Fifth, growth in the rest of the world will likely slow down – more so as other countries will see fit to retaliate against US protectionism. China must slow its growth to deal with overcapacity and excessive leverage; otherwise a hard landing will be triggered. And already-fragile emerging markets will continue to feel the pinch from protectionism and tightening monetary conditions in the US.
As a result, while some stores sold new games and machines, most retailers stopped selling video game consoles or reduced their stock significantly, reserving floor or shelf space for other products. This was the most formidable barrier that confronted Nintendo, as it tried to market its Famicom system in the United States. Retailer opposition to video games was directly responsible for causing Nintendo to brand its product an "Entertainment System" rather than a "console", using terms such as "control deck" and "Game Pak", as well as producing a toy robot called R.O.B. to convince toy retailers to allow it in their stores. Furthermore, the design for the Nintendo Entertainment System (NES) used a front-loading cartridge slot to mimic how video cassette recorders, popular at that time, were loaded, further pulling the NES away from previous console designs.[35][36][37]
There was a chart floating around in early 2014 that had a 97.5% correlation between the stock market of 1928-29 and the stock market of 2013-14. That chart boldly predicted a massive stock market crash in 2014. Instead, from when the market was supposed to crash into the end of the year, stocks rose nearly 10%, and were in the middle of the longest bull market in history.
The Fed underestimated the size and impact of the mortgage-backed securities market. Banks had hired "quant jocks" to create these new securities. They wrote computer programs that sorted packages of mortgages into high-risk and low-risk bundles. The high-risk bundles paid more but were more likely to default. The low-risk bundles were safer, but paid less.
Prolonging the good times into September will require navigating a calendar full of pitfalls. Of primary concern are emerging markets, where currency and other assets are weakening and some say contagion will worsen. The big risk is on the trade front with President Donald Trump said to want to move ahead with a plan to impose tariffs on $200 billion of Chinese imports as soon as next week.

The 1987 Stock Market Crash was really huge and resulted in millions of people to lose wealth. The reforms that were introduced needed to be strictly followed so that the market could get over the losses soon. To date, the 1987 stock market crash is mentioned to be one of worst crashes in the history of stock trading. After the 1929 stock market crash this was the biggest crash to occur resulting in a huge loss.
Having said that, it does seem like Buffett himself is paying attention and agrees that the market is generally expensive. After all, the lack of attractive investment opportunities has resulted in Berkshire Hathaway accumulating nearly $110 billion of cash and equivalents on its balance sheet. Plus, Buffett has specifically cited valuation when discussing the absence of major acquisitions lately.
This guideline has one exception: a stock market crash. If the market as a whole, measured by all three major indexes, loses hundreds of points (multiple percentage points), there's generally been a shock to the system, such as 9/11 or an unexpected political development or absolutely terrible economic news, such as the collapse of a major currency. In recent memory, bugs in automated, algorithmic trading have caused smaller crashes.
Based on our analysis, we believe that High Frequency Traders exhibit trading patterns inconsistent with the traditional definition of market making. Specifically, High Frequency Traders aggressively trade in the direction of price changes. This activity comprises a large percentage of total trading volume, but does not result in a significant accumulation of inventory. As a result, whether under normal market conditions or during periods of high volatility, High Frequency Traders are not willing to accumulate large positions or absorb large losses. Moreover, their contribution to higher trading volumes may be mistaken for liquidity by Fundamental Traders. Finally, when rebalancing their positions, High Frequency Traders may compete for liquidity and amplify price volatility.
Based on interviews and our own independent matching of the 6,438 W&R executions to the 147,577 CME executions during that time, we know for certain that the algorithm used by W&R never took nor required liquidity. It always posted sell orders above the market and waited for a buyer; it never crossed the bid/ask spread. That means that none of the 6,438 trades were executed by hitting a bid. [...] [S]tatements from page 36 of Kirilenko's paper[4] cast serious doubt on the credibility of their analysis. [...] It is widely believed that the "sell program" refers to the algo selling the W&R contracts. However, based on the statements above, this cannot be true. The sell program must be referring to a different algo, or Kirilenko's analysis is fundamentally flawed, because the paper incorrectly identifies trades that hit the bid as executions by the W&R algo.
If we, in short order, enter into a recession it will be directly related to the bail outs and QE put in place under Obama’s watch. They did what they thought was best, but much of the benefit of all this asset inflation has not gone to the average person and it has put us in uncharted territory as we begin to embark on an unwinding journey in the Fall.
