Skip to comments.Why Stocks Could Fall by 50 Percent
Posted on 08/01/2014 7:10:26 AM PDT by SeekAndFind
After meandering higher for most of the year, the stock market is now sputtering.
That's triggering chatter about a minor "correction," which many people believe is long overdue.
And maybe that's what we're at the start of a minor "correction." Or maybe this is just a blip and the brilliant and prudent Jeremy Grantham is right that we're on the cusp of a new bubble that will take the S&P 500 up another 10 percent to 15 percent over the next year to 2,250. (As a stockholder, I sure hope so!) Or maybe we'll get botha minor "correction" and a new bubble spike. Or maybe we're just in the middle years of a fantastic bull market.
I don't know. (Neither does anyone else, by the way.) I'm also not predicting a crash.
One thing I do know, though, is that stocks are extremely expensive on every valid historical measure I know of. In the past, this level of overvaluation has presaged poor long-term returns. So I'm not expecting my retirement account to do well from this level over the next 7-10 years.
(Excerpt) Read more at slate.com ...
For the life of me I have no idea why:
A) CNBC puts him on the air given his past
B) How anyone takes him seriously
Because yesterday’s events proved that the tide is turning against the Chamber of Commerce and in the future they are unlikely to be able to just march up K Street and buy whatever they want.
THAT did not sit well on Wall Street apparently.
Why is market up from 6547 after 2008?
Fed has been printing dollars. Once created those dollars have to flow someplace, and stocks have been where they went.
Now Fed is talking about slowing the printing, and stocks are correcting to reflect the decreased flow.
HOWEVER, US GOVERNMENT HAS LOST ALL CONTROL OF SPENDING!
Notice, even the far right has stopped any talk of a balanced budget! The bottom line is that not enough dollars exist to cover all of the entitlements.
THOSE ON FIXED INCOMES, AND LOWER TO MIDDLE CLASS WILL GET HURT THE MOST! Inflation will eat up the government handouts. But it is beyond me why they continue to believe the democrat lies and vote them in.
Wrong. Since 2009, by a 5-to-1 margin inflows have gone to bonds over stocks. Why? The Fed has been keeping the bond markets afloat with their asset purchases. The worst thing that could happen to the bond markets (and the financial markets in general) is a failed Treasury auction. As the deficit declines (and it has been), the asset purchases have slowed... they've simply been monetizing our debt and making sure there is a market for new government issues.
I think Blodgett may be right.
Just look at his track record: the guy has predicted all fourteen of the last two bear markets.
Life on entitlements (plus whatever is gleaned under the table) apparently is now sufficient for a good proportion of Americans. Obviously that’s a sign that our society has deteriorated significantly.
I’m actually old enough to remember when being “on the dole” was considered a bad thing by most folks.
Um, excuse me.
Just who and what is the "far right?"
>> Inflation will eat up the government handouts.
That’s why they cannot allow inflation to happen.
Look instead for a “one time” (heh heh, yeah right) wealth tax that will simply confiscate 10 to 12 per cent of household and corporate wealth.
Great ... I hope we don’t have a replay of 2000-2001 when we all saw the signs of a stock market crash coming at the end of Clinton’s presidency and into the beginning of W’s. W got the blame. If the market crashes, I hope it happens before the next election so blame will fall where it should.
Doesn’t the Federal Reserve control the markets now? I’m sure, tucked away in some sleet secret Homeland Security bill, there is language that gives the Fed ultimate control over the markets.
>> Just who and what is the “far right?”
Put it this way: you and I (and most freepers) wrap the needle around the peg on the right-hand side of the scale.
“far right” on their scale is your karl roves, your john boners, your john mccains.
Hillary, Obama, Holder, Gina McCarthy, Lois Lerner are centrists. Well, ok, maybe SLIGHTLY left of center.
Clear as mud? :-)
Absolutely stupid article.
It may go up, it may go down, it may sputter, it may not do anything.
That about covers the range of possibilities so why bother to even comment?
Stupid and without any merit.
That's the only way the statists can cover a fraction of the $150 trillion in unfunded mandates.
If you think the Republicans are any better when it comes to printing money out of thin air, you're sadly mistaken.
Becasue Wal-Mart still accepts EBT cards and the banks still cash disability checks. Once that is no longer true it's time to find a secure, well armed place to hole up.
Too many people in the market looking at the EPS (Earnings Per Share) that has been rising. Of course, they fail to consider that one version of the equation has EPS rising because the number of shares has been going down due to corporate buybacks.
At some point, with further weakening of the economy (not that it doesn’t suck already), the cash won’t be there to prop up EPS from buybacks and the castle will start to crumble.
Even stores such as Wal-Mart, and other “low cost” retailers have mentioned the lack of traffic and sales. Shopping malls and other areas of mainstreet are feeling the crunch. But as long as the financial wizards can play their games and manipulate reality, things will continue. Every charade at some point comes to an end and it will be more than the 10-20% correction some talk about.
>>Just who and what is the “far right?”
Moving target! I think JFK would now be considered far right:)
His ask not speech would be considered far right today!
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