patrick.net

spydah_hh says

But that's not all their political system and system of government isn't made for sustainability. It's communist all wealth is redistributed by the government and we all know governments can't determine what the mass of individuals (the market) want. Without the will for people to make the determination of prices or purchases they want/need you can't have an effective economy.

They too have been trying to keep the party going by building empty cities. They are already revaluing their currency higher but they still have interest rates that are too low. To me the real determining factor will be that they do not have private property so what is the motivation of the citizen? Will they go to war to solve their financial problems?

indigenous says

spydah_hh says

But that's not all their political system and system of government isn't made for sustainability. It's communist all wealth is redistributed by the government and we all know governments can't determine what the mass of individuals (the market) want. Without the will for people to make the determination of prices or purchases they want/need you can't have an effective economy.

They too have been trying to keep the party going by building empty cities. They are already revaluing their currency higher but they still have interest rates that are too low. To me the real determining factor will be that they do not have private property so what is the motivation of the citizen? Will they go to war to solve their financial problems?

Right. Tell you the truth China is in no different shape than the U.S. Same with the rest of the world, as all currencies is pegged to the dollar anyway. Which means if the dollar falls so does the rest of all other currencies.

It depends on how the dollar falls. If it just collapses before a new monetary system is put in place, I think a war is likely. If they replace the dollar before it's collapse then I believe we'll see big depression globally a war may still come though as there will still be losers.

Touch myself inappropriately

The question needs to be raised again- as the market starts to crumble what will you do?

smaulgld says

The question needs to be raised again- as the market starts to crumble what will you do?

I currently am not in the stock market, don't have a 401K or any investments because I am of the belief that the average citizens does not have enough inside information to navigate the market successfully long enough to get out without losses to most of there principle investment. I look at the stock market like I look at going to Atlantic City or Vegas; you don't bring your life savings there to gamble and when using money there, it must be considered risk capital or money you can afford to lose. With that said, the market tops we've been seeing are caused by the excess of money in the system, QE and all of the government manipulation. When those manipulative forces disappear, the market will crash hard and prices will return to normal. Unfortunately, for most people "normal" could mean bankruptcy and/or destruction of their once great portfolio. There will be of course some winners who have great timing and walk away at the right moment but for most, there will be pain and suffering as they watch their dreams of retiring with wealth and luxury evaporate in quick fashion...

mfs.admin says

When those manipulative forces disappear, the market will crash hard and prices will return to normal. Unfortunately, for most people "normal" could mean bankruptcy and/or destruction of their once great portfolio. There will be of course some winners who have great timing and walk away at the right moment but for most, there will be pain and suffering as they watch their dreams of retiring with wealth and luxury evaporate in quick fashion...

The recovery has been based on the stock market rising and will end as it crashes. Thanks QE!

APOCALYPSEFUCKisShostikovitch says

Start shooting like everyone else.

The yams are planted.

and so it begins

smaulgld says

APOCALYPSEFUCKisShostikovitch says

Start shooting like everyone else.

The yams are planted.

and so it begins

http://www.youtube.com/embed/3qYbVQu7YAQ

APOCALYPSEFUCKisShostikovitch says

Start shooting like everyone else.

The yams are planted.

Screw Robert Duvall: Someday this war's gonna start!

AF, this note's for you:

take advantage of the buying opportunities that present themselves.

EastCoastBubbleBoy says

take advantage of the buying opportunities that present themselves.

if stocks crash due to lack of profits to justify their valuations and there is no QE will there be a buying opportunity?

Sbh says
Show me one that hasn't been so ( a buying opportunity)
--------
From the original post

:

We may be nearing the end of the Fed’s ability to pick up the pieces after a crash. Before 1987 stocks did not always rebound so quickly and there have been generational losses in the stock market. It wasn’t until 1955 that the Dow returned to its 1929 peak. In 1966 the Dow was 1,000 and in 1974 it was 616. In the 70′s stocks fell for so many years to the point where a Businessweek magazine cover proclaimed – The Death of Equities. The Dow did not return to its 1966 peak of 1000 until 1981.
http://smaulgld.com/what-happens-after-the-next-stock-market-crash-poll/

Stock markets in recent times have recovered quickly because of federal reserve intervention. The question is does the federal reserve have the ability to pick up the pieces this time when interest rates are already zero and they have already dumped more than $4 trillion into the market

Perhaps it is true the stock market "always" recovers but In the two examples I gave it took between 15-25 years.

Buying opportunity.

zzyzzx says

Buying opportunity.

Maybe not this time....

curious2 says

AF, this note's for you:

Steal your face right off your head

There might be a correction, but short term interest rates are too low for a stock market crash.

bullshitmagnet says

There might be a correction, but short term interest rates are too low for a stock market crash.

