Today's violent correction in the stock market
Before today the single worst day in Wall Street history was September 29, 2008, when the Dow fell 777 points. (note: percentage-wise the worst day was the 500 point 1987 crash)
Now look at today's headlines.
This comes after the 666 point drop on Friday.
A diversified portfolio wasn't going to help you today.
All of the 2018 gains have been erased in the last few days.
These are huge, massive numbers, but I'm not all that excited because the stock market will still be up by huge, massive numbers after today.
Violent corrections tend to happen when all the bears have been chased out of the market, and no one is left but bulls.
That being said, there is still a reason to be worried.
That reason for worry is because we are on the back side of the credit cycle, and rising interest rates are historically the reason for bear markets in stocks.
The Fed’s plan, as announced in September, is to shrink the balances of Treasuries and MBS by up to $10 billion per month in October, November, and December 2017, then to accelerate the pace every three months. In January, February, and March 2018, the unwind would be capped at $20 billion a month; in Q2, at $30 billion a month; in Q3, at $40 billion a month; and starting in Q4, at $50 billion a month.
According to this plan, balances of Treasuries and MBS will shrink by $420 billion in 2018, by an additional $600 billion in 2019, and by an additional $600 billion every year going forward until the Fed deems the level of its holdings “normal.”
The Fed is shrinking it's balance sheet, while at the same time China has started selling it's dollar-based debt.
To think that this wouldn't have a negative effect on the markets would have been insane.
All that selling will dry up liquidity from every market. Plus, the ECB tapering means less buying from Europe and a falling dollar.
We probably won't see a crash, but we will almost surely be looking at a major bear market starting.
Comments
This Bloomberg headline shows how fucked Trump is
Trump Lauds ‘Tidal Wave of Good News’ While Dow Plummets
Braggadocios is bad optics
English Translation
English Translation: "Trump Fiddles While America Burns To The Ground".
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Bitcoin wasn't a safe haven today
14% fall today
So what was a safe haven today?
Bitcoin Wins Despite Losing 14% of It's Value
Heh... Crypto just embedded itself into the zeitgeist. Long live Bitcoin!
“Tactics without strategy is the noise before defeat.” ~ Sun Tzu
Agree. OT but DT is trying to spin the protests in UK as well.
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
When it comes to foreign institutions like the NHS,
Trump proves himself an utter dolt time and time again. They were marching in support of the NHS, you twit.
I'd add wanker, but I can't raise the enthusiasm.
Gëzuar!!
from a reasonably stable genius.
Such a pity,
and so soon after the SOTU too. Anybody with two brain cells to rub together could see that some kind of "correction" was coming. Was there no one on the President's staff smart enough to tell him, "Mr. President it might not be wise to take credit for record stock prices, just sayin'."
We wanted decent healthcare, a living wage and free college.
The Democrats gave us Biden and war instead.
Trump can't help himself
He was going to take credit for this financial bubble anyway.
Maybe he's surrounded himself with boot-lickers as well. He'd like that.
Well, now he's taken ownership of a very, late-stage credit-driven bull market that never trickled down to the workers in the Rust Belt.
His act is going to wear very thin, very fast.
BTW, TOP says it's all Trump's fault. No mention of credit or business cycles.
They never were that strong on economics over there,
not that we didn't try.
We wanted decent healthcare, a living wage and free college.
The Democrats gave us Biden and war instead.
Delusional much?
Obama did his best to create a stable, prosperous economy during his 8 years of stewardship.
Just don't mention the millions of homes that people lost and income inequality went way up during his stewardship. SMDH!
And then said he doesn't brag
" In the beginning, the universe was created. This has made a lot of people very angry, and is generally considered to have been a bad move. -- Douglas Adams, The Hitch Hiker's Guide to the Galaxy "
666 point drop on Friday
-- Christian Scriptures, Revelation 13:18 (KJV) source
I apologize, but it was just too tempting!
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Some right-wing preacher is writing a end time sermon
With this 666 drop for next Sunday. Prophecy!!!
Marilyn
"Make dirt, not war." eyo
Hail Satan!
This shit is bananas.
Satan
"Greaves, paging Reverend Lucien Greaves....."
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
I prefer the Rick and Morty version
The ruling classes need an extra party to make the rest of us feel as if we participate in democracy. That's what the Democrats are for. They make the US more durable than the Soviet Union was.
