Whereas London was once the financial capital of western Europe, it remains to be seen if it will continue to be the financial capital of the European Union. Hence the drop in the value of the pound. Hence economic uncertainty for all companies which do business in the UK or the rest of the Continent. Will the UK fall into a recession? How will that affect global demand?
Editor’s Note: The following article has been contributed by Daisy Luther at The Organic Prepper web site. As always, Daisy has put together an excellent primer detailing the conditions we currently face, potential outcomes, and strategies you can implement to prepare for an inevitable crash in not just stocks markets, but the way of life we have come to know in America.
I’m a first time buyer and i’m exploring to purchase a condo in downtown Toronto. A one decent 550sqft condo sells for about 450k (which i find absurd). Would you advise waiting till mid 2018, with the new stress test rules, in hopes that the prices will decrease? I can’t justify paying so much, but at the same time the prices seem to be going up every month.
The day began on a strong note as good global cues and stronger opening on the rupee boosted sentiment in D-Street. The Sensex had risen 300 points in intraday trade. But a sharp selloff in the afternoon, led by a 50 percent crash in Dewan Housing Finance’s shares as well as on Indiabulls Housing weighed big on the market. The Sensex fell 1,000 points, while the Nifty had managed to breach 11,000-mark as well.
It is just another business cycle, albeit an extended one, coming to an end: not TEOTWAWKI. Therefore it is safe to say that the downturn will be extended too because foreclosures (as an example) have not been assimilated from the last crash yet; and a new round of bankruptcies and foreclosures will follow the economic decline for those who are levered.
Homeowners are not taking as much equity out of their homes. Home equity rose to $85 billion in 2006. It collapsed to less than $10 billion in 2010. It remained there until 2015. By 2017, it had only risen to $14 billion. Obamacare is one reason for that. Bankruptcy filings have fallen 50 percent since the ACA was passed. In 2010, 1.5 million people filed. In 2016, only 770,846 did.
This book has lots of good statistical information to back up its premises...which seem to boil down to...Buy a home within your means (and he does define how to find that out, which is a good thing if you can't figure it out on your own)...Anticipate that the home market could go down as interest rates rise making your home harder to sell in a pinch (to his credit, he tells you how to avoid that too)...and a few other common sense rules of buying that could be applied to many things. If a person is going to spend 6 figures on anything, you would think that they would take the time to learn what they are doing, but it is obvious to the author and to many other people watchers in the world that too many people just don't put effort into watching where they put their money. So, if you are a person who carefully spends your money without rushing into any purchase, you probably have enough sense to not have to buy this book; and if you are person who is just the opposite, you probably aren't too concerned even now about learning anything about your home purchase, so you aren't even reading this review. Last note: if you were going to buy properties to use for investment purposes, this book could be of assistance. Hope this helps.
A stock market anomaly, the major market indexes dropped by over 9% (including a roughly 7% decline in a roughly 15-minute span at approximately 2:45 p.m., on May 6, 2010) before a partial rebound. Temporarily, $1 trillion in market value disappeared. While stock markets do crash, immediate rebounds are unprecedented. The stocks of eight major companies in the S&P 500 fell to one cent per share for a short time, including Accenture, CenterPoint Energy and Exelon; while other stocks, including Sotheby's, Apple Inc. and Hewlett-Packard, increased in value to over $100,000 in price. Procter & Gamble in particular dropped nearly 37% before rebounding, within minutes, back to near its original levels. The drop in P&G was broadcast live on CNBC at the time, with commentator Jim Cramer commenting:
Obviously, some prediction of the market's downfall is going to turn out to be right. The market will go into a major slump again at some point. After all, since 1929 we've suffered through 20 bear markets where stock prices have fallen 20% or more, and even before the current turbulence, we've endured 26 corrections of at least 10% but less than 20%. But it's impossible to know in advance whether heightened volatility or even a decline that appears to gathering momentum will turn out to be The Next Big One.
i would completely disagree with you on the lending to people who should not have gotten loans part. I was a person who got a loan during that time. I made all my payments, but it was a stated income loan with almost no verification of income. I basically said I want to buy a house for this much and they said okay. Things are so much different now.
