WANRING: The Stage Is Set For The 3rd Stock-Market Crash of The 21st Century
The next major wave of the economic collapse is rapidly approaching and time is running out!!!
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.
CLICK ON CHART TO ENLARGE
Positive net worth takes place when.….Investors have little money borrowed and plenty of cash in there brokerage accounts. (2003 & 2009)
Negative net worth takes place when.…Investors have little large amounts of money borrowed (on margin) and little cash in their brokerage accounts. (2000, 2007, 2011 & now)
The above chart reflects that only one other time in history has negative net worth been this low, which was the tech bubble back in 2000. The prior two times that negative net worth were this low was 2007 (50% S&P 500 decline) and 2011 (17% S&P 500 decline).
The above chart of Credit Balance/Net Worth shouldn’t be used as a market timing tool, yet it history holds true, it has reflected times when investors should load up the truck in stocks (Positive net worth was high at the 2003 & 2009 lows) and it did reflect times when investors should have lowered stock exposure (Negative net worth was low in 2000 & 2007).
I believe the top will be in when…. high yield funds, shoe box indicator (only available to members) and advance/declines show weakness in combination with the above net worth figures! Stay tuned to see if its different this time!
“Horrible” PMI, no problem; just add it to the list of macro data that has missed significantly in recent weeks. Bloomberg’s US Macro index has utterly collapse in recent weeks – now at its worst level in 7 months but apparently if good is good, bad is better, and totally shitty is absolutely awesome. It would appear the world of nominal equity index chasers is now fully cognizant that the reality of their lemming like herding is based on one simple thing (no matter how much they kick and scream and proclaim wisdom about earnings cycles, growth, margins, transformative energy, or new AAPL products) – and that is… Central Bank promises.
And just to timestamp this, both the closing print, or right around it, and the all time nominal intraday high, coincide.
If the Fed needed any ammo for tomorrow to hint that there is a time frame longer than infinite and that there is a size of imprudence larger than infinity, then they have it… of course, there is, once gain, very weak volume on this uptick (but like everything else, that doesn’t matter either.)
Presenting: The Housing Bubble 2.0 – Great job Bernanke & Co. You have succeeded at rolling up the housing, credit, bond, tech and equity bubbles all into one.
It was just seven short years ago that the prices at the epicenter of the housing bubble, Los Angeles, CA rose by 50% every six months as the nation experienced its first parabolic move higher in home prices courtesy of Alan Greenspan’s disastrous policies: a time when everyone knew intuitively the housing market was in an epic bubble, yet which nobody wanted to pop because there was just too much fun to be had chasing the bouncing ball, not to mention money. Well, courtesy of the real-time real estate pricing trackers at Altos Research, we now know that the very worst of the housing bubble is not only back, but it is at levels not seen since the days when a house in the Inland Empire was only a faint glimmer of the prototype for BitCoin.
The Gretsch building, an old guitar factory turned condo building in Williamsburg, just had a crazy week: Crain’s reports that three units sold in all-cash transactions, each one setting new highs on a per-square-foot basis. The units in questions were two adjacent two-bedrooms on the ninth floor, selling for $1.4 million and $1.5 million, and a larger two-bedroom on the 10th floor selling at $2.5 million — all at an average of $1,150 per square foot. “It needs to be cash, it needs to be over ask, and (the listing) will never see the light of day,” the broker had told all the buyers. According to Crain’s, Williamsburg condos are currently averaging $794 per square foot, with high-end condos like Northside Piers bringing in closer to $1,050 per foot. The broker who handled the Gretsch sales at 60 Broadway can’t seem to believe it herself: “It’s unbelievable what’s going on out there,” she told Crain’s. Our question is, can the high sales we’ve been seeing lately be a bubble based on low mortgage rates if the buyers are paying record-setting prices with all cash? 3 Condos Sold in Williamsburg at Record Prices [Crain’s]
Great job Bernanke & Co. You have succeeded at rolling up the housing, credit, bond, tech and equity bubbles all into one.
Watching the glorious unwind of all this unprecedented academic-created stupidity will be worth the hyperinflated price of admission alone.
— Steve Case (@SteveCase) April 30, 2013
PAUL B. FARRELL: The 3rd Stock-Market Crash of The 21st Century Is Coming And Mr. Market Will Soon Lose $10 Trillion of Your Money, Repeating 2008 And 2000. How Much Will You Lose This Time Around?
