Recessions & Crashes: Memories & Lessons

Re: Recessions & Crashes: Memories & Lessons

Postby winston » Thu Dec 28, 2017 7:31 am

We’re in the Middle of a Speculative Mania

by Dan Ferris

Traits of speculative manias:-
1. Something new
2. A mergers and acquisitions (M&A) boom
3. A credit boom
4. A reasonable fundamental taken to unreasonable extremes
5. A risky scheme sold as a safe investment
6. 'This time is different'
7. Financial shenanigans


Source: Daily Wealth

http://dailytradealert.com/2017/12/27/d ... ive-mania/
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Fri Mar 16, 2018 9:10 pm

It's Time for a Bear Market Checklist

by Debbie Carlso
1. Check your investment time horizon
2. Rebalance
3. Review your risk tolerance
4. Have an exit strategy
5. Remember, bear markets don't last


Source: U.S.News & World Report

https://finance.yahoo.com/news/time-bea ... 48260.html
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Sat Mar 17, 2018 2:54 pm

A decade later, three lessons from the financial crisis

1. ANYTHING CAN HAPPEN
2. MANAGE RISK
3. STICK TO WHAT YOU KNOW


Source: Reuters

https://www.reuters.com/article/us-mone ... US%20Money
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Mon Mar 19, 2018 8:54 am

Ten years after US$16 tril crash, Americans still have not fallen back in love with stocks

Ten years after the start of the financial crisis that erased US$16.4 trillion in assets from U.S. households, Americans have yet to embrace the U.S. stock market with the same fervor as before, holding fewer individual stocks and putting less money into equities overall despite an uninterrupted 9-year bull market that has pushed the S&P 500 <.SPX> up nearly 310 percent from its 2009 lows.

Overall, U.S. households have $900 billion less invested in stocks than in 2007, according to Goldman Sachs research, leaving buying by U.S. corporations now the greatest driver of demand.

In 401(k) retirement plans, meanwhile, investors now hold an average of 52.4 percent in equity-only funds, down from the 64.7 percent they held in 2007, according to Fidelity.

Passive funds now comprise about 46 percent of total mutual fund and ETF assets, compared with just 8 percent in early 2008.


Source: Reuters

https://www.thestar.com.my/business/bus ... PZiW8Ue.99
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Sun Jun 17, 2018 9:39 am

Here we go again, in our double-bubble economy

Source: Daily Crux

http://thecrux.com/here-we-go-again-our ... e-economy/
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Mon Jun 25, 2018 8:20 am

Crises are never easy to contain

by Andrew Wong

I had previously warned that Argentina's economic woes could eventually extend across the seas and impact the Asia Pacific region.

You might think countries in this region are better off than Argentina as they are relatively stable with abundant foreign exchange reserves. But take a look at China, for example. Though it has ample foreign exchange reserves, if it were to become embroiled in a trade war against the United States, wouldn't its economy and markets be at risk?

Let's go back in time to the Asian financial crisis of 1997, when the Thai baht collapsed. At the time, Hong Kong's finance officials had said there was no need to worry as Hong Kong had solid foreign exchange reserves and a well regulated financial system,.

This was a time when the market was looking forward to the return of Hong Kong to China. The Hang Seng index on June 20 of that year had risen above 15,000 points and by August 7, it had hit a record high of 16,820 points.

On July 2, Thailand abandoned its dollar peg, leading to the baht plummeting by as much as 17 per cent against the dollar and triggering financial turmoil throughout southeast Asia, with Philippine peso, the Indonesian rupiah and Malaysia ringgit targeted as well.

Then came the big sell-off as the Hang Seng index crashed to 8,776 points on October 28, a more than 47 per cent plunge from its August peak.

This was not surprising, as market turmoil can quickly spread across emerging markets leaving no country and region unaffected.

Why were the region's markets so vulnerable and the financial crisis so contagious? Firstly, the local bond market was not developed enough at the time. Several companies were reliant on dollar bonds to raise funds, plus there was a lack of adequate foreign exchange reserves.

And although Hong Kong had ample reserves, in the face of a rising dollar and aggressive outflows, a heavy price had to be paid to contain the crisis.

