Since the Great Recession, the financial system of the country has somewhat matured, thanks to the introduction of tight regulations including Dodd Frank and Basel III with the sole agenda of preventing bundling of mortgages, and in turn another crisis. While there still are plenty of risky loans today, these are not big enough to cause an economic meltdown.
At least you are realistic about a mild softening of prices in the major capitals and a long overdue rise in Brisbane,unlike the doom and gloom people interviewed on 60 Minutes recently.Fear generating predictions about price falls goes on every few years and some so-called news and current events programs are irresponsible in making these out to be accurate forecasts from experts.
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.
As longtime China watchers know, the country’s still-immature markets are in many ways more bubble-prone than their Western counterparts, thanks to heavy involvement from retail investors who often take cues from government policy, rather than quaint notions like earnings. Tanking Chinese stocks—the Shanghai Composite is now down nearly 25% from its January peak—could therefore be taken...
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.
To be able to make good decisions amid a stock market crash, investors will need to be able to remain calm. As Buffett has said, "Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."

So take this time to go over your holdings and tally up how much you have in stocks and how much in bonds. If you're not sure of the asset make-up in some of your investments — which may be the case if you own funds that invest in a combination of stocks and bonds — plug the names or ticker symbols of your funds into Morningstar's Instant X-Ray tool, and you'll see how your portfolio overall is divvied up between stocks, bonds and cash.
The financial crisis ripped through Wall Street 10 years ago, pushing the global economy to the edge of the abyss. One might think those searing experiences would have created a learning opportunity — for managing risk better, understanding structural imbalances in the financial markets, even learning a bit about how our own cognitive processes malfunction.
I live in a housing bubble market with everyone attempting to buy at sky high prices. I bought 4.5 years ago, and am looking at selling for over a 100% gain in that amount of time. Yes attempting to sit on the sidelines waiting for the market to change may not seem the best, but rather than being intent on jumping back into the poker game because you like the action, take your earnings off the table. Markets can remain irrational for exuberant amounts of time, but you have to weigh it out. At the moment a 30% retrace would mean I lose $140,000 worth of equity currently available. I’ll rather that liquidity in the bank any day over paying the mortgage of an asset still owned by a lender, which to me is a liability.
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.

On September 20, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery.[8] The London crash greatly weakened the optimism of American investment in markets overseas.[8] In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.


Mathematicians have studied housing bubbles, such as The University of Pennsylvania, and their HOUSING BUBBLE STRUCTURAL MODEL AND HYPOTHESES models couldn’t figure it out. The factors they studied do play a role, but housing bubbles and crashes are likely a cultural phenomenon (outside of major recessions).  It comes down to values, attitudes, dreams and panic emotions.

While there are risks for local bubbles in markets experiencing inorganic growth, like the Miami condo market for example, it’s wise for investors to focus more on their own investment strategy and less on speculation of the overall market. If able to identify and clearly understand a market and its economy, investors can find success with single-family investments.
With added regulation, institutional investors will be able to breathe easier and have less anxiety about the uncertainty of the cryptocurrency market. In fact, more investors are seeing cryptocurrencies as a viable asset because of their attractive returns: In December 2017 bitcoin hit a record high of almost $20,000 for one tcoin. Although the price has gone down since then, experts predict that Bitcoin's value could actually go higher than that 2017 figure.
This crisis is rooted in the failure to learn the lessons of 2008 and of every other recession since the Fed’s creation: A secretive central bank should not be allowed to manipulate interest rates and distort economic signals regarding market conditions. Such action leads to malinvestment and an explosion of individual, business, and government debt. This may cause a temporary boom, but the boom soon will be followed by a bust. The only way this cycle can be broken without a major crisis is for Congress both to restore people’s right to use the currency of their choice and to audit and then end the Fed.
If you’ve gone with a “set it and forget it” strategy — like investing in a target-date retirement fund, as many 401(k) plans allow you to do, or using a robo-advisor — diversification already is built in. In this case, it’s best to sit tight and trust that your portfolio is ready to ride out the storm. You’ll still experience some painful short-term jolts, but this will help you avoid losses from which your portfolio can’t recover.
The Dow Jones is flying, but the risks of a crash are many and ready to materialize. Donald Trump was elected almost a year ago, at the time of writing. The markets were supposed to have crashed. They did for a few hours. Despite the many protests, marches, and witch hunts that the 2016 presidential election has caused, the Dow has gained about 30% since November 8, 2016.
IMF has cut global growth forecasts for 2018 and 2019, saying that the US-China trade war was taking a toll and emerging markets were struggling with tighter liquidity and capital outflows. IMF in an update to its World Economic Outlook predicted a 3.7 per cent global growth in 2018 and 2019, down from its July forecast of 3.9 per cent growth for both years. 

