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But Ethan Harris, head of global economics at Bank of America Merrill Lynch, lists a number of global disputes coming to a head this fall, including tariffs on imports from China, the potential for auto tariffs on other countries, Iran oil sanctions kicking in, Congress facing another budget deadline and the election in November. "The risk calendar gets quite big this fall," he said. "September is part of it, but it's really the whole fall period."
So, I should go ahead and take that last $15 I have in the bank out?? (better yet ill use it to fill up a gas can) Looks like this isn’t going to end well. The problem is the talking bimbos on the idiot box keep telling the lotus eaters of this world that everything is fine. (And they believe them!!) Have you tried to wake some of these people up to the fact that this will not end well?? My friends all thought I was crazy when I decided to move to the country to an off grid cabin in the woods two years ago, still not 100% ready but at least I don’t have to walk among them. God bless and prep on!
Terming the crash as a good opportunity to buy these stocks, Madhu Kela of Reliance Capital told ET Now,”Looks like a technical sell-off Their short-term liquidity is very very good; enough liquidity to match liability. Speculative unwinding Long term investor, if you understand the company and faith in management, excellent opportunity to buy these companies; if you think the management is good and will come out stronger, then it’s a good opportunity to buy the shares. Stock markets to worry about the liquidity of companies which have high credit ratings with good liquidity is purely speculative. Even if the interest rates are going up, the lending rates will also go up; to think that either the news is good, or the price is good.”
By September 1983 the Phoenix stated that 2600 cartridges "is no longer a growth industry".[9] Activision, Atari, and Mattel all had experienced programmers, but many of the new companies rushing to join the market did not have the expertise or talent to create quality games. Titles such as Chase the Chuck Wagon (about dogs eating food, funded by the dog food company Purina), Skeet Shoot, and Lost Luggage were examples of games made in the hopes of taking advantage of the video-game boom.
There are other mitigating factors too such as the strengths in the economy, foreign investors buying property, and rising optimism and confidence since Donald Trump won the election.  At this point, we’re wondering if Obama and Clinton are relieved not to have to face the mess they created? Trump seems to be up to the task and yet, he has purportedly said he would enjoy watching the crash, even if it takes down some of his real estate empire. Is this just a comment on high home prices?
"Maybe it's a calculation that raising the temperature and slapping these tariffs on will play better coming into November, but our view is that's one of the potential headwinds facing the market moving into September," Emanuel said. China is not expected to return to negotiations until after the outcome of the election is clear. "China basically realized ... there's a potential for their negotiating position to improve."
Finally, higher rates are especially problematic for so-called growth stocks, which includes tech stocks. "The lure for these stocks is growth in earnings down the road, but when interest rates are higher, the future value of those earnings streams declines," Hickey says. On Wednesday, video streamer Netflix fell 8.4 percent, Facebook tumbled 4.1 percent and Apple fell 4.6 percent.
The mathematical description of stock market movements has been a subject of intense interest. The conventional assumption has been that stock markets behave according to a random log-normal distribution.[9] Among others, mathematician Benoît Mandelbrot suggested as early as 1963 that the statistics prove this assumption incorrect.[10] Mandelbrot observed that large movements in prices (i.e. crashes) are much more common than would be predicted from a log-normal distribution. Mandelbrot and others suggested that the nature of market moves is generally much better explained using non-linear analysis and concepts of chaos theory.[11] This has been expressed in non-mathematical terms by George Soros in his discussions of what he calls reflexivity of markets and their non-linear movement.[12] George Soros said in late October 1987, 'Mr. Robert Prechter's reversal proved to be the crack that started the avalanche'.[13][14]
The 1987 crash was so big that the stock market ended up losing almost $1/2 trillion. Now, what could be the probable reason for such an unnatural crash in the stock market? Market analysts over the years have deduced the reasons which could have resulted in this market crash. The first and foremost reason they found out was that the market lacked liquidity. The market failed to manage the sudden and extremely high volume of sell orders. It seemed that almost all the investors needed to sell their stocks at that particular time. This became difficult for the market to handle and resulted in the crash.

