Credit-fuelled US stock market now ripe for a major crash

[dancingshoes]

The chart below traces the performance of the S&P 500 over the past couple of decades and compares it to NYSE investor credit. Even the most ardent bull ought to have a sharp intake of breath.

Not since 1929 has this Wall Street roadmap looked anything like so dangerous. It’s credit expansion that turbo charges stock markets to the upside but history suggests that it always runs out in the end.

Bond alert flashing red

The longer the party the bigger the hangover after that happens. Global bond warnings have been flashing red for the past few weeks and the professionals are alarmed although few retail investors really get the message.

Unstable bond markets are the canary in the coal mine singing its warning of poison gas coming the way of the stock market. So too is the smaller and smaller number of shares supporting the S&P 500 index at its current lofty levels.

One small uptick in Fed rates or a Greek default as soon as tomorrow and this great bubble is over and what has gone up so far will have a long way to fall…



http://www.arabianmoney.net/us-stoc...d-us-stock-market-now-ripe-for-a-major-crash/

 

[virus]

it has always been known the rally has exceeded the average cycle for correction. october will be the likely time. now is the trigger. whether is greece or somewhere else new.

 

[dancingshoes]

greece is owing troika too much money, if they stay on in EURO, it will pull them down with it. there is also contagion that spain and portugal will follow suit.

simply, either way they stay or exit also die...


“The shadow of a Greek exit from the euro zone is becoming increasingly perceptible,” German Economy Minister and Vice-Chancellor Sigmar Gabriel wrote in a Bild newspaper opinion column to be published on Monday. “Greece’s game theorists are gambling the future of their country. And Europe’s too.”


http://www.bloomberg.com/news/artic...talks-aim-at-agreement-before-monday-iawiyjq5

 

[Runifyouhaveto]

I appeal to our friends here to be more thrifty, going forward.

 

[Schneiderlin]

I appeal to our friends here to be more thrifty, going forward.

I appeal to our friends here to stop gambling and keep your hard earned savings in Milo tins.

 

[winnipegjets]

No one has a clue the crash will come. For the last few years, there has been talk about a big crash. We know it will come, when, no one knows.

 

[numero uno]

I appeal to our friends here to be more thrifty, going forward.

hahahhah. tell it to the 3 whining stooges(narong xebay sggonewrong) who are always trying to talk up the stock and prop market till cows come home and pigs can fly. all now panicking and praying hard Mers virus, greece default and the stock market crash all don't happen at the same time or they would cry mother , cry father and jump out of their pigeon holes..... the show has begun. enjoy it fellas. never say I didn't warn these clowns.

 

[Runifyouhaveto]

No one has a clue the crash will come. For the last few years, there has been talk about a big crash. We know it will come, when, no one knows.

Even Korea cut rates a few days ago to match china + depreciate against USD (to challenge JPY)
Now housing loans in Korea at below 2% and Australia is also cutting rates. (both at historical lows)
Does it mean u should borrow more now to let money grow money?

Maybe not
Car sales in Indonesia and Malaysia have crashed by 1/3
Recession is coming - consider reducing your gearings, dun anyhow spend money and save your bullets

 

[Runifyouhaveto]

hahahhah. tell it to the 3 stooges who are always trying to talk up the stock and prop market till cows come home and pigs can fly. all now panicking and praying hard Mers virus, greece default and the stock market crash all don't happen at the same time or the would cry mother , cry father...... the show has begun. enjoy it fellas. never say I didn't warn these clowns.

The end is near
But we are not there yet
Still got some time to properly exit
RUN if you have to

 

[dancingshoes]

china too...have been cutting rate.

bro run, you are a simple and clever analyser, i am very glad to have learnt from an intellect.

i doubt fed will hike rate this year, never smooth sailing for them. bound to have big rocks hindering the way.
on the other hand, if they delay their hiking, too much deflation will kill them.
checkmate on america and europe...

Even Korea cut rates a few days ago to match china + depreciate against USD (to challenge JPY)
Now housing loans in Korea at below 2% and Australia is also cutting rates. (both at historical lows)
Does it mean u should borrow more now to let money grow money?

Maybe not
Car sales in Indonesia and Malaysia have crashed by 1/3
Recession is coming - consider reducing your gearings, dun anyhow spend money and save your bullets

 

[Runifyouhaveto]

china too...have been cutting rate.
bro run, you are a simple and clever analyser, i am very glad to have learnt from an intellect.

Paiseh brother, i dont want to lie to you. ah RUN is a buay gan loser in trying to find a place to hide in the cyberworld. Nobody listens to him in real life so I am useless. Don't be like me.

i doubt fed will hike rate this year, never smooth sailing for them. bound to have big rocks hindering the way.
on the other hand, if they delay their hiking, too much deflation will kill them.
checkmate on america and europe...

Earlier, I shared that there are two school of thoughts:

- Delay the rate increment and boost the lacklustre US manufacturing sector + support a booming property market to suck money from the rest of the world OR

- Rate hike of 50 basis point this year and destroy the economy of their enemies, triggering a higher cost of borrowing for enemy-states and meltdown in their currencies against USD.

