patrick.net

The last five days don't look good for the stock market
http://finance.yahoo.com/q/bc?s=%5EDJI+Basic+Chart&t=5d

Look at this stock market chart -current years almost an identical line with 1928-30:
https://twitter.com/DavidBCollum/status/422932634818191360/photo/1

I agree with the points in your article. Question is, how far will stocks fall? I still think that the reassurance of the FED to keep short term rates low will provide some floor to the market. But I wouldn't want to bet my own money on it.

Frankly, those of us that have lived conservatively over the last few years, didn't buy a house, and spent less than we earned (savers) are tired of the government focusing on debtors who make easy money flipping/treating houses like ATM machines. I know there are certainly hard luck cases out there, people that truly needed help with the mortgage on their family homestead. But I also know many people who brag about 30% (or more) yearly home price gains and call anyone who doesn't buy a home and participate in the ponzi scheme various names.

So, we'll see what happens. I still have faith in there being some reward to working hard and saving (as opposed to borrowing and flipping). But who knows. Loved this quote:

"a more apt analogy may be intermission at the Gong Show"

bullshitmagnet says

Frankly, those of us that have lived conservatively over the last few years, didn't buy a house, and spent less than we earned (savers) are tired of the government focusing on debtors who make easy money flipping/treating houses like ATM machines.

Thanks for reading. Your comment reminded me. I was just talking to someone about means testing social security which makes no sense-two people in identical circumstances with identical salaries. One spends all his money and retires with nothing, the other foregoes vacations, new cars etc and retires with $400K. He gets nothing as he doesn't need it and the other gets his social security!

I think the fed will want to intervene in the markets but they may get overwhelmed. I asked this question in a prior post- what happens after the next crash? http://smaulgld.com/what-happens-after-the-next-stock-market-crash-poll/

A good percentage of people think things will rebound soon after the next crash. I don't.

Call it Crazy says

Rebound to where?? There's no place to go... tech is gone, Real Estate will be a no go:, Manufacturing, we don't manufacture much here anymore: Banks are internally insolvent if they did their accounting correctly...

What's left?? Maybe a big war??

What should happen is a natural restructuring of the economy without central bank interference. But it won't. So war or any possible financial interference is possible, including bailouts, bailins, more money printing etc

From an interview with Hermann Göring Nazi founder of the Gestapo, Head of the Luftwaffe, in a jail cell during the Nuremberg War Crimes Trials (18 April 1946) ....

Göring: Why, of course, the people don't want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship.

Gilbert: There is one difference. In a democracy, the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars.

Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.

The purpose of war is to support your government's decisions by force- Starship Trooper Robert Heinlein

What people will do after a stock market crash:

invest in the stock market 18.71% (26 votes)

remain in cash 17.99% (25 votes)

buy gold or silver 42.45% (59 votes)

buy real estate 12.95% (18 votes)

buy treasury bonds 0% (0 votes)

buy foreign currencies 2.88% (4 votes)

buy crypto currencies like bitcoin or litecoin 5% (7 votes)

Total Votes: 139

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

Call it Crazy says

What's left?? Maybe a big war??

Resource depletion and population growth alone mean war. Lots of war.
But, of course, they also have to cover up their catastrophic financial and monetary ineptitudes and frauds, so that accelerates the timeline.
Most of the folks that I think are the smartest truth-tellers all say it ends in war.
And not one of the little affairs that Americans like to root for, or be outraged by, on TV.

Robert Sproul says

Call it Crazy says

What's left?? Maybe a big war??

Resource depletion and population growth alone mean war. Lots of war.

But, of course, they also have to cover up their catastrophic financial and monetary ineptitudes and frauds, so that accelerates the timeline.

Most of the folks that I think are the smartest truth-tellers all say it ends in war.

And not one of the little affairs that Americans like to root for, or be outraged by, on TV.

An unfortunate yet probably inevitable outcome

I seriously hope we can figure this out without having to go to war.

epitaph says

I seriously hope we can figure this out without having to go to war.

Most wars are avoidable but history is full of examples where one or a group of nations actually lobby for war.

