When Everyone is On the Same Side of a Trade, the Market is About to Crash
Economist Blake LeBaron has discovered an important cause of stock market crashes:
During the run-up to a crash, population diversity falls. Agents begin using very similar trading strategies as their common good performance is reinforced. This makes the population very brittle…
In other words, when everyone is making the same trade, it will likely lead to a crash.
Tyler Durden summarizes this [...]
The next major wave of the economic collapse is rapidly approaching and time is running out!!!
Margin debt hitting levels only seen ONE other time in history!
Some times in history, investors feel so confident about the future of stocks, they actually use up all their available cash and then borrow money to invest in the stock market. Now is one of those times!!!
The chart below was created by Doug Short, see his outstanding work here.
From Casey Research:
In a wide-ranging interview with Casey Research editor Louis James, Doug Casey discusses why it’s imperative to start diversifying one’s assets today, and provides some guidance in considering countries to diversify into.
L: Doug, we’re getting a lot of questions from readers on how to follow your advice to diversify assets politically. I know it’s a prickly subject, but what can you tell us about getting our money out from [...]
Two numbers even the biggest stock market bulls should be concerned about now
From Kimble Charting Solutions:
Earlier this month I shared that cash levels/negative net worth in brokerage accounts were nearing the lowest levels in history. (see post here) The last three times levels were this low the market fell in price.
My mentor Sir John Templeton said the four most dangerous words in investing are…”It’s different this time!”
The chart below reflects something “IS DIFFERENT THIS [...]
The Real Crisis: “People Have Lost Trust In The Government And The Market”
The death of the ‘cult of equities’ was a popular topic this year among both fringe blogs and the best-known institutional asset managers and sell-side strategists. As AP discusses in this excellent article, ordinary Americans – defying decades of investment history – are selling stocks for a fifth year in a row. It’s the first time ordinary folks have sold during a [...]
“If you don’t understand what ‘get the hell out’ means, there’s not much I can do for you,” Ann Barnhardt passionately told blogger Warren Pollock, as she warned viewers of systemic failure in the U.S. financial system, as well as the certainty that American savers will be robbed of their retirement, brokerage and savings accounts in the process.
Barnhardt, the former commodities broker, cites the latest and hushed court ruling in the 2007 [...]
Former money manager Ann Barnhardt, who in November of 2011 made the decision to cease operations of her brokerage firm and return funds to her customers citing “systemic” problems within the entire financial industry, has issued a new warning about the stability of U.S. banks and the safety of individual deposit accounts.
The warning, stemming from a recent federal appeals court ruling surrounding customer funds lost during the 2007 collapse [...]
From Zero Hedge:
Just out from futures broker PFG Best to clients, where the owner’s suicide attempt apparently has led to a whole new MF Global spinoff.
Monday, July 9, 2012
Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts. PFGBEST is wholly owned by Mr. Wasendorf. Therefore, the NFA and other officials have put all funds on hold, and…
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Most traders are men, macho men. Yes, maybe 95% traders are males. It’s bred in the DNA over the centuries.
Once our killer instinct and hunting skills kept us from starving. Today male traders are still on the hunt, but losing money. Secretly blaming dad and mom. Warning, they’re not the real enemy. You are.
Seriously, time to [...]
Guest Post via Gonzalo Lira
Nine weeks after its bankruptcy, the general public still hasn’t quite realized the implications of the MF Global scandal.
My own sense is, this is the first tremor of the earthquake that’s coming to the global financial system. And how the central banks and financial regulators treated the “Systemically Important Financial Institutions” that had exposure to MF Global—to the detriment of the ordinary, blameless customer who got royally ripped [...]
• Money Creating Central Banks May Push Gold to New Nominal Record in 2012
Yes, gold will rise 20% next year like it did during the last 10 years. But if you are saying we will get the big payout this year, it’s not going to happen unless they unleash massive printing, and that will end the can kicking, which of course will end their program of gold purchases. So TPTB will do anything, even [...]
EXCLUSIVE He’s turning into Jon Corzine’s worst nightmare. And Terrence Duffy, CEO of CME Group. the Chicago-based commodities exchange, appears to be the most vocal critic during the seven-week scavenger hunt for the $1.2 billion in missing MF Global’s client funds. Duffy has made no bones that he thinks the money vanished because MF “broke rules.” “I’m here to tell the truth to the Congress,” Duffy told The Post exclusively.
When AP is printing stories like this, we’re headed over the falls
At the top of Tuesday’s agenda is finding a means to more fully integrate the eurozone’s disparate nations — ranging from powerful Germany to tiny Malta — both politically and financially. And the ministers must do it fast, without the delays caused by democratic niceties like referendums that have led many EU reforms to take years to implement.
Hanging the regulators [...]
As of milliseconds ago, one share of Bank of America stock is now $5.99, a level it has not seen since the apocalypse back in March 2009, and upon penetrating it, a huge volume surge followed as an avalanche of sell orders were activated. However, we are confident this will be temporary. According to largely amusing rumors, Bank of America will follow through with [...]
As markets convulsed in September 2008, Morgan Stanley (MS) Treasurer David Wong briefed the Federal Reserve on a “dark” scenario in which the U.S. firm would need at least $10 billion of emergency loans from the central bank.
It got 10 times darker by month’s end. Morgan Stanley borrowed $107.3 billion, the most of any bank, according to data compiled by Bloomberg News using information released in response to Freedom of [...]
By Nicholas Larkin and Pham-Duy Nguyen
May 16 (Bloomberg) — Sales of gold coins are on track for the best month in a year amid the worst commodities rout since 2008, a sign that bullion’s longest bull market in nine decades has further to run, if history is a guide.
The U.S. Mint sold 85,000 ounces of American Eagle coins since May 1 as theStandard & Poor’s GSCI Index [...]