MrJohnRoss' Account Talk

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Whenever Margin Debt Goes Over 2.25% of GDP, the Stock Market Always Crashes

"What do 1929, 2000 and 2007 all have in common? Those were all years in which we saw a dramatic spike in margin debt. In all three instances, investors became highly leveraged in order to "take advantage" of a soaring stock market. But of course we all know what happened each time. The spike in margin debt was rapidly followed by a horrifying stock market crash. Well guess what? It is happening again..."
 
Good info, but with their website domain being called ... theeconomiccollapseblog.com - it sounds very biased. As you may have seen, I have been warning of the 1987 chart comparison, but their whole business is based on the economy collapsing?
 
Hi! I think that the economy collapsing and market spiraling downward is a real possibility and that chance increases as we continue to increase our national debt with no end in sight, plus continue with high unemployement, and a snail-paced slow recovery ---but I'm sure no one knows when the bottom is going to fall out... at least not without paying attention to the market indicators and using our heads to assess what is happening. Any way you look at it---It feels like a big crap shoot!


It would appear that the market is highly affected by QE and believe that because any little whisper of it being decreased or ended causes the market to react dramatically and I understand that in May when Bernanke last spoke it had a world wide effect. That being said, we are still in a bull market. Nonetheless, I am playing conservatively as I am just a little chicken that wants to get some money playing a tug-o-war game with a big crazy Bull ---hope I and we all don't get stomped too badly and that we all pull out in time!! :)
 
MrJohnRoss said:
If the same statistics were presented by NBC News or the WSJ, would they make it seem more plausible?
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Maybe, although the report would probably be dismissed by the herd.

But that site reporting bad news is like Birchtree saying he's bullish. :)
 
Am I reading CNN correctly? The market just went down because the Fed is giving no indication of stopping QE. But wasn't QE the reason why the market was being propped up in the first place? Does anything make sense anymore? Glad I'm looking at this from the sidelines atm, lol, cause I'm confused.
 
sniper said:
Am I reading CNN correctly? The market just went down because the Fed is giving no indication of stopping QE. But wasn't QE the reason why the market was being propped up in the first place? Does anything make sense anymore? Glad I'm looking at this from the sidelines atm, lol, cause I'm confused.
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Wish I was...
 
sniper said:
Am I reading CNN correctly? The market just went down because the Fed is giving no indication of stopping QE. But wasn't QE the reason why the market was being propped up in the first place? Does anything make sense anymore? Glad I'm looking at this from the sidelines atm, lol, cause I'm confused.
Click to expand...
This morning Bob Pisani (sp?) on CNBC said the market is in a no win situation. We've rallied on QE. If it's taken a way, investors will want to sell. If they keep it going they are telling us that the economy is too weak to take it off life support. If we were going down into this meeting the market may have rallied, but they priced in the best case scenario and there isn't one.
 
tsptalk said:
Maybe, although the report would probably be dismissed by the herd.

But that site reporting bad news is like Birchtree saying he's bullish. :)
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BT should start his own site. He could call it "Bulltinky.com". Nothing but sunshine and good vibes, all the time. When the market goes up, he could crow away, and when it goes down, he could boast about getting more shares from all his dividend payers! How could he possibly lose?

Aye, jk, BT. We love ya.
 
sniper said:
Am I reading CNN correctly? The market just went down because the Fed is giving no indication of stopping QE. But wasn't QE the reason why the market was being propped up in the first place? Does anything make sense anymore? Glad I'm looking at this from the sidelines atm, lol, cause I'm confused.
Click to expand...

The Fed has a monkey on it's back, and I think it just took a leak down the back of Uncle Ben's shirt.
 
Looks like TMV was a good call. Up over 5% today as bonds are getting crushed. Wish I would have followed my instincts on this one. I do think bonds have further to fall, and believe rates will continue to rise...

TMV.png
 
MrJohnRoss said:
I do think bonds have further to fall, and believe rates will continue to rise...
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That's the way I'm reading it John. It's not what they "say". It's what the market is doing. And bonds are telling us rates are rising. At least for now. I can't imagine they'd let yields rise a ton, but who really knows.
 
coolhand said:
That's the way I'm reading it John. It's not what they "say". It's what the market is doing. And bonds are telling us rates are rising. At least for now. I can't imagine they'd let yields rise a ton, but who really knows.
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This is going to hurt the housing market, which has been dependent on low interest rate mortgages to fuel the housing boom. Home construction could be hurt heavily. And millions of adjustable rate mortgages are going to start ratcheting up, causing consumers to tighten their wallets. A rather vicious cycle.

This does not bode well for the U.S. gub'ment bond buying program, as pretty much all their bond purchases are going underwater. Soon they won't be able to afford the interest payments on all that debt.

This is just like if our family couldn't pay our bills, so we decided to get more credit cards to make more purchases, which caused us to go deeper in debt. It's insane to think that getting even more credit cards is a good solution, but that's what Uncle Ben and our fearless "leaders" have decided is good for our country. To hell with our children, or our children's children, let them worry about paying off all that debt. The important thing is to keep the Dow going higher so we all look good!
 
The housing market is going to be fine and even robust - this negative cycle will pass too and the economy will sing. The time is now to stay the course. Even amoeba has finally discovered the point of recognition of our 3 of 3 of 3 mega trend major wave 3. But we need G funders to balance the boat.
 
S&P major uptrend line that's been in place since Nov '12 has been decidedly broken. That's not a good sign. Still looking at 1555 (Fib 38%) as our first support level.

$spx.png
 
Birchtree said:
The housing market is going to be fine and even robust - this negative cycle will pass too and the economy will sing. The time is now to stay the course. Even amoeba has finally discovered the point of recognition of our 3 of 3 of 3 mega trend major wave 3. But we need G funders to balance the boat.
Click to expand...

You would be a good hedge fund manager.

"Come on in, the water's fine"

Just ignore the piranha... they don't bite very hard...
 
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