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When can we call it a stock market "crash"?

Discussion in 'Coffee Shack (Daily News/Economy)' started by <SLV>, Feb 5, 2018.



  1. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    ....aaaaaand the Dow is up almost 100 pts and gold and silver are headed down. Just like clockwork!
     
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  2. FthePolice

    FthePolice Seeker

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    Well, we had some early morning gains but now they are evaporating as I type.
     
  3. FunnyMoney

    FunnyMoney Silver Member Silver Miner

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    In the 2008 crash, silver went from 20 to 10 (although if you buy physical you were luck to get it at 12), and gold went from 1000 to 700.
    I called the global market recovery at the metals market recovery with threads on GIM1. Those recoveries started with options expiration in Oct and then with a retest of the bottom, again on options expiration in Nov.

    Losing 50% doesn't just apply to stocks. However, gold and silver still weighed the same despite the drops. Honest money works differently. But we don't live in an honest money environment, so there's really no safe harbor other than food and things you will always need. This is the way it works in a dishonest environment. This is why GG (from the GIM1 days) constantly posted about his increasing hoard of TP!


    Rather the rules are corrupted, they are meant for US not for THEM. Dishonest rules allow them this flexibility. This is why gold and silver were specifically mentioned as the ONLY money in the original constitution.

    I hate to say this, but "maybe this time will be different." Maybe now that it's clear we actually don't have the gold in ft knox and China really is sucking it in, not just into the PBOC but also their workers are using it as savings - 1200 and 15 are the floors. I'm closely watching the RMB, if the RMB gets stronger, as it has been, this allows PMs to go down in dollar terms but remain flat in RMB.
     
  4. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Added 550 "points". I still say we are going down more this week.
     
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  5. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Just a theory... what if the "flash crash" of the past few days was orchestrated so that corporations could buy back company stock at a discounted price with repatriated money following the passage of the tax law? Wouldn't that explain some of the upward surging?
     
  6. ZZZZZ

    ZZZZZ Seeker

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    Sure, that might be part of it.

    Bu as posted earlier, I think the bulk of it is financial "SkyNet" gone wild.
    .
    .
     
  7. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    -357 and falling. Can anyone say 'unstable'?
     
  8. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Called it. Actually, gold is down more than $15 since Monday.

    Wouldn't be surprised if the market ends the week lower than Monday's close.

     
  9. FunnyMoney

    FunnyMoney Silver Member Silver Miner

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    The CONgress has now stated that all our problems are now solved. All those issues that had no clear solution for the last few years suddenly have simple fixes now.

    I think we're just waiting on the house to vote and the party will resume.
     
  10. ZZZZZ

    ZZZZZ Seeker

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    Can anyone say "crash in progress"?
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  11. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    I don't know if the party will be starting back up. I think we are in for a hangover:

    https://www.cnbc.com/2018/02/08/dic...nge-is-underway-in-the-financial-markets.html

    It starts with money and rates.

    There is a hot debate among the bulls and the bears as to whether the recent change in equity valuations represents technical market factors that will be quickly reversed or a fundamental change that will take some time to play out.

    I am of the view that there is a meaningful fundamental change underway.


    It is not economically driven it is financially motivated. Simply stated, in the decade following the financial crisis, money availability was increased through quantitative easing and the cost of these new funds in real terms was negative. The financial crisis is now over and the aberrational financial values created by the manipulated market are ending.

    The
    Federal Reserve has put in place two new policies. The first has lowered the annual growth in the money supply (M2 SA) to 4 percent from what was touching 8 percent, 15 months ago, and over 10 percent, six years ago. The second is progressively increasing the cost of funds. The real cost of money, as measured by comparing the Federal Funds rate to the Consumer Price Index, has been negative 93 percent of the time since 2010.

    Restating this point, for a decade there has been a great deal of money around at real prices below zero. This era is over. Anyone who does not understand that this is a significant fundamental change needs to take a thoughtful look at these numbers and think about what they mean.

    What make this change more significant is that it is occurring a time when the demand for money is rising. First, the United States government is going to push its $20 trillion debt much higher. Second, the probability of accelerating growth in the economy with moderately higher inflation indicates that the private sector needs more funds. Third, the resumption of economic growth in the Euro zone indicates more money is needed there to maintain forward momentum.

    Increased demand for funds at a time when the growth in supply is easing will drive money costs higher and financial values lower. This is about as fundamental as it gets.

    But let's dig deeper. The scoring mechanism in the financial sector is the dollar. If the value of the dollar changes, then the financial assets that it is measuring change. From the trough 10 years ago to the peak at the very end of 2016, the value of the dollar rose by an estimated 41 percent. From the peak in late 2016 to the present it has dropped by 11 percent.

    Moreover, while the Treasury Secretary of the United States
    has indicated that he wants a strong dollar, he has also indicated that the United States would not intervene in currency markets to support the dollar — i.e., he would allow this currency to drop further in value in the short run.

    Simply stated, if the scoring system drops in value the items being scored drop in value. A weaker dollar means lower financial assets values. The process is far more complex than being asserted here but the bottom line is that weak dollars buy fewer physical items and financial items must pay higher rates of return to offset the drop in the currency value.

    To argue that a shift in money availability; a shift in real interest rates; and a shift in the value of the dollar; have no fundamental impact is simply folly. A folly driven by a lack of understanding concerning how valuation works. The markets are undergoing a far more important change than a technical adjustment.

    Be very cautious as to how you invest your money at this time.


    Richard X. BoveEquity research analyst at the Vertical Group
     
  12. the_shootist

    the_shootist The war is here on our doorstep! Midas Member Site Supporter ++

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    -544 now. :2 thumbs up:
     
  13. ZZZZZ

    ZZZZZ Seeker

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    DJIA down 1033 yesterday.

    So much for today's "Dead Cat Bounce."

    DJIA was up 250, now down 125.

    The Fat Lady ain't singing just yet.
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    .
     
  14. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    At this time ??? Hell, always, and remember the stock market is rigged, by the major players, for the major players, we pee on's, should invest in a more solid commodity, wink, wink !!!
     
  15. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    Gold is holding steady. As this correction continues to unfold I expect gold to start rising as safe-haven money moves in.
     
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  16. ZZZZZ

    ZZZZZ Seeker

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    Stocks are down 12% from the highs. Gold should already be up $100. Something's wrong with this picture. I sure don't know what it is.
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  17. <SLV>

    <SLV> Gold Member Gold Chaser Site Supporter

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    The dollar is strengthening rapidly (deflation) so asset prices are falling. Gold (also an asset) is being supported from falling along with stocks because of safe-haven money moving into gold (demand). I expect that demand to increase. However, the long term picture (deflation) argues for the POG falling even further.
     
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  18. TAEZZAR

    TAEZZAR LADY JUSTICE ISNT BLIND, SHES JUST AFRAID TO WATCH Midas Member Site Supporter

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    I hope you are correct !!
     
  19. Silver

    Silver Gold Member Gold Chaser

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    Deflation is a hoax, there is a massive increase in the money supply, it is just held at the top by banks receiving interest by the FED for not lending. The new budget bill has a projected deficit of 1.2 trillion this fiscal year - the deficit is going to get bigger and bigger.
     
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