Consequently, we believe, that irrespective of technology, markets can become fragile when imbalances arise as a result of large traders seeking to buy or sell quantities larger than intermediaries are willing to temporarily hold, and simultaneously long-term suppliers of liquidity are not forthcoming even if significant price concessions are offered.
The heads of the SEC and CFTC often point out that they are running an IT museum. They have photographic evidence to prove it—the highest-tech background that The New York Times (on September 21, 2010) could find for a photo of Gregg Berman, the SEC’s point man on the Flash, was a corner with five PCs, a Bloomberg, a printer, a fax, and three TVs on the wall with several large clocks.
The portfolio I am testing in this study purchases 2-month 0.5 delta puts on the S&P 500 Composite Index (approximately 30 percent out of the money, in the case of a 40 percent implied volatility) at the start of each strategy period at an assumed 40 percent volatility level…. After every month, the 2-month put options position is rolled (the existing options are sold and new 2-month puts are purchased, which resets the position every month)… Each month the portfolio spends one half of one percent on puts, and the remaining 99.5 percent stays invested in the S&P index.
3. They also found, to the surprise of some readers I’m sure, “that some widely cited economic variables displayed an unexpected, counterintuitive correlation with future returns. The ratio of govern- ment debt to GDP is an example: Although its R2makes it seem a better performer than others, the reason is actually opposite to what one would expect—the government debt/GDP ratio has had a positive relationship with the long-term realized return. In other words, higher government debt levels have been associated with higher future stock returns, at least in the United States since 1926″.
The combined selling pressure from the sell algorithm, HFTs, and other traders drove the price of the E-Mini S&P 500 down approximately 3% in just four minutes from the beginning of 2:41 p.m. through the end of 2:44 p.m. During this same time cross-market arbitrageurs who did buy the E-Mini S&P 500, simultaneously sold equivalent amounts in the equities markets, driving the price of SPY (an exchange-traded fund which represents the S&P 500 index) also down approximately 3%.
In late 1985 and early 1986, the United States economy shifted from a rapid recovery from the early 1980s recession to a slower expansion, resulting in a brief "soft landing" period as the economy slowed and inflation dropped. The stock market advanced significantly, with the Dow peaking in August 1987 at 2,722 points, or 44% over the previous year's closing of 1,895 points. Further financial uncertainty may have resulted from the collapse of OPEC in early 1986, which led to a crude oil price decrease of more than 50% by mid-1986.[2]
Our deficit and debt as numbers alone are kind of meaningless.. It only matters relative to other countries and relative to our GDP. For better or worse current economic theory under globalization seems to expect every country to grow and amass more debt while keeping those two values in some kind of balance. So it is hard even for an economist to say how relevant the size of the number is. And a lot of that theory is working out rather poorly for many Euro countries right now.
It is not a big surprise, however, that many investors today remain interested in the forecasts of financial analysts regardless of their success. Humans in the past consulted oracles, crystal balls and tea leaves. It’s in our nature: As the proverb goes, “tell me a fact, and I'll learn; tell me a truth, and I’ll believe; but tell me a story and it will live in my heart forever.” We are attracted to story-telling, and when it comes to investing we seem to be searching for the most compelling narratives about the unknowable future, regardless of how accurate they turn out to be.
When markets are very volatile, the overall trend tends to be down.  So what investors should be hoping for are extremely boring days on Wall Street when not much happens.  That has been the usual state of affairs for much of the past decade, but now volatility has returned with a vengeance.  The following is how CNBC summarized the carnage that we witnessed on Friday…
Stock prices began to decline in September and early October 1929, and on October 18 the fall began. Panic set in, and on October 24, Black Thursday, a record 12,894,650 shares were traded. Investment companies and leading bankers attempted to stabilize the market by buying up great blocks of stock, producing a moderate rally on Friday. On Monday, however, the storm broke anew, and the market went into free fall. Black Monday was followed by Black Tuesday (October 29), in which stock prices collapsed completely and 16,410,030 shares were traded on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading.
To help maintain a clear head during stock market crashes, investors should remember that they are business owners -- not ticker symbol owners. While stock prices may plummet, the majority of companies with good business models and strong competitive advantages will likely see a far smaller negative impact to their underlying businesses during these periods. So, be sure to detach stock price performance from business performance.

