Markets can also be stabilized by large entities purchasing massive quantities of stocks, essentially setting an example for individual traders and curbing panic selling. However, these methods are not only unproven, they may not be effective. In one famous example, the Panic of 1907, a 50 percent drop in stocks in New York set off a financial panic that threatened to bring down the financial system. J. P. Morgan, the famous financier and investor, convinced New York bankers to step in and use their personal and institutional capital to shore up markets.

Hi Jack, I can’t offer advice and I can’t imagine a first time buyer buying in North County. Oceanside home prices are up 11% in the last year, so a lot of buyers/investors are optimistic. I don’t see availability improving much in San Diego County and with the economy so strong, things look good. However, with geo political uncertainty, you need to be able survive a crash anytime in the next 5 years!

The sandpile study was introduced in a 1987 paper by Per Bak, Chao Tang and Kurt Wiesenfeld, three scientists working at the Physics Department at the Brookhaven National Laboratory. Ironically, the paper was presented to Physical Review Letters a few months before the stock market crash of October 1987, still today the largest ever one-day drop. The title was "Self-Organized Criticality" and falls within a branch of mathematics known as Complexity Theory, which studies how systems can organize themselves into unexpected behaviors arising from the interaction of its smallest and seemingly independent components.


Thank you Dan. Congrats on the new member of the family. Yes, so many people are facing the decision to leave the GTA entirely. Might be agonizing at first, but it might be better for your kids. With the Internet, they won’t miss much. What do you think of Calgary? Buy low and and wait for oil to come back? Isn’t that how big fortunes are made? I don’t know of any such lists but perhaps I should make one:). What’s the first place that comes to mind when you think about moving?
The CAPE ratio (also known as Shiller P/E ratio) is a long term cyclically adjusted measure of equity valuations devised by the respected economist Robert Shiller. The CAPE ratio has been at historically high level for several years, although high valuations alone do not mean a crash is imminent. Whether US stock prices today are in a stock bubble or not is debatable. In general, bubbles do not necessarily imply a crash, unless there is a catalyst.
Analysts say it's possible about 1 million barrels could be off the market by year-end. A much larger amount would squeeze supply and affect prices, Harris said. Already, companies have announced that they will step back from dealing with Iran, and Harris said the sanctions could create tensions between the U.S. and five countries that remain in the Iran nuclear deal. The U.S. broke from that group and decided on its own to reapply sanctions.
While the note's warnings are ominous and contradict many other more rosy outlooks for the current bull market, the London-based fund was on point in calling February's market correction weeks before it happened. Filia told CNBC in late January that stock valuations were in "bitcoin territory," "totally disconnected from fundamentals," and that markets were on the "edge of chaos."

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The turbulence in India follows bursts of market volatility across Asian and developing countries this year. While a record-breaking surge in U.S. stocks has kept equity markets largely buoyant, some investors are growing skittish as global interest rates rise. The Hong Kong dollar posted its biggest swing since 2003 on Friday, while markets from Turkey to Argentina have endured big spikes in volatility in recent months.

So many people blindly put money into their 401k and assume it will grow into something they can retire on. This is an extremely bad plan for one main reason, lack of diversification. Sure, they might have money in three or four different funds, but it’s still fully invested in stocks and is entirely dependent on market growth. In the event of a crash, they’re absolutely screwed.
Toronto is a high value housing market similar to New York City or the Bay Area of California, and TO is a city destined to be a super city.  It’s unlikely that a property purchase in Toronto will be a disappointment over the long run. If you see the Toronto home price charts, you’ll notice that prices have climbed in the last 18 months. So buyers have not lost their equity.
Nintendo reserved a large part of NES game revenue for itself by limiting most third-party publishers to only five games per year on its systems (some companies tried to get around this by creating additional company labels like Konami's Ultra Games label); Nintendo would ultimately drop this rule by 1993 with the release of the Super Nintendo Entertainment System.[50] It also required all cartridges to be manufactured by Nintendo, and to be paid for in full before they were manufactured. Cartridges could not be returned to Nintendo, so publishers assumed all the financial risk of selling all units ordered. As a result, some publishers lost more money due to distress sales of remaining inventory at the end of the NES era than they ever earned in profits from sales of the games.
While the note's warnings are ominous and contradict many other more rosy outlooks for the current bull market, the London-based fund was on point in calling February's market correction weeks before it happened. Filia told CNBC in late January that stock valuations were in "bitcoin territory," "totally disconnected from fundamentals," and that markets were on the "edge of chaos."

