Brett Arends at the Wall Street Journal has ten reasons to worry about a stock market crash.
Number 6 probably has nothing to do with the stock market, but is indicative of how bad the employment climate is.
6. The jobs picture is much worse than they’re telling you. Forget the “official” unemployment rate of 9.5%. Alternative measures? Try this: Just 61% of the adult population, age 20 or over, has any kind of job right now. That’s the lowest since the early 1980s — when many women stayed at home through choice, driving the numbers down. Among men today, it’s 66.9%. Back in the ’50s, incidentally, that figure was around 85%, though allowances should be made for the higher number of elderly people alive today. And many of those still working right now can only find part-time work, so just 59% of men age 20 or over currently have a full-time job. This is bullish?
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Is this really indicative of the employment climate, or is it more indicative of the welfare state? After all, it seems to be a long-term trend, not something that happened as a result of the economic crisis.
The BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted-index composed of 30 stocks that started January 1, 1986. The Sensex is regarded as the pulse of the domestic stock markets in India.
What percent of people’s assets are in dollar denominated assets? A very high percentage! What will they do when the dollar is destroyed by Bernanke and the unConstitutional coup which is his overlord?
What percentage of the parasitic class (public employees and dependents on federal funding) contribute anything to the market economy? Close to zero percent!
Whoops a small typo, it should read … This recovery is bullsh_t!”
Obama has jammed the pedal to the metal. He’s blasting welfare at key democratic districts out of a very large caliber fire hose. And that’s on top of the welfare being hosed all over Wall Street, international banks, foreign governments, and the military-industrial complex. On second thought the best word is hemorrhaged, not hosed.
How much longer? I thought that it might be on the brink of collapse for a few years now, but they have kept things cobbled together, evidently by tapping into Asians’ income and savings, then by some kind of flapping of arms in 2008, and this year a determined effort to disguise the monetization of debt using deceptive accounting.
My spidey-sense is not giving me any cause for optimism. For example other than very old pundits considered “out of the loop”, fairly junior commentators and ones considered foreign or otherwise outside of the beltway, nobody is decrying the fiscal hemorrhaging, but only making sillier and sillier statements about the need to continue and even accelerate the monetary intervention (see Krugman).
When the inflation of the 1970s was eventually brought (sort of) under control, was there a long period of softening up in which official pundits gave warnings of impending monetary restraint? Or was the inflation tiger ambushed and sandbagged when those dependent on the inflation were least expecting it? If the answer is (a) then we are a long way from the bottom. If the answer is (b) then you might console yourself with the thought that fiscal sanity might break out at any moment.
Minor nitpick, but it’s “gauge” when it comes to hoses.
I don’t trust the WSJ, especially since the US dollar is on the rocks – hyperinflation is a currency event. I’m sure that stocks will go down in “real” value, but in terms of dollar value, I would not make that bet at all. China has unlinked the dollar and is openly talking about gold, the US debt situation is worse than Europe. The world is very ready to dump the dollar as a reserve currency, if it wasn’t for the problems of the Euro, they probably would have already. Once the dam breaks, I can’t imagine how we will avoid the inflationary shock. Zimbabwe’s stock market was zooming up over 1000% per year. I wouldn’t count on the DOW going down, other than relative to the price of gold.
Black Americans, whom I would argue the federal government in recent years has written more laws designed by progressives to “help” them, have an unemployment rate that is more than 1.5 times higher than the rate for all Americans, while teenage blacks are unemployed at a rate of more than 40%, which is above the boiling point. It’s like Mises opined, any government intervention in the free market only makes matters worse for the objects of the government’s affection.If the government designs a program to help you–run like hell for the exit.
I see these young black men hanging around all day with new clothes, new shoes and colorful hats. They don’t seem to ever work. Yet they have money. They must be independent. Maybe they are students studying radical Islam.
Maybe they are young entrepreneurs.
Americans may have most of their investments in dollar denomination stocks but that is because most of that money is invested in funds and NOT by individuals who buy and vote their own shares. Something like 65% of trades are made by computer programs. Do the computer programs read the prospectus and vote the funds? In other words, the stock market is more like parimutual betting.
Second, there are two parallel economies in the US, one for money lenders and one for money borrowers. The rich CAN get richer while the poor gets poorer. Anyone else notice?
This is an eye opener of course. I always thought the same, but today got this to read. Statistics with break-ups … Would like to ask … where did you get these details, I have already opened the link in new window. Hope the market condition improve soon and I earn much more than what I am getting today… lol
The funny thing is that whenever a major news outlet presses the panic switch like this and gets everyone scared out of their minds, the exact opposite seems to happen. I think BusinessWeek has the two most famous ones: the “Death of Equities” cover in 1979, just before an enormous stock market rally; and the “Angry Bear Market” cover in July of 2002, just before the stock market engaged in a 5 year rally to all-time highs. I’m typically a “follow the trend” type of guy, feeling out for which way the market is headed based on the recent trend instead of taking a stab in the dark and hoping it will reverse. But articles like this make me think like a contrarion for a day.
A stocks market is a public market (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stocks (share) and derivatives at an agreed price; these are securities listed on a stocks market as well as those only traded privately.
Dow Futures timing is very important for taking decisions. All the sale and purchase decisions have to taken quickly and correctly by the dealers in a live stock market otherwise; they might sustain serious financial loss.
The livequote of SGX Nifty future can help you to predict Indian stock market behavior more correctly. Singapore stock exchange opens approximately 3.5 hours before Indian stock market opens. Price of Nifty future at Singapore exchange can inform you about FII stands after opening of Indian market.
Yes, the valuation above market value of a large number of stocks in respect to earnings has been used as a potential indicator of stock market crashes, and equally important, excessive euphoria in the market, plus or minus so called pessimistic indicators like high employment, etc. But the main reason still remains a bubble in price of stocks and shares that is excessive and cannot sustain itself as prices goes too high in relation to value. But remember the size of the crash varies a lot, from huge that takes 2 years to correct, to just a 7 day even that corrects itself within a few months. The more exaggerated the signs, the bigger the crash could be.
The employment climate and particularly non farm payroll data is a very important factor but fundamental factors in the form of economic indicators are also not to be underestimated. The current Japanese situation has created a massive ripple into forex markets and ultimately general trading.
Great stock exchange reviews. Thanks to share it.
ENTB
Employment in fact is a very important factor in trading in general. Not to forget the US dollars going down.
This is quite an eye opener. I was just looking at some piks of traders on facebook… all shocked and afraid with the way the stocks have crashed.
Annoying linkspam is annoying
in my opinion, the stock market should be used for excess funds. Excess as in money that you do not need or depend on… that’s the only way to succeed.
I dont believe that stock markets should be used for only excess funds. It should be used as an investment area if u do not track the markets on a daily basis.
Sensexrefers to “Sensitivity Index” and is generally associated with the stock market indices. There are currently two major stock exchanges in India, The Bombay Stock exchange (BSE) and The National Stock Exchange (NSE)
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