# IS another market crash coming right away?



## LastOutlaw (Jun 1, 2013)

Why the Next Stock Market Crash Will Happen Any Day Now

http://www.newsmax.com/Finance/MKTNews/Market-Collapse-Finance-Stocks/2013/03/01/id/492699/

There is overwhelming evidence that the next stock market crash could strike any day now, and a growing number of investors are turning to a noted economist to prepare for the "unthinkable."

The message is clear: Despite the Dow hitting pre-crash highs, companies reporting positive earnings, and the financial media saying we are looking at the "beginning of a new bull market," the stock market is on the verge of another historic collapse.

The evidence is in a group of charts released by some of the biggest names on Wall Street.
Individually, these charts may not mean much. But taken collectively, they are simply too much for any investor to ignore.

The first chart shows that the annual S&P 500 consensus earnings-per-share is expected to come in much lower than originally thought. Estimates started out near $125 in January 2012, and have now fallen 10% to only $112. Despite the warning sign of falling earnings, the S&P continues to climb.

Chart11.jpg

The second chart shows that stocks are currently very expensive compared to their 10-year average. While stocks typically have a price-to-earnings ratio of 15, they now sit at a ratio closer to 23. That means stocks are priced 53% higher than their 10-year average, which should worry any investor.

Chart22.jpg

The third chart shows that investors are extremely bullish on the market right now. The reading is nearing a 10-year high, and most of us know from experience what happens when market sentiment is too far one way or the other; a snapback occurs. If the "herd" is this bullish, it's generally a good idea to be very cautious.

Chart3.jpg

The fourth chart shows that the VIX, or volatility index, is near a historic low. As the markets have rebounded over the last few years, investors have become complacent. They have priced nearly all risk out of the market, and it will only take one scary event to send volatility higher and investors fleeing the markets.

Chart4.jpg

And finally, the fifth chart shows that the last two times the market climbed this high, a severe correction took place. The first two advances were over 100%, and then followed by a crash of roughly 50%. With the latest rally topping 100%, it is very likely that the market is setting up for another drastic correction.

Chart5.jpg

With the evidence of a market crash growing every day, many investors have turned to a noted economist for a help.

Robert Wiedemer, who along with a team of economists correctly predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States during the "Great Recession," recently recorded a controversial interview in which he predicts that the coming market crash will result in a 90% stock market drop, 50% unemployment, and 100% annual inflation starting this year.

When the host of the interview expressed disbelief in Wiedemer's claims, he calmly displayed his own indisputable charts to back up his predictions, such as the one below. (Click here to see those exact charts.)

Chart6.jpg

The interview has become a wake-up call for those unprepared (or unwilling) to acknowledge an ugly truth: The country's financial "rescue" devised in Washington has failed miserably.

The blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including former Fed Chairmen Ben Bernanke and Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation's economy strong through monetary and credit policies.

At one point, Wiedemer even calls out Bernanke, saying that his "money from heaven will be the path to hell."

But it's not just the grim predictions that are causing the sensation in Wiedemer's video interview. Rather, it's his comprehensive blueprint for economic survival that's really commanding global attention.

The interview offers realistic, step-by-step solutions that the average hard-working American can easily follow.

"[The interview] was originally filmed for a private audience," explained financial publisher Aaron DeHoog, who is unapologetic about the release of controversial footage. "People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it."

Since that day, over 40 million concerned citizens have tuned in to prepare for "the unthinkable."

As for the media giant that wanted to ban the video, DeHoog was able to work out a compromise.

"We agreed to tweak the webpage some, but we didn't change the content of the interview. That had to stay the same. The interview simply states the financial data as is, and then simple, practical advice is given that viewers can take to protect their wealth, and even profit, during the days ahead."

Asked if he is concerned if Wiedemer's predictions don't come true, DeHoog replied, "Absolutely not. The best-case scenario is that Wiedemer is wrong.

