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Scary 1929 market chart gains traction
Marketwatch ^

Posted on 02/12/2014 3:22:45 AM PST by Red in Blue PA

CHAPEL HILL, N.C. (MarketWatch) — There are eerie parallels between the stock market’s recent behavior and how it behaved right before the 1929 crash.

That at least is the conclusion reached by a frightening chart that has been making the rounds on Wall Street. The chart superimposes the market’s recent performance on top of a plot of its gyrations in 1928 and 1929.

The picture isn’t pretty. And it’s not as easy as you might think to wriggle out from underneath the bearish significance of this chart.

(Excerpt) Read more at marketwatch.com ...


TOPICS:
KEYWORDS: stockmarket

1 posted on 02/12/2014 3:22:46 AM PST by Red in Blue PA
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To: Red in Blue PA

Eerie for sure, but you wont’ see the despair and panic on Wall Street this time like the last. Brokers won’t be jumping from windows. By that time they’ll have stolen all their clients’ remaining money and will be sunning themselves in Barbados or somewhere similar.


2 posted on 02/12/2014 3:28:54 AM PST by Gaffer (Comprehensive Immigration Reform is just another name for Comprehensive Capitulation)
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To: Gaffer

We also may see bailouts and/or additional free money (QE), soothing they did not have in 1929.


3 posted on 02/12/2014 3:31:37 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Red in Blue PA

The sky is falling, the sky is falling!!!


4 posted on 02/12/2014 3:34:42 AM PST by BradtotheBone (Record number of people on welfare. That's the State of the Union under Obama.)
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To: Red in Blue PA

SEEEELLLLLLLLLL!!!!!!!!!!!!!!!!!!!!!!!!!!

Joking aside — what if the scary chart really “gains traction” and everyone DOES sell based on it?

Can you say “self-fulfilling prophecy”? I thought you could! :-)


5 posted on 02/12/2014 3:34:51 AM PST by Nervous Tick (Without GOD, men get what they deserve.)
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To: Nervous Tick

Bingo!

If we get another selloff, look for it to continue as buyers stay away.


6 posted on 02/12/2014 3:38:01 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Red in Blue PA

Historically speaking...when the market fell in 1929....there was this significant fall two or three days prior, which most people felt was a “correction” (at least by standards of the day). The curious thing is that these who left in this correction-period....didn’t return, and just walked away with their profits. No one today....has ever identified these people or the reasoning why they never re-entered the market days later when lower prices would have normally interested people. They stayed away completely....throughout the fall.

By this chart....one would guess a fall by April-timeframe, and there should be people walking out over the next month with zero interest in returning to the market.


7 posted on 02/12/2014 3:42:08 AM PST by pepsionice
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To: Red in Blue PA

I think they will try that, but I think by that time it will be widely accepted the world over that their instant, out-of-thin-air QE isn’t worth anything, not backed by anything of substance, and just fiat money.


8 posted on 02/12/2014 3:44:24 AM PST by Gaffer (Comprehensive Immigration Reform is just another name for Comprehensive Capitulation)
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To: Red in Blue PA

>> look for [selloff] to continue as buyers stay away

*Maybe* they’ll stay away.

On the other hand, if you have a pile of cash you have to put to work... and the equity is throwing off a 2% to 5% dividend that you can’t match anywhere else... and the price is “corrected” enough to be attractive to you (whatever that might mean)...

These forces will push UP from the bottom and limit the downside. There IS a lot of cash out there, as we all know, and not all of it can be parked in a mattress.


9 posted on 02/12/2014 3:47:47 AM PST by Nervous Tick (Without GOD, men get what they deserve.)
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To: Red in Blue PA

I think if you look at a longer period, you could slide the current chart backwards in time and it would still parallel a portion of the older chart. That’s typical of a bull market chart.


10 posted on 02/12/2014 3:47:59 AM PST by Real Cynic No More (Border Fence Obamacare!)
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To: Red in Blue PA

If you track the market from 1920 to 2014 you’ll be amazed at what a teenie tiny blip the “Great Crash” was and how it doesn’t compare to the 1987 crash in constant dollars-— but the main visual takeaway is that overall the market has usn’t gone up, up, up over the long haul-—a good case for privatizing social security.


11 posted on 02/12/2014 3:51:14 AM PST by LS ('Castles made of sand, fall in the sea . . . eventually.' Hendrix)
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To: pepsionice

>> No one today....has ever identified these people or the reasoning why they never re-entered the market days later

???

VERY many of them were wiped out on highly leveraged positions. They didn’t have a pile of chips to get back in with — they were playing with Other People’s Money and it was gone.

Of course the ones that “walked away” by jumping out of a window weren’t able to get back in for that reason alone. ;-)


12 posted on 02/12/2014 3:52:38 AM PST by Nervous Tick (Without GOD, men get what they deserve.)
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To: Red in Blue PA

Blah, blah, blah.


13 posted on 02/12/2014 4:02:30 AM PST by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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To: Red in Blue PA
We also may see bailouts and/or additional free money (QE), soothing they did not have in 1929.