Evan of My Journey to Millions took the conversation back to the bigger picture with your investing goals and, “I honestly do not think you can protect against a stock market crash, and that’s okay! Make sure your risk tolerance matches your asset allocation and ride it out knowing that you should have time to let it all work itself out.  It is unlikely that the next crash is going to be the one that destroys our market system.”
I’m in the market to buy a house in San Diego County and turn it into a vacation rental. I own one and it is very successful. I’m wondering if I should wait to buy, and if a recession would lead to a decrease in vacation rental bookings? I’m concerned and do not want to find myself under water. Any updates on this fascinating chain of discussion as of April, 2018?
If you are concerned about how much you could lose on some of your largest positions, you can also think about using stop loss orders to mitigate potential losses. For each stock, you can set a few price levels below technical support where you will begin to reduce the size of the position. It’s best to do this long before stock prices begin to fall so that your decisions are rational and not driven by emotions. Stop losses are not generally a strategy used by long term investors. However, they can help you manage the emotional pain of a bear market.
This guideline has one exception: a stock market crash. If the market as a whole, measured by all three major indexes, loses hundreds of points (multiple percentage points), there's generally been a shock to the system, such as 9/11 or an unexpected political development or absolutely terrible economic news, such as the collapse of a major currency. In recent memory, bugs in automated, algorithmic trading have caused smaller crashes.
Its pretty obvious she's completely failed. She may as well have said she never wrote the current Brexit deal, Barnier did or Merkel did. In more enlightened times her head would be on a spike by now, down by the Thames. But what do we expect from just the latest traitor to Sovereignty on the list, that includes: Heath, Major, Brown and the rest . . We need a new broom to sweep all this rubbish away, once and for all . .
Slingshot, you have me laughing, thats a good one. Hopefully i am not responsible for run on the ammo. Me like everyone else, has heard it from the horses mouth. No one knows the exact date when it will hit in September. I was told by my scientist that by Novermber, people will literally be on the streets in mass, raising hell on earth, and he is not sure why, its just what he was told. Food and water shortage, civil war, revolution, uprising? etc. Who knows. All that crap i am tryping up, its what i am being told is likely to commense.
In August, the wheat price fell when France and Italy were bragging of a magnificent harvest, and the situation in Australia improved. This sent a shiver through Wall Street and stock prices quickly dropped, but word of cheap stocks brought a fresh rush of "stags", amateur speculators and investors. Congress voted for a 100 million dollar relief package for the farmers, hoping to stabilize wheat prices. By October though, the price had fallen to $1.31 per bushel.[25]
The New York Times then noted, "Automatic computerized traders on the stock market shut down as they detected the sharp rise in buying and selling".[25] As computerized high-frequency traders exited the stock market, the resulting lack of liquidity "caused shares of some prominent companies like Procter & Gamble and Accenture to trade down as low as a penny or as high as $100,000".[25] These extreme prices also resulted from "market internalizers",[44][45][46] firms that usually trade with customer orders from their own inventory instead of sending those orders to exchanges, "routing 'most, if not all,' retail orders to the public markets—a flood of unusual selling pressure that sucked up more dwindling liquidity".[26]
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.”
People who were caught in the 2008 crash are spooked that a 2018 bubble will lead to another crash. But that crash was caused by forces that are no longer present. Credit default swaps insured derivatives such as mortgage-backed securities. Hedge fund managers created a huge demand for these supposedly risk-free securities. That created demand for the mortgages that backed them.

As the year drew to a close, the Bureau of Economic Analysis revised its growth estimate higher. It said that the nation’s gross domestic product had increased 0.5 percent in the third quarter. Its prior estimate said it had shrunk 0.5 percent. It seemed the U.S. economy could shrug off a housing downturn and banks’ liquidity constraints. The Dow ended the year just slightly off its October high, at 13,264.82.
There’s two camps on the 2019 crash issue. First those who see the unbelievable period of economic growth in the US and believe it has to end and who see the end of Free Trade as a forboding sign; and secondly, those who see only positive signals and the solid political footing of the Trump administration in its resolution to bring good paying jobs and industry back to the US.
If you haven't been periodically rebalancing your portfolio, you may be invested more aggressively than you think. Someone who started out with a mix of 70% stocks and 30% bonds when this bull market began back in 2009 and simply re-invested all gains in whatever investment generated them, would have something close to a portfolio 90% stocks and 10% bonds today.
