As of July 2011, only one theory on the causes of the flash crash was published by a Journal Citation Reports indexed, peer-reviewed scientific journal.[50] It was reported in 2011 that one hour before its collapse in 2010, the stock market registered the highest reading of "toxic order imbalance" in previous history.[50] The authors of this 2011 paper apply widely accepted market microstructure models to understand the behavior of prices in the minutes and hours prior to the crash. According to this paper, "order flow toxicity" can be measured as the probability that informed traders (e.g., hedge funds) adversely select uninformed traders (e.g., market makers). For that purpose, they developed the Volume-Synchronized Probability of Informed Trading (VPIN) Flow Toxicity metric, which delivered a real-time estimate of the conditions under which liquidity is being provided. If the order imbalance becomes too toxic, market makers are forced out of the market. As they withdraw, liquidity disappears, which increases even more the concentration of toxic flow in the overall volume, which triggers a feedback mechanism that forces even more market makers out. This cascading effect has caused hundreds of liquidity-induced crashes in the past, the flash crash being one (major) example of it. One hour before the flash crash, order flow toxicity was the highest in recent history.
Yes Bank share price collapsed as much as 34% to more than a 2-year low on Friday morning after country's fifth-largest private sector lender said that the present MD & CEO Rana Kapoor may continue as MD & CEO till 31 January 2019.  The board of directors of the bank are scheduled to meet on 25 September 2018 to decide on the future course of action, Yes Bank said in a regulatory filing. The stock of Yes Bank bottomed to over a 2-year low of Rs 210.1, down 34.03% on BSE while the stock tanked 31.67% to Rs 218.10 on NSE. Unusually high trading volumes were seen on the counters of Yes Bank, as at 9:39 am, about 10.5 crore equity shares of Yes Bank exchanged hands on both NSE and BSE with 9.7 crore equity shares being traded on NSE alone.
Interesting points. To say a 2 billion dollar a day trade deficit is meaningless might be understating it. Running trade deficits every year is dangerous and leads to the recession you’re fearing. It’s the trade policies that make it happen. The global economy was highly dependent on US willing to run huge trade deficits and Europe and China are undergoing withdrawal problems.
The equity market actually peaked in late 2007, and appeared to be undergoing a correction in early 2008. However, after a brief recovery in April 2008 failed to reach the all-time highs, the market fell for the following 11 months. By March 2009 the S&P 500 index had fallen more than 55%. Unprecedented action by the Federal Reserve to stimulate the economy and market led to the beginning of the bull market that has continued until today.
Using a simple options calculator (like that available at options-price.com) we can calculate how our put options purchased in the example above would perform after a 20% decline in the span of just a month. In this hypothetical example, SPY drops to 175 and implied volatility rises to 55 (for this example I took the VIX level of 45 in October 2002, as suggested by Spitznagel, and added 10 points for 10% out-of-the-money put options). Our puts have gone from $9 each in value to $328.10. We own 55 of them so they are now worth just over $18,000 in total.
BMO’s senior economist Benjamin Tal said in a Toronto Star report on October 14th, the Ontario Government’s Places to Grow program was primarily responsible for the fast rising prices in the GTA market. He also suggests other red tape factors worsened the situation. Prices in Newmarket, Markham, Mississauga, Richmond Hill, Bradford East Gwillimbury and Aurora have definitly crashed.
using cities like vancouver and toronto to back up your theory is telling half the truth. you’re right, you cannot (and should not) time the market in such cities and the type of economy they’re based on. but using calgary as an example, it’s a whole different ball game,the collapse in economy with more than 40,000 jobs so far lost in alberta has caused a drop in house prices and will continue to do so till oil prices is goes up again. personally my wife and i have witnessed 4.5% drop in our home value (around $35,000) and we’re not going to wait and see our remaining $85,000 equity wiped out by the time the dust settles on this oil crash. it is financial suicide not to sell and rent for the next couple of years in such market.
It’s not over.  The worst October stock market crash since 2008 got even worse on Friday.  The Dow was down another 296 points, the S&P 500 briefly dipped into correction territory, and it was another bloodbath for tech stocks.  On Wednesday, I warned that there would be a bounce, and we saw that happen on Thursday.  But the bounce didn’t extend into Friday.  Instead, we witnessed another wave of panic selling, and that has many investors extremely concerned about what will happen next week.  Overall, global stocks have now fallen for five weeks in a row, and during that time more than 8 trillion dollars in global wealth has been wiped out.  That is the fastest plunge in global stock market wealth since the collapse of Lehman Brothers, and it is yet another confirmation that a major turning point has arrived.
In this book, published in 2003, Talbott predicted a housing crash that would start around 2005. In fact, the peak of the housing market was the summer of 2005. It took longer for the fall in prices to take down the whole economy. Talbott explained in an easy-to-understand way why it was inevitable that housing prices would fall and crash the economy. The advice over what to do about it wasn't as good as the prediction.
Some academics view the Wall Street Crash of 1929 as part of a historical process that was a part of the new theories of boom and bust. According to economists such as Joseph Schumpeter, Nikolai Kondratiev and Charles E. Mitchell, the crash was merely a historical event in the continuing process known as economic cycles. The impact of the crash was merely to increase the speed at which the cycle proceeded to its next level.
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The crash shook the then-booming industry, and led to the bankruptcy of several companies producing home computers and video game consoles in the region. It lasted about two years. Analysts of the time expressed doubts about the long-term viability of video game consoles and software. The North American video game console industry recovered a few years later, mostly due to the widespread success of the Nintendo Entertainment System (NES) in 1985; Nintendo designed the NES as the Western branding for its Famicom console originally released in 1983 to avoid the missteps that caused the 1983 crash and avoid the stigma that video games had at that time.