Two decades on, will the regional markets be able to withstand the turbulence generated by the crisis in Argentina? Also, US president Donald Trump looks set to launch a global trade war but even if he doesn't, the movement of the dollar could trigger fundamental changes and should be closely watched.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0625&sid=2
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Fri Sep 14, 2018 2:28 pm

These 4 called the last financial crisis. Here’s what they see causing the next one

By Howard Gold

Gary Shilling, Jim Stack, Raghuram Rajan and John Mauldin on leverage, low-quality debt and more

More than nine million Americans lost their homes and trillions of investors’ dollars went up in smoke as the S&P 500 index SPX and the Dow Jones Industrial Average DJIA, both lost more than half their value October 2007 to March 2009. (Both are now up around 300% since then and close to record levels set earlier this year.)

The consensus was that it probably wouldn’t be housing but that debt and leverage were still huge issues, although they couldn’t agree on a likely culprit.


Shilling is particularly worried about the $8 trillion in dollar-denominated emerging-market corporate and sovereign debt, especially as the U.S. dollar rises along with interest rates. “The problem is as the dollar increases,” he said, “it gets tougher and tougher for them to service [that debt] because it takes more and more of their local currency to do so.” Of that, $249 billion must be repaid or refinanced through next year.

The flashpoint for the next crisis is likely to be in Europe, especially Italy.

“I think the choice of Europe is…going to have to put [all the debt] on the balance sheet of the European Central Bank,” he said. “If they don’t, then the euro zone breaks apart and we’re going to get a 50% valuation collapse.”

“Greece,” he said, “is a rounding error. Italy is not….




Source: Market Watch

https://www.marketwatch.com/story/the-4 ... yptr=yahoo
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Sat Sep 15, 2018 9:37 am

Nine Lessons From the Global Financial Crisis

The system is a lot safer, but some important changes have been put off until the next meltdown.

By Mohamed A. El-Erian

Source: Bloomberg

https://www.bloomberg.com/view/articles ... nd=premium
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Re: Recessions & Crashes: Memories & Lessons

Postby winston » Tue Sep 18, 2018 11:48 am

This is the biggest lesson investors should learn from the 2008 financial crisis

by Howard Gold

Had you gone back to the market top of October 2007, this simple 60-40 portfolio would have earned you 6.7% a year.

Even if you bought at the peak of dot-com mania in March 2000 and held on you would have had a total return of 5.3% a year.


There were the hard-money catastrophists who warned the Federal Reserve’s loose monetary policy would lead to Zimbabwe-like hyperinflation.

For years, Jim Rogers, who was on target in the 2000s but didn’t change with the times, kept telling people to invest in commodities, Asia—anywhere but the U.S.A.

Peter Schiff was one of the few to warn of the financial and housing crisis, but afterward insisted gold would hit $5,000 an ounce, which I ranked as one of the five worst investing calls (so far) of the 21st century.

I’d be remiss if I didn’t add Marc Faber, who, from his open microphone at CNBC, repeatedly made outrageous predictions like “QE infinity” in which the Fed would buy up to $1 trillion of debt a month. He was eventually discredited for racial views that could have come right out of Spike Lee’s BlacKkKlansman.

And who can forget Jim Cramer’s immortal advice to frightened viewers of NBC’s Today show in early October 2008? “Whatever money you may need for the next five years, please take it out of the stock market right now, this week,” he said.

“Buy and Hold” is the worst investing strategy—except for all the others that have been tried.


Source: Market Watch

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

Postby winston » Mon Oct 15, 2018 9:08 pm

5 Lessons From the Market Correction

Corrections are inevitable but if you embrace the pain and plan for it, you will produce superior returns.

By JAMES "REV SHARK" DEPORRE

1. Losses are inevitable and are likely going to be bigger than you think
2. Fast action and clear stops are key
3. When a real correction occurs nothing is safe and there is no way to know how far stocks will fall
4. Don't just stick with the stocks you are holding. Look for new merchandise
5. No one predicts market turns with precision


Source: The Street

https://realmoney.thestreet.com/article ... yptr=yahoo
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