Perhaps the likeliest reason for the next stock market crash could be an escalating trade spat between the United States and China. After the U.S. initially placed tariffs on $34 billion worth of Chinese goods, China retaliated with tariffs of its own on an equal value of imported U.S. goods. Now the two sides are threatening to one-up the other with tariffs.
Likewise, stock prices have defeated all forecasting efforts, and may well belong to the same set of basic unpredictability. While occasionally somebody may seem to be on the right side of an investment ahead of a big move, this is a far cry from actually forecasting such move with any kind of precision in terms of timing and size. For each “hunch” that is successful, a myriad others fail. Despite anecdotes, there seems to be no clear evidence that investors who get a big move “right” are anything but lucky.
Benjamin Graham once observed that in the short term, the stock market is a voting machine. That's what it did today. It went up or went down based mostly on popular opinion, blown by the wind. In the long term, it's a weighing machine, which reflects the true value of businesses in their stock prices. That's why it's so important to think like an owner, and not just a trader.
Plummeting rupee: The domestic currency has set a fresh record this morning at 73.77 against the US dollar, after breaching the 73 mark yesterday. This weighed heavily on investor sentiment. It has depreciated nearly 14 per cent in the year so far. Meanwhile, the dollar has strengthened, boosted by a spike in Treasury yields following upbeat US data and the hawkish stance of the US Federal Reserve.
The affordability index continues to be stacked against potential home buyers. As housing and rental prices steadily increase, wages continue to stay relatively stagnant. Historically, the average income-to-housing cost ratio in the U.S. has hovered near 30 percent, but in some metro areas, that number is currently closer to 40 and even 50 percent! This strips away the opportunity to save money as a significant portion of a person’s monthly income is going to keeping a roof over their head.

Whether Professor Sornette is right or not that a critical point can be anticipated, the entire concept of market self-organization deals a blow to the “fundamental” approach to investing in equity markets – the idea that opinion-based research can lead to investment success when it seems quite apparent that outcomes cannot be predicted even when initial conditions are known.


The NASDAQ released their timeline of the anomalies during U.S. Congressional House Subcommittee on Capital Markets and Government-Sponsored Enterprises[73] hearings on the flash crash.[2] NASDAQ's timeline indicates that NYSE Arca may have played an early role and that the Chicago Board Options Exchange sent a message saying that NYSE Arca was "out of NBBO" (National best bid and offer). The Chicago Board Options Exchange, NASDAQ, NASDAQ OMX BX and BATS Exchange all declared self-help against NYSE Arca.[2]
Good harvests had built up a mass of 250 million bushels of wheat to be "carried over" when 1929 opened. By May there was also a winter-wheat crop of 560 million bushels ready for harvest in the Mississippi Valley. This oversupply caused a drop in wheat prices so heavy that the net incomes of the farming population from wheat were threatened with extinction. Stock markets are always sensitive to the future state of commodity markets, and the slump in Wall Street predicted for May by Sir George Paish arrived on time. In June 1929, the position was saved by a severe drought in the Dakotas and the Canadian West, plus unfavorable seed times in Argentina and eastern Australia. The oversupply would now be wanted to fill the big gaps in the 1929 world wheat production. From 97¢ per bushel in May, the price of wheat rose to $1.49 in July. When it was seen that at this figure American farmers would get rather more for their smaller crop than for that of 1928, stocks went up again.
Milton Friedman's A Monetary History of the United States, co-written with Anna Schwartz, advances the argument that what made the "great contraction" so severe was not the downturn in the business cycle, protectionism, or the 1929 stock market crash in themselves, but the collapse of the banking system during three waves of panics over the 1930–33 period.[42]

Following the 55%-plunge in DHFL share price, biggest since listing, Kapil Wadhawan, CMD, DHFL said to CNBC TV18 that it is a big surprise and shock to him. We are sitting in a strong liquidity position and there is not default whatsoever, Wadhawan said. All this what we are seeing is a "panic-stricken market reaction" and the total liability position till 31 March 2018 was just Rs 4,800 crore, Wadhawan said further to CNBC TV18. At the same time, there is close to Rs 10,000 crore of liquidity available with us in the system other than collections that we accrue on a monthly basis, Wadhawan said. NPA position is strong and the asset quality is top notch, Wadhawan added. 
