $8.5bn of losses arising from its investments in debt and equity, as markets were rocked by the turmoil.
Hmmmm! I walked through this in explicit detail in “When the Patina Fades… The Rise and Fall of Goldman Sachs??? [20]“ and I did it without being privvy to Goldman’s financial innards. Long story short, practically all of the major banks are lying about the value of some of the largest assets on their books.
How many institutional and/or retail investors will be able to ferret out such? Or more importantly, why should they have to? It is the reporting company’s responsibility to report, not to obfuscate. The big problem with this “hide the market marks” thing is that markets tend to revert to mean.Unless said market values fundamentally catch up with said market prices, you will get a snapback. That is what is happening in residential real estate now. That is what happened in Japan over the last 21 years!!! That’s right, it wasn’t a lost decade in Japan, it was a lost 2.1 decades!
Speakng of Miamia, I was Miami Beach just two weeks ago and guess who I bumped into walking down the beach... (go to the 4:10 marker)
Those interested in speculating on property price compression, set up a Veritaseum P2P swap [21]. From an operator's perspective, Veritaseum + Veritas = Use Case To Prevent Banks From Failing The Next Stress Test [22]