And too low to revive a crash if it did happen

What park does she run in and how'd she get hurt?

sbh says

You can't, because even if you trot out the Nikkei you haven't eliminated its possible future recovery.

SoftShell says

What park does she run in and how'd she get hurt?

sbh says

You can't, because even if you trot out the Nikkei you haven't eliminated its possible future recovery.

Of course a recovery is possible in your lifetime. The question is whether there are better places to put your money in the interim?

bullshitmagnet says

There might be a correction, but short term interest rates are too low for a stock market crash.

And banks too solvent? http://patrick.net/?p=1237332
DB also just announced a $1.2 billion fourth quarter loss

watch everyone else flounder as I collect rental income for the rest of my natural born life.

smaulgld says

What Will You Do If/When The Stock Market Crashes?

SoftShell says

watch everyone else flounder as I collect rental income for the rest of my natural born life.

smaulgld says

What Will You Do If/When The Stock Market Crashes?

That might work assuming your renters werent harmed too much in any stock market crash
A good position would be to have some sort of steady income

smaulgld says

Perhaps it is true the stock market "always" recovers but In the two examples I gave it took between 15-25 years.

I've got plenty of time... I invest for the long haul.

LOL....no but that's a good one!

Call it Crazy says

SoftShell says

watch everyone else flounder as I collect rental income for the rest of my natural born life.

Roberta, is that you??

...Lost one round, but the prize wasn't anything but a knife in the back and just more of the same...

Rat in a drain ditch!

sbh says

And then there's the old diversification chestnut. There will always be under valued securities, even in the height of irrational exuberance. I never lost a dime during the tech/NASDAQ meltdown....just didn't own 'em.

That is the key knowing when to be in or out of the market.
My thesis is that stocks don't always recover rapidily. They will recover if the fundamentals are sound and or the Fed comes to the rescue.
I am not sure the fundamentals are sound or the fed will/can come to the rescue this time.

sbh says

smaulgld says

My thesis is

and you may be right on both counts. But being "in or out" is a thing much more easily said than done. My concept is "you have to be in (something)", and rather than trying to time the market I make sector bets. Just my thing.

after a crash is a good time to assess whether you should still be in stocks or whether you should hold cash or invest in real estate or something else.

The point of the original post was that since 1987 it has made sense to dive right back in, but after 1929 and during the late 60's and early 70's it didn't make sense to hold stocks

sbh says

make sector bets

another good point- even in down markets some sectors perform well.

As the stock market heads down, it's worth asking again

What will you do if the stock market corrects 20%

invest in the stock market 17.34% (30 votes)

remain in cash 16.18% (28 votes)

buy gold or silver 42.77% (74 votes)

buy real estate 12.72% (22 votes)

buy treasury bonds 0% (0 votes)

buy foreign currencies 2.31% (4 votes)

buy crypto currencies like bitcoin or litecoin 8.67% (15 votes)

Total Votes: 173

Before, during, or after the correction, or a combination thereof?

smaulgld says

What will you do if the stock market corrects 20%

prodigy says

Before, during, or after the correction, or a combination thereof?

smaulgld says

What will you do if the stock market corrects 20%

The poll question in the blog post is after a 20% correction but answer however you wish

http://smaulgld.com/what-happens-after-the-next-stock-market-crash-poll/

Stock market crash means RE prices has to go up!

bubblesitter says

Stock market crash means RE prices has to go up!

we learned that here from the gurus and oracles

UPDATE:

If the stock market corrects more than 20% will you:

invest in the stock market 18.61% (43 votes)

remain in cash 14.72% (34 votes)

buy gold or silver 41.13% (95 votes)

buy real estate 15.15% (35 votes)

buy treasury bonds 0.43% (1 votes)

buy foreign currencies 2.16% (5 votes)

buy crypto currencies like bitcoin or litecoin 7.79% (18 votes)

Total Votes: 231

Other countries like Belgium are picking up the slack from China to buy US Treasuries. A reduction of QE will not lead to the requirement to raise US Treasury rates in order to make them attractive. There will be foreign and domestic buyers for them.

The NY Times reports that the Defense Dept is cutting back like reducing the size of the US Army. Anticipate that the federal budget will be held in check as a percentage of GDP. The amount of US Treasuries issued will be lower as the deficit is reduced. Hence, lower and lower deficits should continue to keep interest rates low.

Per multpl.com the S&P 500's Shiller PE ratio is around 25 and near the same level it was at back in 2008. The same holds true for Warren Buffet's Total Market Cap vs GDP ratio (i.e., 115% currently with anything below 110 is normal or undervalued).

The natural gas and oil boom should help to keep inflation in check.

It is a good idea to hedge with 10 to 25% of your savings in real assets such as real property and precious metals. Vanguard Precious Metals Fund is a good holding to provide you the precious metals exposure.

Wake up and drink a beer

Oh, just watch and wait while our "government" bails out its bosses.