Yeah you'd think --
that the Dropoff of the Beast would matter.
next headline:
The ruling classes need an extra party to make the rest of us feel as if we participate in democracy. That's what the Democrats are for. They make the US more durable than the Soviet Union was.
the ol
the old saying is "buy when there's blood running in the streets"
Then good chance we might be playing this one tonight
I remembering driving in high school and hearing this on a radio station when it came out and getting goosebumps. Probably had something to do my mother converting to a Born Again around the same time, while I was deep in the throes of heavy metal fandom. Man, Maiden could really play, and were influenced by cool rock bands like Thin Lizzy and punk rock.
Sorry to say, but if the news gets worse I would find it difficult to have pity watching some predatory stockbroker assholes jumping from windows onto Wall St.
"The business model of Wall St is Fraud."
Bernie Sanders
I'll always love him just for saying that alone, during a major televised, presidential-year debate.
"If I should ever die, God forbid, let this be my epitaph:
THE ONLY PROOF HE NEEDED
FOR THE EXISTENCE OF GOD
WAS MUSIC"
- Kurt Vonnegut
I'm hoping for 666-point declines
for the next 666 days. Wouldn't it be fun if they were genuinely spooked?
The ruling classes need an extra party to make the rest of us feel as if we participate in democracy. That's what the Democrats are for. They make the US more durable than the Soviet Union was.
The market needs to do its level best
to tamp down any compensation to the labor market. All the talk about increases in wages must be countered.
More Good News!
Posted six hours ago and updates 24 minutes ago:
https://www.cnbc.com/2018/02/05/bofa-analyst-says-buy-the-weakness-in-we...
And GE too!
https://wolfstreet.com/2018/02/05/whats-the-chance-of-iconic-ge-going-ba...
Buy! Buy! Buy!
"They'll say we're disturbing the peace, but there is no peace. What really bothers them is that we are disturbing the war." Howard Zinn
Those brilliant guys in corporate board rooms
have spent a decade of massive profits (that were taken directly from workers) on buying their own stocks.
It would be a enormously bad investment if a long bear market in stocks were to start now.
In fact, it would look a lot like the final failure of capitalism.
Bookies Super Bowl loss.
I think the bookies are having to sell off to pay their Eagles Super Bowl betters.
Mike Taylor
No doubt they'll go suck off the bronze bull for good luck.
It worked for them in 2008, apparently. Assholes. Listen to this fucking porky whine about his workers.
[video:https://www.youtube.com/watch?v=_P7bfE6UNz8]
Modern education is little more than toeing the line for the capitalist pigs.
Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.
Impending collapse in the auto industry loans?
This fellow claims so...and presents some pretty compelling evidence (12 min)
https://www.youtube.com/watch?v=b-9hX3H_9qI
The big corps still have not gotten their tax bonus yet. Don't you reckon they plow those returns right back into the market to drive up their stock price? If I was a market gambler, I would hold (at least for a few more months).
Greenspan said we were in a bubble last week and that may have led to this? (2 min)
https://www.youtube.com/watch?v=edxn_2ZCGs8
Faux business news says so...(5 min)
https://www.youtube.com/watch?v=Cqa8Mpgn_Hw
Thanks as always for your insights.
“Until justice rolls down like water and righteousness like a mighty stream.”
Greenspan
never got anything right.
I never knew that the term "Never Again" only pertained to
those born Jewish
"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"
Heard from Margaret Kimberley
Only the Beginning.
Like the crack that signals the start of the avalanche.
Lotsa knock on effects in the credit markets, housing, and derivatives still to come.
Not to mention the stock crash itself is far from over.
The current working assumption appears to be that our Shroedinger's Cat system is still alive. But what if we all suspect it's not, and the real problem is we just can't bring ourselves to open the box?
That's some weird immolation
With the XIV etf. We don't even move 10 percent in the Dow and the whole volatility etf blows up. Some bodies in a world of hurt.
@Song of the lark
The XIV etf apparently didn't tank until after hours,....which seems very strange since the VIX soared over 100% Monday. The XIV etf value is supposed to be inversely related ( a short position ) to the VIX. The speculators running that etf will likely be scrambling to do a reverse split of 1 for 10 very,...very soon