Fear of 'Catastrophic' Crash Rising Despite Bull Market

CNBC ^ | 02/18/2011 | CNBC

[The Magical Mischief Tour]

In an unprecedented move, the number of investors fearing a catastrophic stock market crash is rising even with the stock market at 2 ½ year highs.

The unusual dislocation comes from two distinct reasons: a lack of trust in the U.S. financial markets following the so-called Flash Crash last May and the collapse of Lehman Brothers in 2007.

This means the Flash Crash Advisory Commission that met on Friday has a long way to go in restoring confidence to the point that will bring the individual investor back into a market still ruled by high frequency trading, exchange-traded funds and leveraged hedge funds.

The Yale School of Management since 1989 has asked wealthy individual investors monthly to give the “probability of a catastrophic stock market crash in the U.S. in the next six months.”

[proxy_user]

Well, if they have done well for a decade, it’s too late, isn’t it? Once everyone is in, there is no where to go but down.

I always have bought the stocks that ‘no one wants’, selectively of course, and made plenty of money doing it.

[proxy_user]

I have always told everyone, if they would just blow a horn when the market hits a top or a bottom, it would be much easier for everyone.

[SE Mom]

Didn’t want you to miss this, ping!

[doosee]

The main reason for the market advance is that the US elected a GOP house which controls spending. The House is much more pro-business and anti-tax. The market started going up before the Nov elections when the polls showed the Dems would lose control. Markets will continue up unless war breaks out in the Middle East with Israel. That is the main wildcard.

[RC one]

It’s hard to know what to believe. You have to pick your position and stick with it for better or worse. I’m going to pay off the remainder of my mortgage. It makes sense to me based on what I believe.

[El Cid]

How can it be going up on such awful news? That alone makes it suspect. I think it is a big scam.

When the banks give you zero interest, and risk of failure/closure is real.
When Municipal bonds are 'guaranteed' by a bankrupt municipality.
When Gold has already gone up 500% (5X) in the last few years.
When the mad hatters in the Federal Government are cranking up the printing presses at the mint to fund their insanity.
When Real Estate still has some serious risks - because the bad loans still haven't been flushed out...

Its not all that easy to figure out where to park your money.
Buying a portion of some Companies (i.e., Stock) isn't all that unreasonable. Yes its risky (given the inherent poor health of the economy) - but I don't see it as being riskier than the other options.
Canned goods and Ammo I guess ... but how much of that are you going to 'invest' in?

[SatinDoll]

There is a lot of things you can do with extra money.

Buy storable food and other commodities that will go up in price sharply if there is a panic.

Many ranchers are culling their herds as the price of grain and hay is rising. Now is the time to stock up on meat, chicken and fish, even buy a freezer if you have to store it all.

Something to consider are other items that might soar in price or even disappear from store shelves due to the high price of shipping (gasoline prices). Ammunition, liquor (if you don't have guns or don't drink you can trade it for something you need), matches, razor blades, most paper products like toilet paper and cleaning supplies.

I did something I thought I would never do: bought fake candles that operate on batteries, then bought a huge amount of batteries at Costco! And bought lots and lots of charcoal to use for cooking. All because I don't know if there will be rolling blackouts due to shortages in the future.

[thecabal]

It’s from the “Quantitative Easing” AKA Helicopter Ben dispensing trillions of dollars from his ass. Not to mention that the vast majority of the stock market volume is algorithmic trading, not from humans.

[cbkaty]

Well, if they have done well for a decade, it’s too late, isn’t it? Once everyone is in, there is no where to go but down.

I recall people saying exactly that...when gold was @ $300 an ounce...and silver @ $8.00.

[bert]

Because there are other sources of inforation besides chicken little

[screaminsunshine]

Well I got some silver a while back at 12.50 and now it is over 30. It has not even been 2 years.

[grobdriver]

Where do I put my money ping.

[El Cid]

I agree that silver and gold are good - but with their strong run you have to be leery about jumping in now (Silver at $12.50/ounce was an astute buy).
You can certainly make the argument that they'll continue to climb as we turn our currency into Zimbabwe dollars -- but you need to be very leery in chasing an investment that has already gone up 300%-500% in a few years.

[screaminsunshine]

I know, I am selling it. I think cash will soon become rare. But I am just holding the cash for a while.

[cbkaty]

but you need to be very leery in chasing an investment that has already gone up 300%-500% in a few years

Make that thousands of years......and the insurance it provides hasn't changed. Those that own it understand...those that don't, never will...

[rbg81]

Fear a crash when everyone is bullish.

[poindexter]

How can it be going up on such awful news?

The market climbs a Wall of Worry.

[jafojeffsurf]

Make that 3000 if they do not lock down the market the rest of the day and most likely a combined fall of 5000. But hey I am no expert just do not believe what I see and hear nothing of substance to support its current position. Only a few people I know invest more than their 401k now.

[Marty62]

Is it possible for Turbo Tim to prop up the market, while real investors are taking the money and running. We know this admin thinks taxpayers money is to be used for their personal political scams. Can they get by with such behaviour.