4th of July crash?

I

idrnkurmlkshk_IHB

New member
Now I am officially worried. The topic has been a concern for the past 30 years, but are "the chickens really coming home this time?"





<strong>"Fortis expects a complete collapse of the US financial markets within a few weeks."



?The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks."



?This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that?s possible. It has lost all credibility,?-Barclays chief equity strategist Tim Bond</strong>



I know IR respects Mr. Mortgage....so now I'm worried.



<strong>http://mrmortgage.ml-implode.com/2008/06/28/what-do-fleck-fortis-rbs-and-barclays-have-in-common/</strong>
 
awgee,



How bad will it be? I understand that no one really knows the answer to this, but will the rest of the world be hurting more?



If not, where do we go? What can we do? I'm seriously getting more and more worried because although I am extremely fiscally responsible, I still fall into the middle class. And from what I keep hearing, the middle class will be destroyed if the dollar collapses.



To an extreme point, I want to know if Americans will flee the 'USA for Asia and Europe?



Please tell me I'm worrying too much.
 
It is only going to get worse. Americans won't be able to go to europe, can't afford it. Think of it like an imprisonment, we are all being punished for our irresponsible ways.
 
Frankly, I blame mlkshk for my sudden random desire to put on some Warren Zevon. <em>"Send lawyers, guns, and money. Lord, get me out of this."</em>
 
I blame him/her for my personal bank run this afternoon. Tomorrow I clean out my local Costco of bottled water and durables. Thursday I move all my retirement assets to cash. Let the panic begin!
 
<img src="http://images.icanhascheezburger.com/completestore/2008/7/1/idrkurmlkshk128594519053312947.jpg" alt="" />
 
[quote author="idrnkurmlkshk" date=1214971906]awgee,



How bad will it be?</blockquote>
I dunno.





[quote author="idrnkurmlkshk" date=1214971906]]I understand that no one really knows the answer to this, but will the rest of the world be hurting more? </blockquote>
I dunno.



[quote author="idrnkurmlkshk" date=1214971906]]If not, where do we go?</blockquote>
I dunno.

[quote author="idrnkurmlkshk" date=1214971906]

What can we do?</blockquote>
Buy gold?



[quote author="idrnkurmlkshk" date=1214971906]I'm seriously getting more and more worried because although I am extremely fiscally responsible, I still fall into the middle class. And from what I keep hearing, the middle class will be destroyed if the dollar collapses.



To an extreme point, I want to know if Americans will flee the 'USA for Asia and Europe?



Please tell me I'm worrying too much.</blockquote>
Why would Asia or Europe be any better? You are worrying too much. Worry will not help you. Be prepared. There is always a bull market somewhere. And there is lots of money to be made in a bear market. But then, I am an eternal optimist.
 
[quote author="gwailo168" date=1215051015]I have to move to Asia? I guess I need to go buy some rosetta stone CDs



Ni Hao Ma? Wo hen hao, ni ne?

hahahaha



LOL@theLOLcat</blockquote>


Zai jian, best customer. Zai jian.
 
[quote author="Rocker" date=1215047837]Actually, the 4th of July the stock market is closed.</blockquote><strong>THE</strong> stock market? Actually, only the US stock markets will be closed.
 
[quote author="awgee" date=1215055514][quote author="Rocker" date=1215047837]Actually, the 4th of July the stock market is closed.</blockquote><strong>THE</strong> stock market? Actually, only the US stock markets will be closed.</blockquote>


Still, New York is the capital of the capital, the day that international markets in group ignore what's happening in New York, we'll have much bigger problems as a country.



Where was the crash?!?



I think that stocks are cheap on a P/E basis, is a good idea to start a dollar averaging fund, buying every month a fixed amount of dollars of SPY for a conservative investment.
 
<blockquote>I think that stocks are cheap on a P/E basis, is a good idea to start a dollar averaging fund, buying every month a fixed amount of dollars of SPY for a conservative investment. </blockquote>
Exactly what we are doing.
 
Not that I'm necessarily advocating doing this, but if one believes in the long-term prospects of the S&P;500, why not dollar cost average SSO instead of SPY?
 
i always think of low P/E's in two ways assuming whether you believe the market has gotten either P or E right. at the moment i'm more in the camp that the reason the mkt is pushing down prices is because they know something about where earnings are headed. short interest ratio has been a fairly predictor in the long run and we are seeing record levels of shorting.



here's something interesting i saw the other day...



the long term ratio of household net worth to disposable income is 4.75. that ratio has been fairly consistent for decades until the fed decided to accommodate the growing stock bubble of the late 90s and then the recent housing bubble. at the end of 1q08 that ratio was 5.68. if one assumes that incomes continue to grow at their recent pace (which isn't all that good), household net worth would have to fall $4.4 trillion for the relationship to return to normal about 2 yrs from now.



much of household wealth is of course tied to home values. another 7% drop in RE would take household net worth down $1.6 trillion. the other major component of wealth is equities whether through direct holdings, mutual funds, pensions, and retirement accts. it would require another 15% decline in equity prices to lower household wealth the remaining $2.8 trillion.



pretty staggering...
 
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