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Home prices have outpaced income. The average income-to-housing cost ratio is 30 percent. In some metro areas, it's skyrocketed to 40 or 50 percent. Unfortunately, metro areas are also where the jobs are. That forces young people to pay more for rent to be close to a job that doesn't pay enough to buy a house. Thirty-two percent of home sales today are going to first time homebuyers, compared to 40 percent historically, says the National Association of Realtors. Typically, this buyer is 32, earns $72,000, and pays $182,500 for a home. A two-income couple pays $208,500 on average.
Yes, he’s applying national stats only to local markets. It’s difficult to deny the severe housing shortage in most markets inlcuding Los Angeles, New York, San Jose, San Francisco, Dallas, Seattle, detc. He takes aim at Millennials, whose dreams he doesn’t regard as worthy. There are a lot of people who would like to stifle new housing growth as a way to increse the value of their own property investments. As long as they control politics, housing shortages will continue.
Enjoyed reading the article. What do you think about the Atlanta market? Since the last crash, the housing market has skyrocketed with new folks/millennials moving into the area. I can’t imagine how people are able to continue to afford these rising prices. The pay out is not matching this rising cost of living. Any words or advice for the Atlanta market?
It’s hard prepping on limited funds especially with young children, believe me I know. Every two weeks when I get groceries I take an extra $20 and get basic staples to store in my emergency pantry. It doesn’t seem like much but it adds up especially If you use it a Aldis, shop n save, etc. Then when I have extra cash I use it on the other important things besides food. Just keep going your doin a lot better than most. Your kids will thank you for it. 🙂

But what about the risk of a property price crash as suggested by the recent Sixty Minutes report? Several things are worth noting in relation to this: predictions of a 30-50% property price crash have been wheeled out regularly in Australian media over the last decade including on Sixty Minutes; the anecdotes of mortgage stress and defaults don’t line up well with actual data showing low levels of arrears; borrowers have already been moving from interest only to principle and interest loans over the last few years, without a lot of stress; and the 40-45% price fall call on the program was “if everything turns against us”. Our view remains that in the absence of much higher interest rates, much higher unemployment, or a multi-year supply surge (none of which are expected) a property crash is unlikely. But the risks are now greater than when property crash calls started to be made a decade or so ago and so deeper price falls than the 15% top to bottom fall we expect for Sydney and Melbourne are a high risk. This is particularly so given the risk that post the Royal Commission bank lending standards become excessively tight, negative gearing is restricted and the capital gains tax discount is halved after a change in government in Canberra. There is also a big risk that FOMO (fear of missing out) becomes FONGO (fear of not getting out) for some.