"Unfortunately, he has been dead-on thus far. No, our real concern is this, and it's the more likely scenario - what if just half of Wiedemer's predictions come true? Bottom line, it is imperative that Americans be prepared, and that is why we will continue to air this powerful interview."

aftershockVidImg.jpg


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## LastOutlaw (Jun 1, 2013)

*Also this from Gregory Mannarino*

MUST WATCH! Stocks Plunge, Dynamics Changing Rapidly. Meltdown Ahead. By Gregory Mannarino


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## Tweto (Nov 26, 2011)

Several Wall Street insiders have come forward and have expressed concern about the markets. Several of these experts have been on the Maria Bartiromo show on Fox Business. In their investigations they suspect the US government is supporting the stock market and not allowing it to correct normally. Large injections of money into the markets are being traced back to sources close to the treasury, but there appears to be an attempt to hide the original source of the funds.

The purpose for this is difficult to understand, but then the government is doing all kinds of number shuffling to make Omoma look good.

I can positively predict that the markets will dump, but can't say when it will happen. Will it happen the day after Omoma leaves office?


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## hiwall (Jun 15, 2012)

Please remember that for every 'expert' that says the market will crash soon there is another that says it will not. Personally I do believe that a correction will occur but the timing could be anything. I don't really expect it this year. The whole financial health of the world seems very unstable. I do believe a crash will involve way more than the stock markets.
I was never much of a believer in having PMs but have changed my thinking some on them. First thing should be all other prep items and then only if you have cash left over should you consider PMs. It is possible that PMs might be a way to retain some wealth in a major crash but that is only speculation (though it seems reasonable).


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## LastOutlaw (Jun 1, 2013)

hiwall said:


> I was never much of a believer in having PMs but have changed my thinking some on them. First thing should be all other prep items and then only if you have cash left over should you consider PMs. It is possible that PMs might be a way to retain some wealth in a major crash but that is only speculation (though it seems reasonable).


From what I have heard and read the prices of gold and silver are being manipulated and kept low. Silver is especially low. However the prices are still supposed to go down more before they skyrocket (which I believe it will at some point). Silver is especially a good hedge because it is in short supply and is used more heavily in many productions than gold. ( I phones, electronics and other things).

I would not buy gold or silver as an investment but rather a hedge against inflation. In other words buy it to hold in an emergency rather than to make a quick profit on. If you buy it and it's value goes down you may feel like you have lost money if you view it as an investment, however if you buy it as an 'insurance" you won't feel so much like you have lost money but that you have insurance in the event that the dollar crashes or suffers huge losses in value.

Also hiwall is correct... do not buy any silver or gold unless you have all the other preps on hand that are needed to keep yourself and family alive.


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## Marcus (May 13, 2012)

I have read two of Weidemers books. 
According to him, PMs (especially silver) are the way to store wealth. He makes the argument that land will lose value as its economic potential greatly decreases. All other investment choices will do very poorly as world economies collapse.
He does opine that the US will do better than the rest of the world due to the structure of our economy. Resource economies will do worse as will developing countries as their exports collapse.
He foresees oil prices collapsing though he also sees the value of the US dollar collapsing too due to runaway government debt. He predicts high inflation and perhaps hyperinflation.
*After the currency reset,* he believes that only PMs will retain value as whatever new currency is established will be backed by PMs.
The reason for his preference for silver over gold is due to its industrial uses and tight supply and known reserves.


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## musketjim (Dec 7, 2011)

While my preps involve food and liquids first, I also do have IRA's and a 401. My IRA's have been around awhile and I just reinvest the dividends and don't pay in. I do participate in my 401, just in case we're wrong. I try to prepare for as many eventualities as I can and pray I never need to use any of it as intended and go down in history as that goofy old guy.:nuts:


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## hiwall (Jun 15, 2012)

What a strange situation we are in right now. The value of the the US dollar continues to rise at an impressive rate. You would think that is a good thing but like everything it has its good and bad points. For the first half of 2014 the dollar was hoovering around 80 points but is now over 97 points. a twenty percent increase in value. This is a huge amount. Here is a chart........................
http://finviz.com/futures_charts.ashx?t=DX


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## Gians (Nov 8, 2012)

I try not to keep all my eggs in one basket, if the market crashes, roll with it, maybe buy some stock


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## bigg777 (Mar 18, 2013)

Prepare for the worst and hope for the best.

