Recessions & Crashes: Memories & Lessons

Re: Recessions & Crashes: Memories & Lessons

Postby winston » Tue Nov 01, 2016 8:22 pm

Asset Bubbles From Stocks to Bonds to Iron Ore Threaten China

Investment binge fueled by easy credit and fiscal stimulus increases volatility; prices surge, then slide

By JOHN LYONS and SHEN HONG

Source: WSJ

http://www.wsj.com/articles/asset-bubbl ... 1477952654
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Mon Jan 16, 2017 11:42 am

How market crashes happen

One of the more compelling arguments I’ve heard about the current state of the markets is that they’re more or less micro efficient and macro inefficient.

The idea is that it’s becoming extremely difficult to pick securities, but the market as a whole can still become unhinged from reality.


Once enough people hop on a trend or idea in the markets the momentum can feed upon itself right up to the point where it can no longer support itself.

No one can really predict how far these things can go, but this is a nice definition of how bubbles are created.


Here are the frequencies in which certain loss thresholds have occurred, on average, in this same time frame:
5% losses three times a year.
10% losses once a year.
15% losses once every two years.
20% losses once every three to four years.



Source: Yahoo Finance

http://finance.yahoo.com/news/how-marke ... 44921.html
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Tue Mar 14, 2017 2:31 pm

This is the most overvalued stock market on record — even worse than 1929

John Hussman says run from an overvalued S&P 500

By Brett Arends

He’s been warning about stock-market valuations for several years. He’s in that camp that the permabulls, wrongly, call “permabears.”

He’s been wrong — or, perhaps, just very early — many times.

But he was, notably, also correct and prescient about both the 2000 and 2008 crashes before they happened, when few others were.


Source: Market Watch

http://www.marketwatch.com/story/this-i ... yptr=yahoo
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Sat Mar 18, 2017 10:14 pm

8 Places to Run and Hide in a Market Crash

From cash to gold and more, these will help you protect your money

By Jim Woods

Source: Stock Investor's Blueprint

http://investorplace.com/2017/03/hide-s ... M0_nPl96M8
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Wed Mar 22, 2017 12:54 pm

What’s next after stock market’s sharp drop? Here’s what history says

By Mark DeCambre

On average, the S&P 500 gains after a long period without a sharp stock-market decline

Source: Market Watch

http://www.marketwatch.com/story/how-th ... yptr=yahoo
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Sat Jul 01, 2017 9:49 am

The crash of ‘97 taught us we won’t see the next one coming

‘We have had two ‘once-in-a-lifetime’ crises in the past two decades, and a third in the next couple of years cannot be ruled out’

This is the 20th anniversary tomorrow of the Tom Yum Goong crisis in Thailand, which triggered the Asian financial crisis that wrought havoc across our economies for an awful 18 months and whose scars still smart today.


The International Monetary Fund had negotiated bailouts ranging from US$57 billion for South Korea and US$40 billion for Indonesia and Brazil to more modest billions in Thailand, Russia and Malaysia.


Currencies across the region had crashed – the Indonesian rupiah to about one-fifth of its pre-crisis level. Stock markets had been shredded.


HK property values crash to 30 per cent of 1997 values.

The sobering lesson was that Hong Kong, with no local market of consequence, was an economy that depended on flows – and when the flows dried up as the crisis deepened, so Hong Kong rapidly joined the wounded.


Our economy contracted 5.5 per cent in 1998, and we plunged into six successive years of deflation – only to have the severe acute respiratory syndrome epidemic knock us firmly backwards again in 2003, and the global recession to cut our knees off in 2008.


Source: SCMP

http://www.scmp.com/business/global-eco ... one-coming
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Risks Out There 04 (Aug 15 - Mar 17)

Postby behappyalways » Sun Jul 02, 2017 10:48 pm

What South Korea’s 1997 Meltdown Can Teach China in 2017
https://www.bloomberg.com/news/articles ... na-in-2017
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Sat Aug 26, 2017 8:39 am

Blood in the streets? Not yet, but when it happens, here’s what you shouldn’t do

It’s nearly impossible to cash in on that “blood in the streets” moment, which he defines as a decline of at least 30%.


“Though you might start buying when there is blood in the streets,” he wrote, “you may soon realize that a lot of that blood is your own.”


“This is the fundamental problem with buying big during a crash. It’s incredibly difficult to call the bottom,” he said.

“So if you try to wait it out you will either miss it completely (i.e. staying in cash for too long), or you will buy before the true bottom and could lose money if you sell at lower prices.

Either way, the best action is no action at all.”


“Assuming you have a sufficient level of liquidity in an emergency fund, I would continue buying assets at the same rate during a financial panic as you did before the panic. Yes, just keep buying is here again.”


Source: MarketWatch

https://finance.yahoo.com/m/1b076a9d-dd ... F-not.html
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Fri Sep 22, 2017 7:37 am

Cramer: This is the worst mistake you can make in a sell-off

"Mad Money" host Jim Cramer guides investors on how to turn a pullback into an opportunity.

by Abigail Stevenson

Cramer said that one of the worst myths out there is that the market is always rational and makes sense. This is not true.

On any given day, the market can make seemingly random moves for reasons that do not make sense. Sometimes stocks go up when they should have gone down, and sometimes entire sectors move for ridiculous reasons.

"Never assume that just because something happened, it has to make sense because the market is always supposed to make sense. That's nonsense," Cramer added.


Source: CNBC.com

https://www.cnbc.com/2017/09/21/cramer- ... yptr=yahoo
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Tue Oct 17, 2017 6:40 am

The Storm That Could Cause the Next Stock Market Crash Is Brewing

by Kinsey Grant

The question to ask moving forward is whether the Fed will be able to pour money into financial systems to keep them from tanking, as the bank has before.


"The Japanese economy was the envy of the world," said Williams, the trader, of the 1980s. But when the Nikkei fell from highs near 39,000 points, there wasn't much regulators could do to stop the plunge.

The Nikkei remains only about half what it once was, even as Japan is the third-largest economy in the world.


"The more machines take over, the more things move. And fast," Zandi said. "AI could exacerbate potential risk."


Source: The Street

https://finance.yahoo.com/news/video-po ... 00994.html
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