Seventh, US and global equity markets are frothy. Price-to-earnings ratios in the US are 50% above the historic average, private-equity valuations have become excessive, and government bonds are too expensive, given their low yields and negative term premia. And high-yield credit is also becoming increasingly expensive now that the US corporate-leverage rate has reached historic highs.
There are limits to examining historical data too. Nassim Taleb cites the error of believing that the highest mountain you’ve seen is the tallest. It’s far more likely that the tallest mountain is one you haven’t seen yet. In the same way with market crashes, we can look at market declines over different geographies and time periods, but it does not mean that there is necessarily any sort of hard limit there.
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Some enduring red flags, Filia said, are in the form of politics and geopolitics — growing populism across Europe as well as Middle East and Asian tensions. But more than that he sees shrinking liquidity — central bank spending flows in reverse for the first time in a decade — as the "first real crash test" for momentum and volatility, as well as rising interest rates.
Refraining from tinkering with your portfolio, or even making dramatic changes such as fleeing to cash or switching to different investments altogether, may be challenging at times. That can especially be the case when the market appears to be going haywire and every news story and TV financial show you see seems to suggest that the market is on the verge of Armageddon.

All this concern about decelerating growth is hindering China’s deleveraging plans that it promised to follow through on at the beginning of this year. According to the Financial Times, Chinese debt was in the range of 170% of Gross Domestic Product prior to the Great Recession. But in 2008, China responded to the financial crisis with a huge infrastructure program---building empty cities to the tune of 12.5% of GDP, the biggest ever peacetime stimulus.
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.
Canada, along with Australia, stands out both for its sky-high housing prices and its gargantuan household debt levels. Home prices have grown by 24 per cent since 1999, compared to 18 per cent in Australia, 13 per cent in the U.S. and 12 per cent in the U.K. The amount that Canadian families owe, meanwhile, is as big as this country’s GDP, a level surpassed only in Australia, where household debt is now larger the size of the economy.

My wife an I are looking to buy our first home and to know surprise, yes we are millennials. We live in Omaha, NE. According to CNBC it is one of the top 5 most difficult cities for millennials to buy their first home thanks to very low supply and high prices. Should we opt to continue to rent a 1 bedroom apt for $800 per month while waiting out this craziness. Or should we buy a home now to get locked in a historically low interest rate? We are torn, because we want to get into a home, but are patient and disciplined enough to wait if that’s the best financial decision. Do you see this overvalued market correcting anytime soon? Any help or insight would be greatly appreciated.

It now looks like the secular bull market in stocks is turning into a secular bear market that could last for several years if not decades. The stock market acts as a sentiment indicator for what happens in the real economy. No indicator is perfect and stock market moves will be exaggerated in both directions. It is now likely that the world is starting an economic downturn of epic proportions.
If the market went down, is it because one company changed its business model or its forecasts? Because a mutual fund changed its strategy? Because a glitch triggered a wave of selling? Because yesterday it went up a lot and people decided to take their profits and invest elsewhere? Because one large investor decided to cash out on high valuations? Because another round of stock options for Facebook employees matured, and they sold? On the whole, we can't say why the market went down today is due to a single reason.