Impact of high frequency traders: Regulators found that high frequency traders exacerbated price declines. Regulators determined that high frequency traders sold aggressively to eliminate their positions and withdrew from the markets in the face of uncertainty.[23][24][25][26] A July 2011 report by the International Organization of Securities Commissions (IOSCO), an international body of securities regulators, concluded that while "algorithms and HFT technology have been used by market participants to manage their trading and risk, their usage was also clearly a contributing factor".[27][28] Other theories postulate that the actions of high frequency traders (HFTs) were the underlying cause of the flash crash. One hypothesis, based on the analysis of bid-ask data by Nanex, LLC, is that HFTs send non-executable orders (orders that are outside the bid-ask spread) to exchanges in batches. Though the purpose of these orders is unknown, some experts speculate that their purpose is to increase noise, clog exchanges, and outwit competitors.[29] However, other experts believe that deliberate market manipulation is unlikely because there is no practical way in which the HFTs can profit from these orders, and it is more likely that these orders are designed to test latency times and to detect early price trends.[30] Whatever the reasons behind the possible existence of these orders, this theory postulates that they exacerbated the crash by overloading the exchanges on May 6.[29][30] On September 3, 2010, the regulators probing the crash concluded: "that quote-stuffing—placing and then almost immediately cancelling large numbers of rapid-fire orders to buy or sell stocks—was not a 'major factor' in the turmoil".[31] Some have put forth the theory that high-frequency trading was actually a major factor in minimizing and reversing the flash crash.[32]
When you think of oil production, the Middle East or OPEC is probably what comes to mind. But substantial shale finds in the United States in recent decades have pushed the nation the No. 3 spot in terms of daily production as of 2016, according to data from the U.S. Energy Information Administration. At 8.88 million barrels of oil production per day, the U.S. is responsible for more than 10% of global production. 
Now the stock market needed to be revived. And hence lots of fresh reforms were started to stabilize the market once again. As already mentioned one supposed reason for the stock market crash of 2000 was the advent of the internet and online trading in such a huge number. To see that just about anyone doesn’t jump into stock trading a rule was formed for these Daytraders. Going by these rules, an individual had to have a minimum of $25000 to their name in any bank account. That would ensure that the person is not insolvent. Other than this very basic rule, lots of other rules were laid which could restrict the previous marketing methods which led to losses.
AE good tip, and believe me I do Trek where the the Grizzlies Roam. I always carry a big sidearm and considered myself to be rather macho, but after watching serveral videos on bear attacks, I will still carry my gun but Bear Pepper Spray will be my first defense. Bear Spray may also be the best way to go when facing 4 federal agents at your front door, probably more affective and if and when they get you, there will be no murder charge against you. And BTW I just killed a big black bear with my bow. Trekker Out.
1986 and 1987 were banner years for the stock market. These years were an extension of an extremely powerful bull market that had started in the summer of 1982. This bull market had been fueled by low interest rates, hostile takeovers, leveraged buyouts and merger mania. Many companies were scrambling to raise capital to buy each other out. The business philosophy of the time was that companies could grow exponentially simply by constantly acquiring other companies. In a leveraged buyout, a company would raise a massive amount of capital by selling junk bonds to the public. Junk bonds are bonds that pay high interest rates due to their high risk of default. The capital raised through selling junk bonds would go toward the purchase of the desired company. IPOs were also becoming a commonplace driver of market excitement. An IPO or Initial Public Offering is when a company issues stock to the public for the first time. “Microcomputers” now known as personal computers were become a fast growing industry. People started to view the personal computer as a revolutionary tool that would change our way of life, while creating wonderful business opportunities. The investing public eventually became caught up in a contagious euphoria that was similar to that of any other historic bubble and market crash. This euphoria made investors, as usual, believe that the stock market would “always go up.”
With a Real Wealth Strategist subscription Matt will be your guide to making the kinds of profits many investors only dream about. You’ll get access to his education and experience: Over 20 years in the natural resource industry, expertise in mining, industry and agriculture, and the chance to travel with him as he visits mines, oil projects and company headquarters, in search of the perfect investment idea. Real Wealth Strategist’s portfolio focuses on all natural resources. Essentially, if there’s a way to maximize profits, he’s going to find it and recommend it.

Jump up ^ Lambert, Richard (July 19, 2008). "Crashes, Bangs & Wallops". Financial Times. Retrieved September 30, 2008. At the turn of the 20th century stock market speculation was restricted to professionals, but the 1920s saw millions of 'ordinary Americans' investing in the New York Stock Exchange. By August 1929, brokers had lent small investors more than two-thirds of the face value of the stocks they were buying on margin – more than $8.5bn was out on loan.
Having been suspended for three successive trading days (October 9, 10, and 13), the Icelandic stock market reopened on 14 October, with the main index, the OMX Iceland 15, closing at 678.4, which was about 77% lower than the 3,004.6 at the close on October 8. This reflected that the value of the three big banks, which had formed 73.2% of the value of the OMX Iceland 15, had been set to zero.

However, independent studies published in 2013 strongly disputed the last claim.[52][53][54] In particular, in 2011 Andersen and Bondarenko conducted a comprehensive investigation of the two main versions of VPIN used by its creators, one based on the standard tick-rule (or TR-VPIN)[50][55][56] and the other based on Bulk Volume Classification (or BVC-VPIN).[57] They find that the value of TR-VPIN (BVC-VPIN) one hour before the crash "was surpassed on 71 (189) preceding days, constituting 11.7% (31.2%) of the pre-crash sample". Similarly, the value of TR-VPIN (BVC-VPIN) at the start of the crash was "topped on 26 (49) preceding days, or 4.3% (8.1%) of the pre-crash sample."[53]
At the time of the Flash Crash, in May 2010, high-frequency traders were taking advantage of unintended consequences of the consolidation of the U.S. financial regulations into Regulation NMS,[3][13] designed to modernize and strengthen the United States National Market System for equity securities.[14]:641 The Reg NMS, promulgated and described by the United States Securities and Exchange Commission, was intended to assure that investors received the best price executions for their orders by encouraging competition in the marketplace, created attractive new opportunities for high-frequency-traders. Activities such as spoofing, layering and front-running were banned by 2015.[citation needed] This rule was designed to give investors the best possible price when dealing in stocks, even if that price was not on the exchange that received the order.[15]:171
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."

