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Thread: Looks like a market correction.

  1. #1

    Looks like a market correction.

    Some one told me that the last week of July would be the start of a correction. I thought that it would be closer to October because of the a change of quantitative easing by the fed announced by Janet Yellen earlier in the year. So todays market plunge is caused by what ? The Argentina default ? Today's Chicago PMI tanking ? Portuguese Bank Espirito Santos posting a 3.6 billion euro loss ? WAR ? Maybe a combo of everything including the currency war now playing out.

    Maybe its just another dump in the pump and dump market cycle. idk.

    http://www.businessinsider.com/stock...t-crash-2014-7

    The other thing that this level of valuation has also often preceded is something much worse than a "minor correction" a crash. And there are other things that are happening now that have also preceded crashes.

    So I would not be surprised to see stocks fall ~50% from this level in the next few years. And, if that happens, you shouldn't be surprised either.

    http://www.businessinsider.com/chica...ly-2014-2014-7

    The Chicago purchasing managers index unexpectedly plunged to 52.6 in July from 62.6 in May.
    Economists were expecting the index to climb to 63.0.
    http://www.businessweek.com/news/201...-billion-euros

    Banco Espirito Santo SAs stock plunged by the most on record and the bonds slumped after it was ordered to raise capital following a 3.6 billion-euro ($4.8 billion) first-half net loss.

  2. #2
    Senior Member
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    Too many wars/disasters in the world lately. Your question should have been "Why market went so high and didn't crash many months earlier?"
    There are people who predict that market and dollar will crash very soon. For example, the economist James Rickards. See his interviews on youtube.

    As for QE, this is a nice term for printing money. Somehow, when government does this this is called QE, and when some private people try doing this this is called felony currency counterfeiting, basically the same thing. I couldn't find anybody who would support QE in any online communities of qualified people. Only dopes in US government think this is a great idea.

  3. #3
    I totally agree with you Jerry.

  4. #4
    I have some safe stocks that are doing good even the last 2 days, I have a REIT that hit a 5 year high 2 days ago and I was about to sell but it lost 50 cents in the last 2 days so I am going to wait it out again.
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  5. #5
    Goomba & Super Moderator tonyg's Avatar
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    I haven't been buying or selling and have no plan to do either anytime soon.

  6. #6
    It seems like everyone with any money is holding on to it. Retail spending is down in all sectors of the economy even with investments doing well. Walmart's report of declining profits for the last 6 quarters is like a canary in the coal mine as far as retail.

    Quantitative Easing continues until October at 45 billion a month which is chump change compared with the Federal Reserves open market committee giving banks 20 billion each day for the last 6 years. You have to wonder how they plan on paying this back even at zero interest. Currently 18 - 20 % of the federal budget is used to pay interest to, oddly enough, the banks.

    Then there is another problem in that 60% of all money paid out by the Fed is borrowed. Even if all social programs and military spending was cut the fed would still need to borrow to meet its obligations. To be balanced the fed would need to cut all obligations owed like social security, medicare, gov pensions, social programs, and all military spending and this is impossible, imo. Some time around 2020 about a quarter of the federal budget will be used to pay interest. At this point the system will need to change. That is why the banks are loading up on tangible assets instead of USD's as this is a good place to be when the USD is either revalued or replaced because of the derivatives that have the banks over leveraged, imo.

  7. #7
    I agree with you easyrider..

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