This has always been solid advice. Planning for the "rainy day" that will eventually come is wise, obsessing on the rain is foolish. We each have lives to live that are firmly planted, atleast for now, in a society and economy that is based on fiat currency and may continue to be so for many years.

We've all seen that economic resets happen, the magnitude of the next one is anyone's guess. The old saying about those that don't heed history's lessons is true, including the lessons of over-reaction.

I was just speaking with my cousin from Maine last night, he is a high school history teacher, who focuses on European history, he mentioned part of the curriculum that he teaches is about the Great Depression era. I asked him how today's economic realities stack up against those prior to the GD. He said that he believes that today's financial excesses and shenanigans are far worse than those in the 1930s. He also mentioned that income disparity is 5X worse than it was in pre-revolution France.

There it is, plan accordingly.


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## LastOutlaw (Jun 1, 2013)

bigg777 said:


> Prepare for the worst and hope for the best.
> 
> This has always been solid advice. Planning for the "rainy day" that will eventually come is wise, obsessing on the rain is foolish. We each have lives to live that are firmly planted, atleast for now, in a society and economy that is based on fiat currency and may continue to be so for many years.
> 
> We've all seen that economic resets happen, the magnitude of the next one is anyone's guess. The old saying about those that don't heed history's lessons is true, including the lessons of over-reaction.


So you are saying the writer is over-reacting?



bigg777 said:


> I was just speaking with my cousin from Maine last night, he is a high school history teacher, who focuses on European history, he mentioned part of the curriculum that he teaches is about the Great Depression era. I asked him how today's economic realities stack up against those prior to the GD. He said that he believes that today's financial excesses and shenanigans are far worse than those in the 1930s. He also mentioned that income disparity is 5X worse than it was in pre-revolution France.
> 
> There it is, plan accordingly.


And here you say according to your cousin, it's worse than the worst in our history? And France's history too?

I'm so confused.

:dunno::dunno::dunno::dunno::dunno::dunno::dunno::dunno::dunno::dunno:

In case anyone has been watching the market has been swinging wildly (300 pt swings) down and up and back down in the last 3 days.
Keep your eye on the bouncing ball folks... I actually heard mention of the ECB printing money and it's QE and it's resulting valuation on the US dollar today and mentions of Greece crashing out of the Euro on Mainstream US news today... that has been somewhat unheard of in US news.


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## Marcus (May 13, 2012)

My take on things.

I'll preface this by saying that I retired at the end on January. So I have had time to get a feel for how the stock markets are behaving.

Oil will probably drop some more and maybe even quite a bit more. Some pundits are calling for $20 per barrel oil by April-May. I don't know how low it will go, but it's a good bet that near term prices will fall until the glut abates.

My reasoning: Oil storage facilities are expected to reach capacity by mid-April. This means that temporary storage will likely be used (RR tanker cars, tanker ships, on site storage at wells) until additional storage tanks are completed. As capacity is reached, more and more wells will be taken out of service since there will be no place to put the oil. As these wells are taken offline, more and more workers will be laid off and smaller oil companies will face a financial crunch as their cash flows dry up. The only wells that will be drilled will be exploratory wells which look for new fields. As the crunch really hits some time this summer, I look for all oil companies to greatly curtail their search efforts (this has already begun.)

Why did I start with the oil industry? It has been the driving force behind the 'recovery' from the crisis of 2008. If employment in the oil industry drops precipitously, I foresee oil producing states entering another recession. Whether that recession will become a national recession is a matter of opinion. Personally I think it is likely since growth in other sectors has been relatively timid.