How much will you lose this time around? Four years ago, on March 30, 2009, our column headline announced:“6 reasons I’m calling a bottom and a new bull.”
The Dow fell from 14,164. Hit bottom at 6,547. And Wall Street lost over $10 trillion of America’s retirement market cap. You lost lots. But it’s back up more than 100% since. We forget.
Time for another crash? Oh yes. Remember: Investors Business Daily’s publisher, Bill O’Neil, wrote in his classic, “How to Make Money in Stocks”: “During the last 50 years, we have had 12 bull markets and 11 bear markets … The bull markets averaged going up about 100% and the bear markets, on the average, declined 25% to 30%.” And “the typical bull market lasted 3.75 years and the classic bear market lingered only nine months.”
Today’s bull is over four years old, in dangerous territory.
Yes, you are facing an aging bull. Ready for pasture. But Wall Street’s still gambling with your money. Remember, Wall Street casinos have already lost roughly $10 trillion twice this century. Twice. And soon Wall Street will do it again.
But exactly when? Here’s how to figure “exactly” when. In his classic, “Stocks for the Long Run,” economist Jeremy Siegel studied all the “big market moves” between 1801 and 2001. Two centuries of data. Conclusion: 75% of the time there’s no rational explanation for “big moves” in stock, not up, not down.
So stop asking, maybe some technician, quant or high-frequency trader can predict short-term swings. But the “big market moves?” Never.
So “exactly” when? America’s top experts are warning us — it’ll happen before year-end. That’s “exactly” when. Why? It’s obvious. By year-end 2013 our aging bull will be 4 ½ years old, well past Bill O’Neil’s “average” 3.75 years for a bear drop putting a bull out to pasture….
So any rational investor would have to conclude that Mr. Market — as Warren Buffett’s mentor Benjamin Graham called the stock market in his classic “The Intelligent Investor” — would know that a bear drop, a crash, meltdown, or something very painful is coming very soon. Indeed, could happen anytime, maybe even tomorrow, because this bull is old-old by Bill O’Neil’s basic calculations.
The World Is Hoarding Alternative Money As Almost All Major Countries Are Going Through The Classic Stages of Economic Collapse
Hoarding Alternative Money & Reforming Banks
Argentina is going through the classic stages of economic collapse. The government seized all pensions. They are destroying everything that gives the people incentive to be a society that emerges from the cooperation of everyone. When government turns against its own people, even as the USA is currently doing, you end up with deflation insofar as the economy collapses and wages are not available, while hoarding emerges as does barter. This is why we find hundreds of cities in the USA issuing their own local currency because there was not much available especially after the sovereign debt defaults and the closure of more than 3,000 banks. In Japan when its currency collapsed, it entered a dark age where there was no coin issued for about 600 years. Rice became the standard of money. It is more often than not, basic commodities that become the alternative money supply. Currently, we are starting to see the very same patterns emerge in Argentina….
BREAKING – Euro Unemployment Just Hit A Brand New Record High And The Jobs Outlook Just Got a Whole Lot Worse In U.S. – No Way This Can Go On, Something Catastrophic Is About To Happen!!
This is a devastating chart.
Eurozone unemployment hits a brand new high of 12.1%.
Click the chart to enlarge.
What else can you say but that this is a total disaster.
From the report:
Eurostat estimates that 26.521 million men and women in the EU27, of whom 19.211 million were in the euro area, were unemployed in March 2013. Compared with February 2013, the number of persons unemployed increased by 69 000 in the EU27 and by 62 000 in the euro area. Compared with March 2012, unemployment rose by 1.814 million in the EU27 and by 1.723 million in the euro area.
Among the Member States, the lowest unemployment rates were recorded in Austria (4.7%), Germany (5.4%) and Luxembourg (5.7%), and the highest in Greece (27.2% in January), Spain (26.7%) and Portugal (17.5%).
The Jobs Outlook Just Got a Whole Lot Worse In U.S.
Weak corporate top-line growth is likely to spell an equally troubled bottom line for the 11.7 million unemployed.
Quarterly earnings thus far have shown the typical strong level of profit beats, with just more than two of three companies in theStandard & Poor’s 500 exceeding Wall Street expectations.