Not necessary. The extra money is still in the system and there's no place else for it to go.

14 posted on 02/12/2014 4:06:39 AM PST by palmer (don't feed the bears)
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To: Red in Blue PA

I tried to warn everyone... but...


15 posted on 02/12/2014 4:12:58 AM PST by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: Red in Blue PA

It’s not eerie. It’s mass delusion. It’s not scary. It’s mass stupidity.


16 posted on 02/12/2014 4:29:24 AM PST by I want the USA back (Media: completely irresponsible traitors. Complicit in the destruction of our country.)
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To: Red in Blue PA
A little eerie I guess, but if the trend follows we will be falling back to July 2012 levels ~13,000 in the next few weeks. That's only a ~13% drop, whereas in 1929 it was close to 50%. 13% loss is not a sign for the economy, but hardly the end of the world.
17 posted on 02/12/2014 4:30:08 AM PST by The_Victor (If all I want is a warm feeling, I should just wet my pants.)
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To: Red in Blue PA

The problem with this chart is one of proportion. A drop from 375 to 200 is a 46%+ drop and a drop from 16400 to, say, 13000 is a 20%+ drop. Big freakin diff.


18 posted on 02/12/2014 4:45:06 AM PST by RoosterRedux (The only true wisdom is in knowing you know nothing -- Socrates)
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To: Red in Blue PA
The major trend in the world today is the assimilation into the developed world of China and India. As these countries adopt technologies already developed for them, their economic growth will explode (actually, is exploding). And this creates customers for the products and services of the developed countries.

Look at these numbers and get your minds around the potential.

US pop. 313.9 mil - US GDP $15.68 tril.

China pop. 1.351 bil - China GDP $8.227 tril.

India pop. 1.237 bil - India GDP $1.842 tril

Furthermore, the success of its free markets will make it very difficult for China to cling to any Marxist ideas. The profit motive will run over Marx like a freight train over a skunk.

19 posted on 02/12/2014 4:56:42 AM PST by RoosterRedux (The only true wisdom is in knowing you know nothing -- Socrates)
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To: Red in Blue PA

I like to remember this comparative chart whenever I see such comparisons.

http://www.google.com/trends/explore#q=breast+enlargement,breast+reduction


20 posted on 02/12/2014 5:16:45 AM PST by yefragetuwrabrumuy (WoT News: Rantburg.com)
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To: BradtotheBone

“The sky is falling, the sky is falling!!!”

Sell Sky.


21 posted on 02/12/2014 5:44:09 AM PST by BBB333 (Q: Which is grammatically correct? Joe Biden IS or Joe Biden ARE an idiot?)
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To: Nervous Tick

what if the scary chart really “gains traction” and everyone DOES sell based on it?


But those with enough assets to affect the market don’t pay attention to this kind of crap, and most of the rest of us don’t either.


22 posted on 02/12/2014 5:56:32 AM PST by Atlas Sneezed ("Income Inequality?" Let's start with Washington DC vs. the rest of the nation!)
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To: Nervous Tick
and the equity is throwing off a 2% to 5% dividend

But if the stock market falls and we go into a deep recession or even a depression, those dividends will be cut. Dividends are only as good as the macroeconomic environment they exist in.
23 posted on 02/12/2014 6:07:02 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Red in Blue PA

Wow.

That chart is remarkably similar.

And we are (right now) about to find out, whether this time acts like the last time.

Like. Right now.


24 posted on 02/12/2014 6:12:21 AM PST by Cringing Negativism Network ( http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: pepsionice
The curious thing is that these who left in this correction-period....didn’t return, and just walked away with their profits. No one today....has ever identified these people or the reasoning why they never re-entered the market

If they haven't been identified we have no way of knowing that they walked away and didn't come back.

25 posted on 02/12/2014 6:44:48 AM PST by Darth Reardon (Is it any wonder I'm not the president?)
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To: Red in Blue PA

There was another similar chart floating around about 2 years ago that showed the 1929 drop compared to 2008 drop and then the following years matched closely and anticipation was the 32/33 corresponding drop would be coming up shortly - haven’t seen that one updated in a while....wonder why.


26 posted on 02/12/2014 7:04:11 AM PST by reed13k (For evil to triumph it is only necessary for good men to do nothings)
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To: Red in Blue PA

Matt Drudge Issues Warning: “Have an Exit Plan…”
http://www.thegatewaypundit.com/2014/01/matt-drudge-issues-warning-have-an-exit-plan/

Financial world shaken by 4 bankers’ apparent suicides in a week
http://rt.com/business/russell-investments-chief-economist-dead-564/

Elite Insider Predicted Massive Crash in 2012: “Very Large Probability… Around March 4, 2014”
http://www.shtfplan.com/headline-news/elite-insider-predicted-massive-crash-in-2012-very-large-probability-around-march-4-2014_02032014


27 posted on 02/12/2014 8:33:00 AM PST by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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