If you’ve gone with a “set it and forget it” strategy — like investing in a target-date retirement fund, as many 401(k) plans allow you to do, or using a robo-advisor — diversification already is built in. In this case, it’s best to sit tight and trust that your portfolio is ready to ride out the storm. You’ll still experience some painful short-term jolts, but this will help you avoid losses from which your portfolio can’t recover.

Note:  The statements and information presented in this post is not intended as professional investment advice. It is solely an exploration of stock investing and the risks, perils, and behavior of stock markets and the economy. No one should rely on a single source of information or a single stock market and investing professional’s advice.  The overall message of the post might be to diversify stock, real estate, and cash/gold holdings as a hedge against stock market crashes.  Investors should look into hedging strategies but be aware that even hedging may provide limited protection from a crash.
HELL ONFRICKING EARTH AND THE END OF ALL LIFE ON EARTH AS WE KNOW IT IS NOW LITERALLY UP IN OUR FACES, JESUS HELP OUR SORRY ASSES THAT WE are in the 3-5,000,000 shtf survivors. Then comes Planet X, Nibiru showing up in April 2016, tips the poles on the plante 24′, erases the planets magnetic field, meltdown the ice caps and causes 1000 mph fu.///i…g winds trashing up the entire city centers of the all countries of the globe. Flooding, windstorm, hail, Hurricane, sunamis, etc, Crop destruction, anmimals running and migrating to the center of the Country to safe areas, futher depleting animal stocks in coastline cites, leaving the only avaible meat source to eat, fat, larger over women and men who did not prep, now the new food source to sustain the Dred Lock and lantino, ganstar drug dealing survivors.
Stock market crashes are usually caused by more than one factor. In fact, there are often two sets of reasons for a crash. One set of conditions creates the environment for the sell-off, and another set of factors triggers the beginning of the sell-off. Just because there is a market bubble, it doesn’t mean the market will crash. Usually something needs to occur to cause investors to begin selling and buyers to step away from the stock market.
Since traditional statistical methods are perhaps less appropriate for extreme markets, other paths of examination may be more fruitful. For example the Santa Fe Institute is examining links between different disciplines. Potentially a market crash may have more in common with a growing pile of sand, than how the same market performs outside of a crash environment. When a grain of sand is added to an existing pile so the pile grows ever higher. Most of the time, one more grain will cause the pile to grow in height by a just fraction. However, at other times the addition of a single grain will lead to a collapse and in turn that collapse may be small, large or potentially even massive. Some researchers believe that better understanding these sorts of events hold the key for a better understanding of extreme market events, because today many traditional models simply fail to hold up.
Spread your risk. Having a well-designed mix of investments is a great idea anytime, but especially so in a down market. That's because you don't take a pounding by having all your eggs in one potentially leaky basket. Studies show that holding a judicious mix of growth and value stocks, possibly in international as well as U.S. companies, and some bonds and cash investments too, is a great way to minimize investment loss.

The benchmark S&P BSE Sensex swung from a 1 percent gain to a drop of as much as 3 percent -- its wildest intraday move in more than four years -- before closing with a 0.8 percent loss. Friday’s declines showed that investors remain jittery about Indian financial shares after a recent default by Infrastructure Leasing & Financial Services Ltd. shook confidence in the sector.