The latest swoon, which knocked the S&P 500 down more than 3 percent Wednesday, signaled to many Wall Street pros that the decline was entering a new, more dangerous phase. There’s growing concern now that this decline is more than a garden variety pullback, or drop of 5 percent to 9.99 percent, and could morph into a drop of 10 percent of more for the broad market.
The Dow opened the year at 12,459.54. It rose despite growing concerns about the subprime mortgage crisis. On November 17, 2006, the Commerce Department warned that October's new home permits were 28 percent lower than the year before. But economists didn't think the housing slowdown would affect the rest of the economy. In fact, they were relieved that the overheated real estate market appeared to be returning to normal.
The Trump tax reform plan might trigger a fall in prices that could lead to a collapse. Congress has suggested removing the deduction for mortgage interest rates. That deduction totals $71 billion. It acts like a federal subsidy to the housing market. The tax break helps homeowners have an average net worth of $195,400. That's much greater than the $5,400 average net worth of renters. Even if the tax plan keeps the deduction, the tax plan takes away much of the incentive. Trump's plan raised the standard deduction.
Some recent peer-reviewed research shows that flash crashes are not isolated occurrences, but have occurred quite often. Gao and Mizrach studied US equities over the period of 1993–2011. They show that breakdowns in market quality (such as flash crashes) have occurred in every year they examined and that, apart from the financial crisis, such problems have declined since the introduction of Reg NMS. They also show that 2010, while infamous for the Flash Crash, was not a year with an inordinate number of breakdowns in market quality.[11]

In a less extreme market—for example, one where the Warren Buffett Indicator is around 100 or less—the risks are easier to identify, count, and classify. But in a situation where this indicator is approaching 140%, it’s clear that we’re long past the realm of logic. The markets are ignoring all risks while the Dow keeps climbing. Yet, there is one major risk at the macro level that could slam open the doors for a crash.

This year’s rate rises however are a bit alarming as this graphic shows — 70% in the last year. When you consider that such rises always accompany recessions, it’s no surprise to see a stock market correction or pullback and even a housing market slide. To investors, this scenario doesn’t look good. It can affect stock prices and discourage investment in new US businesses.
To avoid losing too much in a market crash, investors should lower their stock allocations when prices get insanely high (like they are today!). It’s not a good idea to get out of stocks entirely because it is not possible say precisely when a crash will come. But it makes all the sense in the world to lower one’s stock allocation a bit because all lasting crashes take place starting from high prices.

Tech stocks, this year’s best-performing industry, will be in the spotlight, as executives from Twitter, Facebook and Google’s parent Alphabet begin testimony to Congress on Wednesday while Trump blasts about antitrust. Friday’s monthly payrolls data precedes a policy meeting by Federal Reserve later in the month, when the central bank is expected to raise interest rates for an eighth time since 2015.
The trade-sensitive industrial stocks led the Dow Jones Industrial Average to a record closing high on Thursday, the last of Wall Street's main indexes to fully regain ground since a correction that began in January with all three major US indexes finishing higher as trade worries subsided. Microsoft Corp and Apple Inc rose 1.7% and 0.8%, respectively. The Dow Jones Industrial Average rose 251.22 points, or 0.95% to 26,656.98, the S&P 500 gained 22.8 points, or 0.78% to 2,930.75 and the Nasdaq Composite added 78.19 points, or 0.98% to 8,028.23.
Fourth, other US policies will continue to add stagflationary pressure, prompting the Fed to raise interest rates higher still. The administration is restricting inward/outward investment and technology transfers, which will disrupt supply chains. It is restricting the immigrants who are needed to maintain growth as the US population ages. It is discouraging investments in the green economy. And it has no infrastructure policy to address supply-side bottlenecks.
Sensex and Nifty observed a major crash in the afternoon trade today following a sharp fall in housing finance stocks. However, benchmark indices soon rebounded as Sensex recovered nearly 900 points after falling over 1,100 points and Nifty reclaimed 11,100-level within a matter of minutes in afternoon session. The 30-share index fell 1127.58 points, or 3.03 percent, to hit an intra-day low of 35,993.64. The index was trading 171.39 points, or 0.46 percent, lower at 36,949.83 at the time of reporting.
It’s surprising how unruffled homeowner’s were in the GTA during the trade negotiations, however if you check out the city prices of each city below you can see who was panicking. Aurora, where Magna auto parts is headquartered saw detached home prices plummet $173,000 last month. In one month, in Toronto central where homes are most expensive, we saw an uncharacteristic drop of $111,000. Other districts saw rises so it could be those sellers bought in less expensive areas. See the district stats chart.