I see the oil service industry being affected even more, and we'll probably see some consolidation within the industry. The ETF for the oil service industry is down ~40% since last July.

I also see certain ports being affected since oil imports will drop. Railroads will be transporting less oil so they too may feel a pinch. Large users of oil such as airlines may benefit depending on how those users have hedged their price risk. Consumers may too see a benefit until the glut is worked off. I don't really see any impact on refineries or pipelines.

The trickle down effect on this slowdown will mostly be local with a few exceptions. The automotive industry will see fewer vehicles sold in those affected areas as will the construction equipment industry. The home building industry will be affected locally, but the building materials industry may see more regional effects. The steel industry will take a hit as will certain types of mining operations who supply the oil industry. The effect on banking will be at the local/state level depending on the area and its reliance on the oil industry.

At a governmental level, those locales and states heavily dependent on taxes from the oil industry will suffer shortfalls. The effect nationally will be more on the revenue side as tax receipts drop. This link shows the effects of falling oil prices on national GDP: http://www.cnbc.com/id/102151869
Note that the US is one of the *least* affected countries. Part of the reason is because the US is now roughly energy independent.

At the international level, we're likely to see another economic slowdown, at least in those countries who export a lot of oil. Note too that if sanctions are lifted against Iran because of a nuclear agreement, it will try to ramp up its oil production which will aggravate the current problem.

As for the recent market swings, it is behavior that is consistent with a market top. One of the reasons some pundits suggest we've seen a top is due to the expected Fed rate increase. That will make borrowing more expensive and thus put a damper on further increases in earnings.

However, the recent announcement of QE in Europe and expected continued QE in Japan suggest those economies are much weaker than here. Thus if the Fed raises rates, we may see an influx of cash searching for a higher return. Such an influx would buoy the market here.

*Hiwall's* USD futures chart shows the value of the USD accelerated from the middle of October on which roughly corresponds to declines in the Euro, Yen, and Pound. So some of that cash may already be here.

Will a strong dollar affect exports? Of course. But other than foodstuffs and cars, what do we export anymore? It is currently against the law to export oil from the US. If that law were changed, it might lessen the current glut.

So what do I suggest you do?

As *bigg777* said, prepare for the worst and hope for the best.

Live below your means and save as much as possible. And invest some of those savings in your preps.

If you have brokerage accounts, sell covered calls against your stock holdings. Choose a strike price below the current price. It's called an In The Money (ITM) call. Thus if we start going down, you will mitigate your losses by at least 50%. If we don't go down, you'll still collect the time premium and can buy back the call right before expiration. Then you can sell the call for next month out.

*If you have any bond holdings or a bond fund, get out now!!!* A rise in interest rates will devastate the value of any recent bonds. The risk is much greater than any possible reward at this point.

Remember the old Chinese curse: May you live in interesting times. I reckon we're there.


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## Mase92 (Feb 4, 2013)

Man kind has been calling for it's demise since the beginning of recorded time. People make millions off of it, telling us "joe's" be ready it's coming to a head any...second...

Nothing new here.

When it happens, not much I can do about it. If it doesn't I live another day where I find a post like this. 

It's why I prep.


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## LastOutlaw (Jun 1, 2013)

Marcus said:


> Thus if the Fed raises rates, we may see an influx of cash searching for a higher return. Such an influx would buoy the market here.


Well.....the FED really can't raise the interest rates. The minute they do, it's all over in the market and they know it. 
Now,
I'm not saying they won't because they HAVE TO at some point but they know the minute they do the game is over in the stock market.

Every time they have signaled an interest rate increase the market plunged and they have had to walk it back to stop the drop.

Now as foreign markets crash you most likely will see an influx of money from investors looking for someplace to put the money they pull from the crashing foreign markets but that will be short lived.