For example, really big daily price moves should be fairly uncommon, and during normal market periods they are. However, at a period of a crash, a lot of big moves can often be strung over just a few weeks, something called volatility clustering. This means that the models that hold up fairly well in normal markets, just aren’t relevant to a crash. Crashes are something like when a man changes into a werewolf, the normal rules for a human don’t apply. During a crash the stock market becomes a different beast.
Despite fears of a repeat of the 1930s Depression, the market rallied immediately after the crash, posting a record one-day gain of 102.27 the very next day and 186.64 points on Thursday October 22. It took only two years for the Dow to recover completely; by September 1989, the market had regained all of the value it had lost in the 1987 crash. The Dow Jones Industrial Average gained six-tenths of a percent during the calendar year 1987.
TREB’s own survey found that foreign buyers actually had little effect on the market, and it was the chilling effect of the fair housing act that destroyed what was a healthy Toronto real estate market. Although Doug Ford originally promised to free up land, lower prices, and cut red tape, he quickly recanted. He has announced a new buck a beer program.
Consider hiring a fee-only financial advisor to kick the tires on your portfolio and provide an independent perspective on your financial plan. In fact, it’s not uncommon for financial planners to have their own financial planner on their personal payroll for the same reason. An added bonus is knowing there’s someone to call to talk you through the tough times.
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Still lacking sufficient demand from fundamental buyers or cross-market arbitrageurs, HFTs began to quickly buy and then resell contracts to each other—generating a “hot-potato” volume effect as the same positions were rapidly passed back and forth. Between 2:45:13 and 2:45:27, HFTs traded over 27,000 contracts, which accounted for about 49 percent of the total trading volume, while buying only about 200 additional contracts net.
August has been a study in contrasts, another month in which calm persisted in the U.S. despite jarring news flow. Daily volume dropped to an average of 6.1 billion shares, the second lowest since last October. Negative headlines flashed, from an escalation in trade tensions to emerging market turmoil to continued political chaos in Washington. Yet none was enough to rock the market out of its slumber.
Think back too about how you handled past downturns or, for that matter, how you reacted when stocks began to dip and dive. You may not be able to nail it exactly, but you want to come as close as you can to a blend of stocks and bonds that you'll be okay holding in a variety of market conditions, and then make whatever adjustments are necessary to get you to that mix.
So many people blindly put money into their 401k and assume it will grow into something they can retire on. This is an extremely bad plan for one main reason, lack of diversification. Sure, they might have money in three or four different funds, but it’s still fully invested in stocks and is entirely dependent on market growth. In the event of a crash, they’re absolutely screwed.
Efforts to renegotiate the North American Free Trade Agreement have proved more problematic than many in markets had hoped. Instead of ending Friday, talks with Canada will continue with expectations a deal could be reached within 90 days. Talks with Mexico had proceeded but the U.S. and Canada, as of Friday, appeared to have reached a sticking point.
Nifty and the Sensex saw a sharp correction on Friday, the last trading day of the week as financials rocked the Nifty boat. The Sensex at one point of time was down by over 1000 points and the Nifty had plunged below the 11,000 mark before semblance of sanity returned to the markets. There were 5 principal factors behind the sharp crash in the market on Friday.
TREB’s own survey found that foreign buyers actually had little effect on the market, and it was the chilling effect of the fair housing act that destroyed what was a healthy Toronto real estate market. Although Doug Ford originally promised to free up land, lower prices, and cut red tape, he quickly recanted. He has announced a new buck a beer program.
The latest round of US/China tariffs had been long flagged and both the US increase (10% on US$200 billion of imports from China, but not yet 25%) and China’s less than proportional retaliation (5-10% on US$60 billion of imports) were less than feared. This, along with reports China is planning a broad cut to its tariffs, was positive and leaves scope for negotiations. More significantly, we are still a long way from a full-blown trade war. After implementation of the latest round, only about 12% of US imports will be subject to increased tariffs and the average tariff increase across all imports will be just 1.6% - implying about a 0.2% boost to inflation and a less than 0.2% hit to growth. In China, the economic impact is likely to be less than 0.5% of GDP. This is all a long way from 1930 when the US levied a 20% tariff hike on all imports and other countries did the same making the depression “great”.
So, the way to prepare for a market crash is not necessarily to artfully predict in advance, and step aside when the crash comes. That's virtually impossible. Rather, it can be useful to consider your overall investment strategy ahead of time, so that you know you could stomach the next inevitable crash when it comes. Ideally, through proper diversification and forethought you'll have an investment approach that will enable you to ride out a crash, rather than turning you into another panicked seller. If you only act on these issues when the crash comes, it will likely be too late.
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