However, independent studies published in 2013 strongly disputed the last claim.[52][53][54] In particular, in 2011 Andersen and Bondarenko conducted a comprehensive investigation of the two main versions of VPIN used by its creators, one based on the standard tick-rule (or TR-VPIN)[50][55][56] and the other based on Bulk Volume Classification (or BVC-VPIN).[57] They find that the value of TR-VPIN (BVC-VPIN) one hour before the crash "was surpassed on 71 (189) preceding days, constituting 11.7% (31.2%) of the pre-crash sample". Similarly, the value of TR-VPIN (BVC-VPIN) at the start of the crash was "topped on 26 (49) preceding days, or 4.3% (8.1%) of the pre-crash sample."[53]
Stock valuations aren’t extended and can support higher bond yields (the spread between the forward earnings yields and 10-Year Treasury yield is roughly 300 basis points, far above its long-term average). GDP growth is below trend, and every recession since 1970 has been preceded by above-trend GDP growth (GDP has followed a nice trend since World War II, and we are well below that trend currently due to a slow recovery from a big 2008 wipe-out). Debt levels remain reasonable and in line with long-term averages (net corporate debt to GDP is well off record highs, and simply in line with its long-term average).
Prices began to decline in September and early October, but speculation continued, fueled in many cases by individuals who had borrowed money to buy shares—a practice that could be sustained only as long as stock prices continued rising. On October 18 the market went into a free fall, and the wild rush to buy stocks gave way to an equally wild rush to sell. The first day of real panic, October 24, is known as Black Thursday; on that day a record 12.9 million shares were traded as investors rushed to salvage their losses. Still, the Dow average closed down only six points after a number of major banks and investment companies bought up great blocks of stock in a successful effort to stem the panic that day. Their attempts, however, ultimately failed to shore up the market.
Paying attention to economic changes and other signals could give you forewarning of what could happen from 2018 to 2020. If relying solely on professional stock market experts and news stories would not be wise. As the overall indicators move relentlessly high, it might provide a clear signal that market is cresting, and will head back down to equilibrium.
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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.
After a one-day recovery on October 30, where the Dow regained an additional 28.40 points, or 12 percent, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60. The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28, and reaching a secondary closing peak (i.e., bear market rally) of 294.07 on April 17, 1930. The following year, the Dow embarked on another, much longer, steady slide from April 1931 to July 8, 1932, when it closed at 41.22—its lowest level of the 20th century, concluding an 89 percent loss rate for all of the market's stocks.
Also, be sure you're focused on percentages, not points, when thinking about stock market movements. This is something the media doesn't sufficiently understand, often reporting market drops in points instead of percentages. As an example, the Dow Jones Industrial Average dropped by a whopping 1,175 points in a single day in February 2018, which sure sounds like a lot -- especially compared with 1987's "Black Monday," when the Dow fell 508 points. But in percentage points, it was a meaningful yet not catastrophic 4.6% decline -- while 1987's drop wiped out 22.6% of the market's value at the time. The Dow was near 26,000 at the time of this writing, and the S&P 500 was around 2,800. At those levels, if the Dow "plunges" by 260 points, remember that it would be just a 1% move. Even a 1,000-point drop would be just a 3.85% decline.

A second, highly visible result of the crash was the advancement of measures to control third-party development of software. Using secrecy to combat industrial espionage had failed to stop rival companies from reverse engineering the Mattel and Atari systems and hiring away their trained game programmers. While Mattel and Coleco implemented lockout measures to control third-party development (the ColecoVision BIOS checked for a copyright string on power-up), the Atari 2600 was completely unprotected and once information on its hardware became available, little prevented anyone from making games for the system. Nintendo thus instituted a strict licensing policy for the NES that included equipping the cartridge and console with lockout chips, which were region-specific, and had to match in order for a game to work. In addition to preventing the use of unlicensed games, it also was designed to combat software piracy, rarely a problem in the United States or Western Europe, but rampant in East Asia.[citation needed]
You might be wondering if we’ve endured one too many ghost apparitions. To suggest that no less than Warren Buffett, whose net worth is north of $80.0 billion, expects the market to reverse its bullish course seems not just scary, it seems silly. But Warren Buffett’s predictions for 2018 call for at least a market correction—if not an outright crash.

Accolade achieved a technical victory in one court case against Sega, challenging this control, even though it ultimately yielded and signed the Sega licensing agreement. Several publishers, notably Tengen (Atari), Color Dreams, and Camerica, challenged Nintendo's control system during the 8-bit era by producing unlicensed NES games. The concepts of such a control system remain in use on every major video game console produced today, even with fewer "cartridge-based" consoles on the market than in the 8/16-bit era. Replacing the security chips in most modern consoles are specially encoded optical discs that cannot be copied by most users and can only be read by a particular console under normal circumstances.


I’m less concerned than our friends at the Fed. Businesses are rebelling in mass against Trump’s punitive tariffs on steel, aluminum, and lumber. Trump is still blind to his own economic idiocy as I write. Given the torrent of negative press on tariffs in recent weeks, I suspect that a member or two of his retinue will force him to see the light. They’ll force him sooner than later.
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