Market Crashes Follow A Surge And Illusion Of Recovery And Growth (accounting, real estate)

[openmike]

In spite of having to concede that we are experiencing moderate 4% growth there looms a cloud that
few want to consider as it strips one of "happy" and we rather park our mindsets on delusional outcomes in hope they lateral over to reality. The next cliff is expected in the month of September known as Tishri to some when by the 29th ( Elul) the market bottoms out as usual by the minute and second. I hope this one fails to fly as in 2008 the final bell refused to even ring!

[andywire]

America is the best house in the worst neighborhood. China's growth was unsustainable. Europe can't grow, and is making our immigration problems look insignificant. If you are referring to the latest dip/correction that we have seen in equities, why do you care so much about the freak show on Wallstreet? They certainly don't need any more of our help, or the help from the Fed.

[Dr. Money]

A big market crash generally doesn't happen when everyone is calling for it. In fact, most big moves occur when the "crowd" or "herd" is crowded on one side of the trade. If anything, the crowd is starting to gather on the negative side of things, and all of these financial pubs have started calling for big crashes. Generally the opposite happens. AAII sentiment survey is almost 40% negative now. Short-term volatility down and up yes, but wouldn't be surprised to see significant up action after that. Stock market does not always reflect underlying economy especially when US equities are viewed as one of the safer bets to park capital by the big boys. The biggest bubble is in the bond market, not the stock market. Personally, I made a great trade last two weeks with QID and RWM because I figured markets would take a hit to scare the weak hands out. Sold those after the big down action past week, and will look to get back in after more substantial up action. Always money to be made on one side of the trade or the other.

[lieqiang]

Originally Posted by openmike

The next cliff is expected in the month of September known as Tishri to some when by the 29th ( Elul) the market bottoms out as usual by the minute and second. I hope this one fails to fly as in 2008 the final bell refused to even ring!

So I'm curious what steps have you taken with your portfolio in anticipation?

In all the years of encountering doomsayers on internet forums I've not once managed to find one who 1) has any assets to invest or 2) can detail what they have done to make the most money with their wisdom of impending doom.

[2e1m5a]

Originally Posted by lieqiang

So I'm curious what steps have you taken with your portfolio in anticipation?

In all the years of encountering doomsayers on internet forums I've not once managed to find one who 1) has any assets to invest or 2) can detail what they have done to make the most money with their wisdom of impending doom.

Many doomsayers don't have anything to invest but there are many people who simply reject the financial system altogether and seek to acquire wealth that is more tangible-like land and real estate. Things that can have value outside of any financial system.

People like that also like predicting doom because they won't be as effected. I'm somewhere in between haha, but while I think our current financial system may eventually die there will always be something after.

[GeoffD]

Originally Posted by andywire

America is the best house in the worst neighborhood. China's growth was unsustainable. Europe can't grow, and is making our immigration problems look insignificant. If you are referring to the latest dip/correction that we have seen in equities, why do you care so much about the freak show on Wallstreet? They certainly don't need any more of our help, or the help from the Fed.

Unless we're talking interstellar travel, America is the best house in the only neighborhood.

China has seen significant wage inflation. In my little high tech universe, we went from paying software engineers in Shanghai $30K a decade ago to $80K now. As the country has become more affluent, they're less competitive. I work for a Korean company now. They just started offshoring to a new R&D center in Vietnam.

Europe has very well documented problems. The northern part has a rapidly aging and contracting population. Countries like France where government spending is more than 50% of GDP have a big problem maintaining the status quo in their social democracy. France's anti-immigrant vitriol blows away anything coming out of the mouth of Donald Trump.

I don't see that the United States has much in the way of an immigration problem. Immigration prevented us from having the Japan/Europe shrinking/aging population catastrophe. Unlike our permanent underclass that is about 50% African-American descendants of slavery, our current wave of immigrants is mostly tracking to the usual melting pot 'Murican Dream. Look at the demographics of the freshman class at Harvard or MIT or Stanford or UC Berkeley. It's just about 50% Asian and most are first or 2nd generation. Those immigrants are going to drive our economy in the 21st century. For the most part, the Hispanic wave is also making good progress marching towards the middle class. I'd prefer to see an immigration bias towards smart, healthy, young people but what we have now isn't so awful.

I'm 100% bought in to the long term impact of automation and globalization. The rich have the capital that buys the automation and the corporations they own as stockholders shift labor to the low cost parts of the world. If you think the rich will continue to get richer due to the leverage of capital invested in automation on labor costs (and the impact on bottom line profits), I see nothing but a bright long-term future for all the US-listed multinationals. Because of accounting slight of hand where US corporations push anything they can away from the 36% United States federal corporate income tax, the market cap to GDP ratio looks frightening. It's now about 130% instead of the more historic 90-ish percent. The PE ratio is also quite high but I think that is factoring in the continued increase in profit from automation and globalization. If you just look at historic market cap to GDP and PE ratio charts, it looks like we're in a bubble and due for a nasty correction. I'm more optimistic than that but still concerned that more Europe and Asia catastrophes will continue to make the US stock market unstable. I'm in the market for the long term with my portfolio so I'm less worried. I manage my mother's financial affairs and I'm spending her brokerage account to pay for her assisted living. I'm much more conservative with that account.