But when it comes to actual sales growth, the results have been just north of dismal.
A mere 38 percent of the 271 S&P 500 companies that had reported through Friday topped revenue estimates, with the aggregate figure actually showing a sales decline of 1.45 percent, according to Zacks Investment Research.
Such weak profit growth generally equates with low hiring.
“The loss of momentum in the U.S. economy has been palpable, but what looks to be a soft patch in yet another 2 percent year for real economic growth now has the potential to morph into something more painful,” RBC Capital Markets economists Tom Porcelli and Jacob Oubina said in a report.
HUGE MISS: CHICAGO PMI SINKS TO 49.0 (Est. 52.5)
The April Chicago PMI report is out.
The headline index fell to 49.0, defying economists’ expectations for a tick up to 52.5 from March’s 52.4 reading.
Any number below 50 on the index indicates contraction, so today’s data suggests that manufacturing activity in the Midwest unexpectedly contracted in April.
The production sub-component fell to 49.9 from last month’s 51.8 reading. The employment sub-component fell to 48.7 from…
- European Unemployment Sets Another Record
- France back in hedge funds’ sights as economy stutters
- Report: County’s unmet pension obligations over $1 billion (Riverside)
- Spain’s economy shrinks for seventh straight quarter
- Gold Rush From Dubai to Turkey Saps Supply as Premiums Jump
- Slovenia Bank Rescue Costing 20% of GDP Means No Escaping EU Aid
20 Signs That The Next Great Economic Depression Has Already Started In Europe – it just hasn’t reached the United States yet.
The next Great Depression is already happening – it just hasn’t reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don’t get it. All the time I have people ask me when the “economic collapse” is going to happen. Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s. Pay close attention to what is happening over there, because it is coming here too. You see, the truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. We have gone “all in” on kicking the can down the road even though it means destroying the future of America. But the alternative scares the living daylights out of our politicians. When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well.
The following are 20 signs that the next Great Depression has already started in Europe…
#2 Unemployment in the eurozone as a whole is sitting at an all-time record of 12 percent.
#3 Two years ago, Portugal’s unemployment rate was about 12 percent. Today, it is about 17 percent.
#4 The unemployment rate in Spain has set a new all-time record of 27 percent. Even during the Great Depression of the 1930s the United States never had unemployment that high.
#5 The unemployment rate among those under the age of 25 in Spain is an astounding 57.2 percent.
#6 The unemployment rate in Greece has set a new all-time record of27.2 percent. Even during the Great Depression of the 1930s the United States never had unemployment that high.
#7 The unemployment rate among those under the age of 25 in Greece is a whopping 59.3 percent.
We are about to get an epic deluge of economic releases from around the world over the next three days, and we should learn a ton about the current state of the global economy.
It all starts tonight with South Korean exports at 8 PM ET. This data release is referred to as the “economic canary in the coal mine” because South Korea sends a lot of its exports to China, the health of which is critical to the global economy.
Following that is the official China manufacturing PMI (Purchasing Managers Index), out at 9 PM ET. All eyes will be on this release following a lackluster set of first-quarter economic data published a few weeks ago and the recent collapse in the commodity complex, which many ascribe to fears over Chinese growth.
Economists expect the index to tick down to 50.7 from 50.9 in March. Any reading above 50 on the PMIs indicates expansion, so 50.7 would signal continued, but slowing growth in Chinese manufacturing.
Overnight, we will also get the latest manufacturing PMI readings from Japan, Russia, Indonesia, Ireland, the Netherlands, the U.K., and Australia.
Then, Wednesday morning, we get a ton of new data on the U.S. economy.
At 8:15 AM ET, ADP releases its monthly employment report, which will foreshadow the bigger nonfarm payrolls release on Friday. Economists expect the ADP report to reveal that 150,000 private payrolls were created in the U.S. economy in April after reporting 158,000 new jobs in March.
At 8:58 AM, Markit releases U.S. manufacturing PMI. Economists expect the index to fall to 52.0 from last month’s 54.0 reading, indicating a slowdown in the pace of growth in American manufacturing in April.
At 10 AM, the ISM Manufacturing index is released. It’s expected to fall to 50.6 from 51.3, confirming the results from the Markit PMI report.
Also out at 10 are data on March construction spending. Economists predict spending on construction slowed to 0.6% in March after 1.2% growth in February.