Since February 2013, the broad market has three circuit breakers tied to the performance of the S&P 500 index. If it loses 7%, 13%, or 20% of its value compared to the previous days close, trading halts for a period of time. If anything can be considered a stock market crash, it's hitting these circuit breakers.Remember, Black Monday (October 19, 1987) saw the DJIA lose 22.6% in a single day.

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.”
Share Market Live: Indian stock markets (Sensex and Nifty) closed lower on Friday facing a knee-jerk reaction in the intraday deals with Sensex closing 280 points lower and Nifty slipping below 11,150. During the day, a market-wide sell-off was seen in stocks with the benchmark Sensex plummetting 1,128 points and Nifty tripping below 10,900. Shares of Yes Bank, collapsed 34% intraday, settled down 29% while DHFL shares ended down 42% after nosediving 60% intraday.
According to data from Equifax in August 2017, deep subprime auto loans -- i.e., loans with an origination VantageScore of 530 or less, on a scale of 300 to 850 -- have hit delinquency rates that hadn’t been seen since 2007. Interestingly enough, when examining the auto market as a whole, no red flags arise in terms of delinquency rates. But if you focus solely on subprime and deep subprime loans, they’ve been deteriorating of late. 
Research at the Massachusetts Institute of Technology suggests that there is evidence the frequency of stock market crashes follows an inverse cubic power law.[15] This and other studies such as Prof. Didier Sornette's work suggest that stock market crashes are a sign of self-organized criticality in financial markets.[16] In 1963, Mandelbrot proposed that instead of following a strict random walk, stock price variations executed a Lévy flight.[17] A Lévy flight is a random walk that is occasionally disrupted by large movements. In 1995, Rosario Mantegna and Gene Stanley analyzed a million records of the S&P 500 market index, calculating the returns over a five-year period.[18] Researchers continue to study this theory, particularly using computer simulation of crowd behaviour, and the applicability of models to reproduce crash-like phenomena.
In the US specifically, lawmakers have constrained the ability of the Fed to provide liquidity to non-bank and foreign financial institutions with dollar-denominated liabilities. And in Europe, the rise of populist parties is making it harder to pursue EU-level reforms and create the institutions necessary to combat the next financial crisis and downturn.
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.
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.
The big banks expect interest rates to continue to rise to between 2.25 per cent and 2.75 per cent by the end of 2019. And that will keep turning the screws on Canadians’ budgets, with more money going toward mortgage and other debt payments and less left as disposable income. Climbing rates will also continue to raise the bar for wannabe homeowners who to pass the federal mortgage stress test in order to qualify for a new mortgage.