One of the big drivers of the stock market since 2008 has been monetary policy: in specific, the Quantitative Easing program of the Federal Reserve and the low interest rates. While the former put a lot of new money into bonds (keeping those interest rates low), the latter kept the world's least risky investment paying out very little. As a result, a lot of money chased better returns in the stock market.

Despite the UK's one-toe-in-the-water approach to the European Union, as evidenced by keeping the British Pound instead of the Euro as prime currency, the current state of the country is still tied to its membership. Trade deals will have to be renegotiated. Tarrifs may be in play. The two year process of political and economic disentangling is unprecedented, and that creates uncertainty.

Other scientists disagree with this notion, and note that market crashes are indeed “special.” Professor Didier Sornette, for example, a physicist at the Swiss Federal Institute of Technology, argued that a market crash is not simply a scaled-up version of a normal down day but a true outlier to market behavior. In fact, he claims that ahead of critical points the market starts giving off some clues. His work focuses on interpreting these clues and identify when a bubble may be forming and, crucially, when it ends.
Many approaches to stock market analysis are statistical. This makes sense. Investing is rife with numbers and data and lots of time periods to slice and dice. In fact, most of the time, the markets appear to helpfully follow basic statistical models. However, it’s not that easy with market crashes. Here, there is surprisingly little data to go on, and many things that we might believe to be true simply aren't.
Ok but i understand this, banks were selling Mortages for up to 100 times what they were worth even to foreign investors, right/! Ok then they were loaning the money to sell these mortages right with an interest, whereas, the loanee was paying alot of money to buy a house. right and investors were not investing in the stock market they were investing in the housing market. so then where does unemployment really take off here? why did investors suddenly pull there monies out of jobs? and when did the wealthy decide we all needed an overhaul and that disabled americans needed to go without teeth and glasses for 4 years so that the newly displaced homeowners and unemployed americans could jump on the poverty bandwagon. really!
The U.S. game industry lobbied in Washington, D.C. for a smaller $1 coin, closer to the size of a quarter, arguing that inflation (which had reduced the quarter's spending power by a third in the early 1980s) was making it difficult to prosper.[21] During the 1970s, the dollar coin in use was the Eisenhower dollar, a large coin impractical for vending machines. The Susan B. Anthony dollar was introduced in 1979, and its size fit the video game manufacturers' demands, but it was a failure with the general public. Ironically, the new coin's similarity to the quarter was one of the most common complaints. In Canada, existing dollar bills were removed from circulation and replaced with coins in 1987.
Plummeting rupee: The domestic currency has set a fresh record this morning at 73.77 against the US dollar, after breaching the 73 mark yesterday. This weighed heavily on investor sentiment. It has depreciated nearly 14 per cent in the year so far. Meanwhile, the dollar has strengthened, boosted by a spike in Treasury yields following upbeat US data and the hawkish stance of the US Federal Reserve.
Umm sorry, but you know nothing relevant about the 2007-08 financial collapse and should do some research before claiming you know anything about financial theory. I agree with you that some interest is fine and fair, but Calvin is quite correct that in this case is was simple greed, gambling and dishonest on the part of your “bankers” that’s to blame. The subprime mortgage risk is not what caused the collapse in 2007-2008. What happened here is that you “bankers” even though they knew that interest rates were only in the 6% percent range, and thus grouping the mortgages together and selling them as investment could only net a profit in that same range (6%) instead claimed that they were worth 10-100 times what they were and sold them as such. Normal (not subprime mortgages) were regulated by law so that your cheating bankers(to be fair this was not all bankers, only dishonest ones) were not allowed to claim that they are worth anything more than the rate of return which is obviously the truthful and correct rate maximum that an investor would see. Sub-prime mortgages the other hand, were not regulated by law and nothing prevented your “bankers” falsely claiming and selling the mortgates as an investement with an expected derivative return many times higher than could ever be possible with the real interest rates.
"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."
Consequently, we believe, that irrespective of technology, markets can become fragile when imbalances arise as a result of large traders seeking to buy or sell quantities larger than intermediaries are willing to temporarily hold, and simultaneously long-term suppliers of liquidity are not forthcoming even if significant price concessions are offered.
I think the US has a super position if Trump can get past all his enemies and stimulate the GDP and domestic productivity. It’s not easy to bring good jobs back. He’s really bit off more than he can chew. If he can cut small business taxes, that would launch the country into boom times. If he doesn’t do something soon, because things are quiet right now, even his biggest supporters could possibly turn on him.
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