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## Marcus (May 13, 2012)

LastOutlaw said:


> Well.....the FED really can't raise the interest rates. The minute they do, it's all over in the market and they know it.
> Now,
> I'm not saying they won't because they HAVE TO at some point but they know the minute they do the game is over in the stock market.
> 
> Every time they have signaled an interest rate increase the market plunged and they have had to walk it back to stop the drop.


Normally I'd tend to agree with you about this, but the EU going with QE changes things.

The Stoxx 600 is similar to the S&P 500 in the US. YTD returns are real good at over 15%. I attribute most of this to the QE effect. However if you choose to price the index in USD, the YTD return is -5.77%. Similarly, the 3 year return priced in USD is 40% of the return in Euros (20.60% vs. 49.27%.)
http://www.stoxx.com/indices/index_information.html?symbol=SXXP

What this means to me is that large European multinationals (Daimler, Nestle, Fiat, SAP, etc.) _*may*_ choose to keep their US profits in USD until the EUR/USD exchange rate stabilizes. Right now, the Euro is down almost 13% YTD, and the 52 week low was today. If I was running such a company, I know that's what I would do. They would probably park their profits in 1-3 month treasuries and wait. Then they could repatriate their profits with a substantial currency exchange bonus.

I do think we'll see a Fed rate increase in 2015. I do not think it will be a big one, at least at first. I wouldn't be surprised to see a ⅛ point increase instead of a ¼ point increase since I do think the Fed will be cautious. I don't look for it before the summer, and I tend to believe the fall is more likely.

There are three things that I feel will affect the timing of the increase.

The first is the relative strength of the USD against other currencies. A stronger dollar means less exports which will affect employment.

The second is employment and in particular, which employment rate (U3, U5, or U6) the Fed chooses to key on. This is important since the U5 & U6 numbers are well above what has been considered full employment.

Finally, I think the Fed will look at the effects of the oil glut on both the economy and employment. Until production equals demand, we'll continue to see prices fall.

While I would like to think the Fed is smart enough to remember its missteps in the 1930s, I have little faith left in those who reside in DC that it does worry me that they could trigger a global depression by being premature.

BTW, all the chatter about rate increases recently does make me think they're trying to get all of us used to the idea so it won't crater the markets.


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## BillS (May 30, 2011)

Income per share is being manipulated by companies buying back their stock at inflated prices. Those in charge of the companies are cheating the stockholder by doing that. If anything, they should be stockpiling cash to buy back their stock after the coming crash but they're doing what they can to keep their own jobs.

I'm sure that 90% of the companies out there are facing declining revenue and declining income. There's no way that profitability is getting better for companies in America.

As for when the crash will take place, that's anybody's guess. It could be tomorrow, next month, or next year. The fundamentals keep getting worse as the stock market goes higher and higher.


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## BillS (May 30, 2011)

The stock market used to be a nice place to invest your money. Companies paid dividends to their shareholders. Now your only way to make money is to buy low and sell high.


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## HardCider (Dec 13, 2013)

Working stiffs like me don't belong in the stock market. I think I'll keep investing in our little farm and hard assets that I can keep in my possession. I feel way more comfortable investing in food, water, shelter and modes of security. Way healthier and a lot less stressfull


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## hiwall (Jun 15, 2012)

Anyone who thinks the record high stock market is real has only to look at what it did today. We got a very very bad employment report and the market went up over 100 points because it was so bad. It can not get any more backward than that.


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## Marcus (May 13, 2012)

hiwall said:


> Anyone who thinks the record high stock market is real has only to look at what it did today. We got a very very bad employment report and the market went up over 100 points because it was so bad. It can not get any more backward than that.


The *real reason* the market went up is because the bad employment report pretty much guaranteed that the Fed won't raise rates before September which is in line with my expectations. It was down over 100 points before the seers explained their take on it.

FWIW, the summer months are a historically weak time for the markets. The Go Away in May adage doesn't work every year, but overall it is a valid trend. In a strong bull market, the adage doesn't work well, but we're not in a strong bull market anymore.


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