Thank you, Gord, for the insightful article. We bought our SoCal (South Bay) home two years ago and our neighborhood’s prices have soared since. We are currently looking at a potential profit of more than $350k given recent comps.. Definitely not a bad thing, but it’s creating a dilemma in our home since my husband is all about cashing out while the market is hot and renting until prices go down again. I on the other hand, am more in favor of doubling down on our home and area by converting our garage to a liveable (and rentable) unit. We really like our area and home, but the potential profit is incredibly enticing. What do you think would be the smartest move in this circumstance?

After Black Monday, regulators overhauled trade-clearing protocols to bring uniformity to all prominent market products. They also developed new rules, known as "trading curbs" or colloquially as circuit breakers, allowing exchanges to temporarily halt trading in instances of exceptionally large price declines in some indexes; for instance, the DJIA.[15]
Will stock investors panic spill over to the housing markets and cause the Fed to pull back on rate increases? Is too much bad news, negative earnings outlook, rising interest rates, global trade friction, supply chain disruptions, or declining stock performance making investors panicky? Something about the market fundamentals is outside investor’s comfort zone. Is this a stock market correction, or a warning that the market could begin to slide?
Thanks for writing the article. It makes some sense. but how about if the amounts are very different? I am currently considering selling my home which will now sell for $1.7 mil. when I purchased 6 years ago it was just under $600k. a 20% drop would be a gain of $340k which would be nice. But the main reason I would consider selling is to re purpose the tax free gains and invest in a range of different investments. I never intended for my house to be an investment tool, but as it has given me such large gains it seems foolish not to take them. In the perhaps 5% to 10% chance the housing market does continue to soar upwards then I guess I’ll never own again! but I will still have considerable assets that will secure me for life.
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The level of panic that we witnessed on Wall Street on Wednesday was breathtaking.  After a promising start to the day, the Dow Jones Industrial Average started plunging, and at the close it was down another 608 points.  Since peaking at 26,951.81 on October 3rd, the Dow has now fallen 2,368 points, and all of the gains for 2018 have been completely wiped out.  But things are even worse when we look at the Nasdaq.  The percentage decline for the Nasdaq almost doubled the Dow’s stunning plunge on Wednesday, and it has now officially entered correction territory.  To say that it was a “bloodbath” for tech stocks on Wednesday would be a major understatement.  Several big name tech stocks were in free fall mode as panic swept through the marketplace like wildfire.  As I noted the other day, October 2018 looks a whole lot like October 2008, and many believe that the worst is yet to come.

The following day, Black Tuesday, was a day of chaos. Forced to liquidate their stocks because of margin calls, overextended investors flooded the exchange with sell orders. The Dow fell 30.57 points to close at 230.07 on that day. The glamour stocks of the age saw their values plummet. Across the two days, the Dow Jones Industrial Average fell 23% – from Wikipedia


But don’t be paranoid either over the inaction. In fact, certain individual stocks are apparently overvalued with unreasonable PE ratios – including Amazon (AMZN) and Netflix (NFLX) – that have the right ingredients to form a bubble. Now don’t get this wrong. We are not saying that Amazon or Netflix is a bubble, but given a potential crash, it would be wise to stay away from overvalued stocks.
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