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.
It used a hodge-podge menu of about $150 billion in short- and long-term debt, and $180 billion in repurchase, or "repo" agreements, as collateral on short-term repo loans. Once investors began doubting the quality of the collateral Lehman was using, they largely stopped allowing the company to roll over the repo loans into the next 24-hour period, and began asking for their money back -- in full.
Ideally, at the start of your investment journey, you did risk profiling. If you skipped this step and are only now wondering how aligned your investments are to your temperament, that’s OK. Measuring your actual reactions during market agita will provide valuable data for the future. Just keep in mind that your answers may be biased based on the market’s most recent activity.
A little more than a week later, stocks sank after a tweet from the president challenged the idea that Russia’s missile defense system could shoot down American smart bombs. Investors clearly worry that Trump’s tweeted rhetoric could be taken the wrong way by one or more global leaders, leading to escalation, or even conflict. Should that happen, the stock market could tank.

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."


To be clear, this isn't an exhaustive list of things that could potentially cause a stock market crash. And it's likely that more than one of these factors could combine to cause a crash. The 2008 crash, for one, was primarily caused by excessive speculation that caused a bubble in real estate prices, along with excessive leverage taken on by both consumers and financial institutions, as well as investor panic after banks started to fail.
A stock market bubble inflates and explodes when investors, acting in a herd mentality, tend to buy stocks en masse, leading to inflated and unrealistically high market prices. In describing market bubbles, former U.S. Reserve Chair Alan Greenspan referred to investors' "irrational exuberance" on the stock market in 1996, although his prophecy didn't really ring true, as the stock market continued to grow before entering into bear market territory in 2000. A stock market bubble's "pop" is often a signal that the stock market is experiencing a crash over the short-term, and is shifting from bull-to-bear-market mode over the long-term.
By 1983, consumers found that most predicted uses of home computers were unrealistic, except for games. Children used most home computers[9]—Coleco planned to market its Adam home computer to "boys age 8 to 16 and their fathers ... the two groups that really fuel computer purchases"[10]—so games dominated home computers' software libraries. A 1984 compendium of reviews of Atari 8-bit software used 198 pages for games compared to 167 for all other software types.[11] Because computers generally had more memory and faster processors than a console, they permitted more sophisticated games. They could also be used for tasks such as word processing and home accounting. Games were easier to duplicate, since they could be packaged as floppy disks or cassette tapes instead of ROM modules (though some cassette-based systems retained ROM modules as an "instant-on" option). This opened the field to a cottage industry of third-party software developers. Writeable storage media allowed players to save games in progress, a useful feature for increasingly complex games which was not available on the consoles of the era.
On April 21, 2015, nearly five years after the incident, the U.S. Department of Justice laid "22 criminal counts, including fraud and market manipulation" [10] against Navinder Singh Sarao, a trader. Among the charges included was the use of spoofing algorithms; just prior to the Flash Crash, he placed thousands of E-mini S&P 500 stock index futures contracts which he planned on canceling later.[10] These orders amounting to about "$200 million worth of bets that the market would fall" were "replaced or modified 19,000 times" before they were canceled.[10] Spoofing, layering, and front running are now banned.[3]
Global cues: The subdued Asian markets have also weighed on market sentiment. Brokers said weakness was seen in most Asian markets as high US yield and good economic data led to fear that investors would move to the US, dampened trading sentiments there. Japan's Nikkei was trading 0.46 per cent down at 23,999 as investors took profit from its recent rally to a 27-year high. Meanwhile, Hong Kong's Hang Seng dipped over 1.50 per cent at 26,628.64.
In 2013, the stock market finally recovered. In the first six months, it gained more points than in any year on record. Stock prices rose faster than earnings, creating an asset bubble. The Dow set over 250 closing records until February 2018. Fears of inflation and higher interest rates almost sent the Dow into a correction. Like many other past stock market crashes, it did not lead to a recession.

I have good reasons why i prep. I just dont have any confidence in govenment and am no convinved that covernment and city officials, etites etc are busy sitting around worry thier entitles asses off worry about me not eating or having a hard time. Or i am being too paranoid. Agency ass clowns think that you all are so dumb to relax and so that they can steer thinking by convine shtf-effers that i have bad grammar and can’t spell.


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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
These bold plans have led the rating agency Moody’s to downgrade Italy’s sovereign debt to one notch above junk.  Uncertainty in Italy is a major geopolitical factor weighing on global sentiment.  Investors are rightly concerned about the Rome-Brussels stand-off, given that Italy is the Eurozone’s third-largest economy and its debt is held by every major bank in Europe—and most in the U.S. As interest rates rise in Italy, the prospect of insolvency rises alongside.