A bull market -- just like the one the U.S. stock market has experienced since 2009 -- happens when investors are optimistic about the markets and the economy, and when demand outpaces supply, thus driving up share prices. As bull markets peter out -- they can last anywhere from two years to nine years -- all it takes is a significant market event to create a crisis of confidence among investors and draw more sellers into the market. This can create a stock market crash that leads to a bear market.
The month began with more bad news. The Labor Department reported that the economy had lost a staggering 240,000 jobs in October. The AIG bailout grew to $150 billion. Treasury announced it was using part of the $700 billion bailouts to buy preferred stocks in the nations' banks. The Big Three automakers asked for a federal bailout. By November 20, 2008, the Dow had plummeted to 7,552.29, a new low. But the stock market crash of 2008 was not over yet.
The Warren Buffett Indicator is less mysterious than it sounds. It might as well be called the common-sense indicator. It’s simply the relationship between gross domestic product (GDP)—or the sum total of a country’s economic activity—and the value of stocks in the S&P 500. So, in simpler terms, the Warren Buffett Indicator in terms of Wall Street measures market capitalization versus U.S. GDP. (Source: “Why Warren Buffett Is Betting Against Warren Buffett,” Seeking Alpha, October 24, 2017.)
These countries are full of boastful bravado about their ability to stand on their own two feet without the US, the reality is the abruptness of the protectism wave might be too much. If these economies collapse, including a China housing market collapse would a Tsunamai be sent toward US shores that would send into recession.  Right now, this could be the number one threat.
Though, again, that may be generally true, at times of severe market moves, surprisingly, often there is very little new news to justify the price change. Research on what moves stock prices, has found that prices can often move a lot without news. Also, in his book Irrational Exuberance, Robert Shiller finds that one of the biggest stock market moves of all time, 1987's Black Monday decline wasn't driven by any obvious economic event. Therefore, it's not clear that market crashes are the result of some unanticipated bad news that shocks investors.
Finally, once the perfect storm outlined above occurs, the policy tools for addressing it will be sorely lacking. The space for fiscal stimulus is already limited by massive public debt. The possibility for more unconventional monetary policies will be limited by bloated balance sheets and the lack of headroom to cut policy rates. And financial-sector bailouts will be intolerable in countries with resurgent populist movements and near-insolvent governments.
This does not mean that successful investing is impossible; only that the more we learn about market behavior, the more it seems that trying to deal with uncertainty is more important than pretending that we can have any certainty. More precisely, managing risk seems to be a better approach to investing than concocting forecasts on asset returns. This could mean, for example, finding ways of identifying when market participants start to align on one side of a trade by measuring correlations, or measuring returns to flash a warning when they start growing at “super-exponential” rates.
The Fed didn't realize a collapse was brewing until March 2007. It realized that hedge fund housing losses could threaten the economy. Throughout the summer, banks became unwilling to lend to each other. They were afraid that they would receive bad MBS in return. Bankers didn't know how much bad debt they had on their books. No one wanted to admit it. If they did, then their credit rating would be lowered. Then, their stock price would fall, and they would be unable to raise more funds to stay in business.

The internal reasons included innovations with index futures and portfolio insurance. I've seen accounts that maybe roughly half the trading on that day was a small number of institutions with portfolio insurance. Big guys were dumping their stock. Also, the futures market in Chicago was even lower than the stock market, and people tried to arbitrage that. The proper strategy was to buy futures in Chicago and sell in the New York cash market. It made it hard – the portfolio insurance people were also trying to sell their stock at the same time.[14]
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.
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%.
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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.
The joint report continued: "At 2:45:28 p.m., trading on the E-Mini was paused for five seconds when the Chicago Mercantile Exchange ('CME') Stop Logic Functionality was triggered in order to prevent a cascade of further price declines. In that short period of time, sell-side pressure in the E-Mini was partly alleviated and buy-side interest increased. When trading resumed at 2:45:33 p.m., prices stabilized and shortly thereafter, the E-Mini began to recover, followed by the SPY".[41] After a short while, as market participants had "time to react and verify the integrity of their data and systems, buy-side and sell-side interest returned and an orderly price discovery process began to function", and by 3:00 p.m., most stocks "had reverted back to trading at prices reflecting true consensus values".[41]
— The Big Picture is Being Obscured By Short-Term Fears. "Animal Spirits" are ruling the stock market. Millions of investors are afraid that the torrent of cash created by low interest rates, hefty piles of corporate reserves and even more giveaways in the new U.S. tax code won't be enough to juice up a world economy (outside of the developing world) that may be slowing down.
“My view is that the markets are extremely overvalued, and can fall even 2,000 points from here. (Sensex). The Nifty can correct by about 1,000 points. Nothing has changed fundamentally, I mean we have the same macro-economic situation, etc, but when a sell-off happens, nobody can predict. Financials, especially NBFCs are overvalued,” Rajat Sharma, founder, Sana Securities told FE Online.

The transition to a US centered economy puts the country into a vulnerable period of uncertainty and GDP risk. Companies are hoarding products from China right now while the tariff is 10%, but on January 1st 2019, it will be 25% and that should stop imports completely, especially if the US dollar should weaken. Will companies build factories here or instead hold off and hope for a Trump loss in 2020?
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