See, whatever they do now, is correct. The US economists are so smart, their efforts in the past 7-years have paid off. They can harvest now.

 

[dancingshoes]

bro run, if you feel that way is because you have very very high hopes and expectations of yourself. i think you are doing much better than many here, no offence to others...:p

as for your point on america, they have been attracting smart money with their low rates since the mayhem of lehman. when they are finally here, they are hit with rocks from the rest of the world who do not wish to see them succeed, politics in play here. there was a forummer who mentioned about too strong an america which cause the asia financial crisis in 1997. i think can google it.

Paiseh brother, i dont want to lie to you. ah RUN is a buay gan loser in trying to find a place to hide in the cyberworld. Nobody listens to him in real life so I am useless. Don't be like me.



Earlier, I shared that there are two school of thoughts:

- Delay the rate increment and boost the lacklustre US manufacturing sector + support a booming property market to suck money from the rest of the world OR

- Rate hike of 50 basis point this year and destroy the economy of their enemies, triggering a higher cost of borrowing for enemy-states and meltdown in their currencies against USD.

See, whatever they do now, is correct. The US economists are so smart, their efforts in the past 7-years have paid off. They can harvest now.

 

[winnipegjets]

Even Korea cut rates a few days ago to match china + depreciate against USD (to challenge JPY)
Now housing loans in Korea at below 2% and Australia is also cutting rates. (both at historical lows)
Does it mean u should borrow more now to let money grow money?

The US economy is weak ...don't expect rates to go up. The fundamentals are catching up and stocks are slowly tanking.

http://americasmarkets.usatoday.com/2015/06/10/yikes-a-fifth-of-big-stocks-in-bear-market/

Car sales in Indonesia and Malaysia have crashed by 1/3
Recession is coming - consider reducing your gearings, dun anyhow spend money and save your bullets

Recession is coming ...because the current split of wealth and income is unsustainable. The driver of growth is the consumption of the working class and when there isn't enough income going to this group, there won't be increase in consumption. So, where is the growth coming from? The rooster is coming home to roost.

 

[winnipegjets]

greece is owing troika too much money, if they stay on in EURO, it will pull them down with it. there is also contagion that spain and portugal will follow suit.

simply, either way they stay or exit also die...


“The shadow of a Greek exit from the euro zone is becoming increasingly perceptible,” German Economy Minister and Vice-Chancellor Sigmar Gabriel wrote in a Bild newspaper opinion column to be published on Monday. “Greece’s game theorists are gambling the future of their country. And Europe’s too.”


http://www.bloomberg.com/news/artic...talks-aim-at-agreement-before-monday-iawiyjq5

Greece has been shouldering the burden of debt for 6 years and the troika wants it to continue. Greeks have no more stomach for it; it is better to just default.
France and Germany had to and may still have to bail out their banks when Greece default. It is time the banks take the hit for careless lending.

 

[RobertZieler]

The US economy is weak ...don't expect rates to go up. The fundamentals are catching up and stocks are slowly tanking.

http://americasmarkets.usatoday.com/2015/06/10/yikes-a-fifth-of-big-stocks-in-bear-market/

Recession is coming ...because the current split of wealth and income is unsustainable. The driver of growth is the consumption of the working class and when there isn't enough income going to this group, there won't be increase in consumption. So, where is the growth coming from? The rooster is coming home to roost.

Altogether now... Huat Ah !!

 

[frenchbriefs]

what does the red portion of the chart represent?means people selling bond like crazy?

 

[eatshitndie]

what does the red portion of the chart represent?means people selling bond like crazy?

bonds are useless and horrible, especially with interest rates so low. there'll be rude-awakening and reckoning at least next year during the presidential election year. the moment the dems and pubs nominate their respective candidates, the market will tank as taking profits and selling off will be the safest bet, until 2 years later after the new potus has settled into office and no major upheaval is expected in the economy.

 

[Leongsam]

I appeal to our friends here to be more thrifty, going forward.

Why this modern day urge to add "going forward" to just about every sentence.

Unless you're a time traveller, is there any other direction you can possibly go?

 

[frenchbriefs]

bonds are useless and horrible, especially with interest rates so low. there'll be rude-awakening and reckoning at least next year during the presidential election year. the moment the dems and pubs nominate their respective candidates, the market will tank as taking profits and selling off will be the safest bet, until 2 years later after the new potus has settled into office and no major upheaval is expected in the economy.

well u need something to balance out the risk,cant be having 100% in equities in ur portfolio.

 

[eatshitndie]

well u need something to balance out the risk,cant be having 100% in equities in ur portfolio.

after rebalancing my portfolio a couple of years ago, i've nothing in bonds today. bonds are fraud with more risks than ponzi schemes, especially gov bonds issued for pork barrel lofty infrastructure projects (like the bridge to nowhere and airports with no air traffic). as a substitute for bonds, there are dividend-paying stocks from sp500 firms. there's real estate, and there're annuity funds with a lock-in at 7% roi but with cost of about 3%, earning net of 4% which are better than bonds today.