Using a simple options calculator (like that available at options-price.com) we can calculate how our put options purchased in the example above would perform after a 20% decline in the span of just a month. In this hypothetical example, SPY drops to 175 and implied volatility rises to 55 (for this example I took the VIX level of 45 in October 2002, as suggested by Spitznagel, and added 10 points for 10% out-of-the-money put options). Our puts have gone from $9 each in value to $328.10. We own 55 of them so they are now worth just over $18,000 in total.


In the recent statement, the head of research at Fundstrat Global Advisors pointed out two major types of crypto players — those who are “using it and have wallets in crypto,” and those who belong to a speculative side of the market. According to Lee, those two sides of the crypto community should find a way for “sort of interacting with each other” for crypto investors not to get burnt by crashes like this.
In a 2011 article that appeared on the Wall Street Journal on the eve of the anniversary of the 2010 "flash crash", it was reported that high-frequency traders were then less active in the stock market. Another article in the journal said trades by high-frequency traders had decreased to 53% of stock-market trading volume, from 61% in 2009.[81] Former Delaware senator Edward E. Kaufman and Michigan senator Carl Levin published a 2011 op-ed in The New York Times a year after the Flash Crash, sharply critical of what they perceived to be the SEC's apparent lack of action to prevent a recurrence.[82]
The average price of a detached house in the GTA rose to $1,019,416 from $1,008,361 last month. YoY, detached home prices have fallen 1.4% in the 416 area code and .4% in the 905 area code.  Home prices in the 416 area code fell from $1,342,363 to $1,311,265 , a drop of $31,000. The price of a condo apartment in the 416 area code fell from $615,582 to $603,153 yet that average price 8.6% higher than last October.

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Agreed, the timing is huge, I know a few people who sold in 2007-2008 in Vancouver and, well, it’s 5 years later and now they’re looking at probably another 5 at least if the market does crash. They thought a crash was coming and were wringing their hands when GFC hit. Then the credit taps were turned to 11 and prices in parts of Vancouver are way up from then, including properties these people were eyeing on MLS. Now it’s another few hundred K on top at least. Ouch.
Although we’ve seen more recognition of cryptocurrencies as investment vehicle, they’re still considered high-risk investments. Some see Bitcoin as safe-haven in case of a global crash due to its decentralized nature, the low correlation with the stock markets and the limited supply. Though, there is no reliable data available on how cryptocurrencies behave during a stock market crash. However, if you’re willing to take the risk, adding a small percentage of Bitcoin or cryptocurrency stocks to a diversified portfolio could be a worthwhile investment decision.
Officials announced that new trading curbs, also known as circuit breakers, would be tested during a six-month trial period ending on December 10, 2010. These circuit breakers would halt trading for five minutes on any S&P 500 stock that rises or falls more than 10 percent in a five-minute period.[76][77] The circuit breakers would only be installed to the 404 New York Stock Exchange listed S&P 500 stocks. The first circuit breakers were installed to only 5 of the S&P 500 companies on Friday, June 11, to experiment with the circuit breakers. The five stocks were EOG Resources, Genuine Parts, Harley Davidson, Ryder System and Zimmer Holdings. By Monday, June 14, 44 had them. By Tuesday, June 15, the number had grown to 223, and by Wednesday, June 16, all 404 companies had circuit breakers installed.[78] On June 16, 2010, trading in the Washington Post Company's shares were halted for five minutes after it became the first stock to trigger the new circuit breakers. Three erroneous NYSE Arca trades were said to have been the cause of the share price jump.[79]
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FIDough backed this up with, “Lots of research shows that most people tend to sell near the bottom, and reenter the market after it has gone up significantly.  In other words, most people do worse by trying to protect their money from market crashes.  The truth is, if you keep on investing and stick to your rebalancing plan throughout market cycles, you will do great.”
It looks like it could be another tough week for global financial markets.  As the week began, markets were down all over the world, and relations between the United States and Saudi Arabia have taken a sudden turn for the worse.  That could potentially mean much, much higher oil prices, and needless to say that would be a very bad thing for the U.S. economy.  It has really surprised many of us how dramatically events have begun to accelerate here in the month of October, and the mood on Wall Street has taken a decidedly negative turn.  Yes, U.S. stocks did bounce back a bit on Friday (as I correctly anticipated), but it was much less of a bounce than many investors were hoping for.  And this week got off to a rough start with all of the major markets in Asia down significantly…
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.
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?
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