Economy is "humming along" will only get stronger
Top Stories on yahoo finance

From Moody's (government chartered)
http://finance.yahoo.com/blogs/daily-ticker/the-economy-is-only-going-to-get-stronger--mark-zandi-212650836.html

http://finance.yahoo.com/news/households-seen-driving-u-fourth-060512346.html

Pending home sales are at two year lows b/c of weather! Could home sales "weather" a stock crash? http://wallstcheatsheet.com/stocks/home-sales-hit-by-perfect-storm-of-surging-prices-and-frigid-weather.html/?ref=YF

Call it Crazy says

The West, which was not impacted by the cold weather but has been logging some of the strongest price gains in the country due to low inventory levels, posted a 9.8 percent drop in pending home sales."

Thanks glad to see someone is not just taking what is shoveled your way.

Call it Crazy says

No one in the media is calling out Larry Yun on his statements.... he should be laughed out of the country, but instead, the major media outlets just shovel out the same B.S. he puts out without questioning the "logic" at all.....

and of course Yahoo features two stories today saying the economy is "humming along and is strengthening"

anonymous says

"Amazon's Bad Omen for the U.S. Economy"

"Amazon.com Inc.'s shares fell almost 10 percent a few minutes past 4 p.m., after the company dropped some disappointing earnings news. That's not just disappointing for Amazon; it's also not great news for the U.S. economy. When retail foot traffic and sales were disappointing in December, the standard explanation was that people must be moving their purchases online. Obviously, they weren't -- at least, not nearly as much as analysts expected."

http://www.bloomberg.com/news/2014-01-30/amazon-s-bad-omen-for-the-u-s-economy.html

Just about all (online and offline) of the retail stores had disappointing results yet the GDP number for the 4th quarter is touting a great quarter for personal consumption! http://www.forbes.com/sites/samanthasharf/2014/01/30/u-s-gdp-grew-3-2-in-fourth-quarter-2013/

Wall Street Journal: "consumers spent readily" in the 4th Quarter
http://online.wsj.com/news/articles/SB10001424052702304428004579352472437635350?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304428004579352472437635350.html

anonymous says

Guess the GDP number will have to be revised later, preferably extremely late on a Friday afternoon when no one is paying attention.

you know the drill!

From the original post:
Since employment is normally a prerequisite for non cash purchasers to buy homes, layoffs will drive down demand for housing. For example, rents and housing prices in the Bay Area have risen to stratospheric levels. After a crash, investors normally reevaluate the prospects of the companies they own especially ones with no earnings. Companies generally respond to falling stock prices by laying off workers in an attempt to reduce their losses. Layoffs in the Bay Area would reduce the number of qualified buyers from the market and take some of the froth off the record high San Francisco home prices.

http://smaulgld.com/how-a-stock-market-crash-will-end-the-economic-recovery/

and just hit the wires San Francisco's Zygna to lay off 15% of work force.

http://betabeat.com/2014/01/zynga-is-axing-15-of-its-workforce/

Call it Crazy says

smaulgld says

Pending home sales are at two year lows b/c of weather! Could home sales "weather" a stock crash? http://wallstcheatsheet.com/stocks/home-sales-hit-by-perfect-storm-of-surging-prices-and-frigid-weather.html/?ref=YF

Yeah right.... Frigid weather....

...."Pending home sales in the Midwest and South declined 6.8 percent and 8.8 percent, respectively. Sales in the Northeast plunged 10.3 percent and are 5.5 percent below a year ago. The West, which was not impacted by the cold weather but has been logging some of the strongest price gains in the country due to low inventory levels, posted a 9.8 percent drop in pending home sales."

More Orwellian analysis
concedes weather not a factor in the south and west but...

http://www.calculatedriskblog.com/2014/01/a-comment-on-pending-home-sales-index.html?utm_medium=twitter&utm_source=twitterfeed

bgamall4 says

When the dot com bubble broke, everyone went into housing. I wonder how that would play out this time?

Here is a poll

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

and results

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

invest in the stock market 17.93% (26 votes)

remain in cash 17.93% (26 votes)

buy gold or silver 42.76% (62 votes)

buy real estate 13.1% (19 votes)

buy treasury bonds 0% (0 votes)

buy foreign currencies 2.76% (4 votes)

buy crypto currencies like bitcoin or litecoin 5.52% (8 votes)

Total Votes: 145

bgamall4 says

So a plurality will buy gold and silver. Yet the world will unwind their positions in gold and silver leveraged up, and the result will be???

I guess that is when we see the difference between the selling of paper gold to cover margin calls and the buying of physical gold vaulted outside the banking system