One of the reasons Warren Buffett’s predictions tend to have more weight is that they’re less based on outright fortune telling and more on a series of clear indicators. In other words, the Warren Buffett Indicator works like a barometer. It does not predict rain, per se, but it does tell you whether you should look for an umbrella in the closet to keep it handy for the next day.
On Friday, September 19, the Dow ended the week at 11,388.44. It was only slightly below its Monday open of 11,416.37. The Fed established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. It loaned $122.8 billion to banks to buy commercial paper from money market funds. The Fed's announcement confirmed that credit markets were partially frozen and in panic mode.
In addition, the rapid growth of the video game industry led to an increased demand for video games, but which the manufacturers over-projected. An analyst for Goldman Sachs had stated in 1983 that the demand for video games was up 100% from 1982, but the manufacturing output increased by 175%, creating a surplus in the market. Raymond Kassar, the CEO of Atari, had recognized in 1982 that there would become a point of saturation for the industry, but did not expect this to occur until about half of American households had a video game console; at the time, only about 15 million machines had been sold, far below this expected point.
Is this going to be another October to remember for Wall Street? As I have explained previously, the month of October has historically been the worst month by far for the U.S. stock market, and it has also been the month when our most famous stock market crashes have taken place. The stock market crash that started the Great Depression in 1929 happened in October. The largest single day percentage decline in stock market history happened in October 1987. And most of us still remember what happened in October 2008. So will we be adding October 2018 to that list? Well, so far things are certainly moving in that direction. Between Wednesday and Thursday, the Dow Jones Industrial Average plunged a total of 1,378 points. And the S&P 500 has now broken below the all-important 200-day moving average. If the S&P 500 bounces back above the 200-day moving average on Friday, that will be a sign that things have stabilized at least for the moment. If that doesn’t happen, all hell might break loose next week.
If you had reasonably good timing and sold out of the US in 2004-2007, you’d be well ahead by now, but only around now-ish might you be looking to buy back in: ~6-8 years. The bust from Toronto’s 1989 peak came a little quicker, but you still had 5-6 years to sit out — and if you decided to get cozy in your rental and make it an even decade, you only missed the bottom by about 10%.
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.
On October 24, many of the world's stock exchanges experienced the worst declines in their history, with drops of around 10% in most indices. In the US, the DJIA fell 3.6%, i.e. not as much as other markets. Instead, both the US dollar and Japanese yen soared against other major currencies, particularly the British pound and Canadian dollar, as world investors sought safe havens. Later that day, the deputy governor of the Bank of England, Charles Bean, suggested that "This is a once in a lifetime crisis, and possibly the largest financial crisis of its kind in human history."
To sum it up, while the Buffett Indicator is certainly a great snapshot of stock valuations, it's not a stand-alone metric that you should use to determine when to buy or sell. When asked about the Buffett Indicator and another favorite metric at Berkshire's 2017 annual meeting, Buffett said that, "It's just not quite as simple as having one or two formulas and then saying the market is undervalued or overvalued."
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.
Until 1982, few third-party console games existed other than Activision's. Imagic and Games by Apollo demonstrated their own 2600 cartridges in January 1982, and Coleco announced several 2600 and Intellivision games. Parker Brothers, CBS Video Games, and Mattel also announced 2600 cartridges at the February Toy Fair, and Coleco announced the ColecoVision. At the Summer 1982 Consumer Electronics Show, 17 companies including MCA Inc. and Fox Video Games announced 90 new Atari games. By 1983, an estimated 100 companies were vying to get a foothold in the video game market.
“The accepted version of history is that the Federal Reserve was created to stabilize our economy… [but] even the most naive student must sense a grave contradiction between this cherished view and the System’s actual performance,” wrote G. Edward Griffin in his book The Creature from Jekyll Island. “Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of ’29 to ’39; recessions in ’53, ’57, ’69, ’75, and ’81; a stock market ‘Black Monday’ in ’87; and a 1000% inflation which has destroyed 90% of the dollar’s purchasing power.”
Real Wealth Strategist is an investment newsletter. Matt Badiali’s work has taken him to Papua New Guinea, Iraq, Hong Kong, Singapore, Haiti, Turkey, Switzerland and many other locations around the world. He’s visited countless mines and oil wells internationally, interrogated CEOs about their latest resource prospects and analyzed all manners of geologic data. Matt believes the best way to be sure if an investment is safe (and correctly made) is to see it in person.
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.