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We’re addicted to debt and headed for a crash. It could be worse than 2007

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Good comment

 

 

23

Before cars, it was mortages. Before mortgages, it was the internet. Before the internet, it was video games. Before video games, it was real estate in Florida. Before real estate in Florida it was railways in Britain. Before Railways it was imperial trading companies, Before that it was Tulips. Since the dawn of speculative markets, there have been bubbles built on little more than contagious mania, and the interesting thing about all of them is that they seem to be as easy to see coming as they are impossible to stop.

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7 minutes ago, TheCountOfNowhere said:

Good comment

 

 

23

Before cars, it was mortages. Before mortgages, it was the internet. Before the internet, it was video games. Before video games, it was real estate in Florida. Before real estate in Florida it was railways in Britain. Before Railways it was imperial trading companies, Before that it was Tulips. Since the dawn of speculative markets, there have been bubbles built on little more than contagious mania, and the interesting thing about all of them is that they seem to be as easy to see coming as they are impossible to stop.

the other interesting thing about all of them is every single time the participants think "this one's different" and every single time they all burst spectacularly

 

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10 minutes ago, thewig said:

the other interesting thing about all of them is every single time the participants think "this one's different" and every single time they all burst spectacularly

 

This one is different....it's much worse.

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16 hours ago, TheCountOfNowhere said:

This one is different....it's much worse.

All the other examples you quoted were bubbles in specific, individual assets... where as this is an EVERYTHING bubble.

 

And this one is predominantly fuelled by credit/debt meaning everyone can join in, where as past bubbles were at least limited to a relatively few stupid wealthy people investing real money.

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Although they are easy to see coming, unfortunately greed makes the investors blind...and the difference with this bubble is that they have gambled with my money and our childrens future!

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1 hour ago, AnneD said:
logo-single.png

The Crash & No Bid

 
 

Blog/Uncategorized

Posted Sep 5, 2017 by Martin Armstrong

No-Bid.jpg

QUESTION: Hey Marty,

Love your blog and the insight you have given all your readers. However I am wondering that when you say the markets are going to become more volatile – how does that effect the trigger that sets off the dominoes ??
what i mean is, if the economy around the world hits rough water; what is the rogue wave that sinks the ship? is it a quantity/ volume of capital money that shifts, or is it a short circuit due to political turmoil?
I read that the whole 2008 “crash” was triggered by 500 billion dollars, which is minuscule amount of the total USA GDP. But i have also read from your blog that Germany has 5X its GDP in synthetics on the book !
*IF the markets are more volatile, does that mean there is LESS threshold due to a minor tremor in the gov or markets?
your insight on how volatility increases with regards the tipping point, and WHY the tipping point may happen would be of great interest.
 
N From Canadaor
 
ANSWER: Markets crash when the majority are long and anything can spook them because there is a lack of new buyers coming in to carry the market higher. Some longs try to sell and they find a lack of bids. The crash comes when you hit the no bid and market-makers withdraw. That is the sharp increase in price volatility that is different from volume volatility. With price volatility, there need not be major volume – just a gap and a lack of bids. The event need not even be real – just a rumor.
 
The panic unfolds because of price movements rather than volume. When large gaps appear WITHOUT supporting news, even professionals sell because they cannot make a decision in a vacuum.  recently on Martin Armstrong's blog.

Except when the govt is the avowed and acknowledged market maker of last resort.

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On 05/09/2017 at 5:58 AM, nome said:

All the other examples you quoted were bubbles in specific, individual assets... where as this is an EVERYTHING bubble.

 

And this one is predominantly fuelled by credit/debt meaning everyone can join in, where as past bubbles were at least limited to a relatively few stupid wealthy people investing real money.

True enough (just abouts)

http://investmentwatchblog.com/a-crazy-stock-market-is-punishing-sellers-even-the-economics-nobel-winner-couldnt-understand-why-stocks-keep-going-up/

ndXor7jRNvmSE8Ix57sb_V1FFp5bIymYFcNYk0dh

 

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Watched "The Big Sort" last night.  I'm quite clued up but still felt sick.  2007 was never resolved.  I could go over all the data but that has been done enough.  Same old same old today, but worse with interest.  We are well on the road to debt serfdom to a rentier class and no one is your friend despite what they say or promise. 

They are the masters of the art.  Yes, people are increasingly seeing the problem as it inevitably becomes more obvious as it progresses but it's too late. T!rror!sm has been promoted and used to set the infrastructure in place to now make any resistance virtually impossible as they begin to step out from behind the curtain.

https://en.m.wikipedia.org/wiki/Boiling_frog

Per Elizabeth Kubler-Ross, our reaction will pass through denial, anger, bargaining, depression, acceptance.

Edited by Fence

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What jumped out to me was this:-

Quote

Other debts are lower in quantity but perhaps more telling: problem gambling affects about 430,0000 people – a figure that has risen in by a third in three years – and costs public services, including mental health, police and homelessness interventions, £1.2bn a year. Meanwhile, funeral debt has reached £160m, with charities calling for a better social fund, coupled with greater transparency on fees from funeral directors.

...another way of trying to sell stuff people that do not have the money to pay for it is to split into monthly repayments sold as interest free.......herein lies the problem, far too many or too high an amount of monthly repayments leaves little if anything to live on today.;)

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If you write much you can feel the existence and positioning of the incongruous comment "Very few people, outside the delusional bubble of Brexit enthusiasts, are forecasting much growth" is part of an editorial campaign.  It does not flow.  What other almost subliminal campaigns are there?  Regardless of your Brexit view, as I said, no one is your friend.

Edited by Fence

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35 minutes ago, Fence said:

If you write much you can feel the existence and positioning of the incongruous comment "Very few people, outside the delusional bubble of Brexit enthusiasts, are forecasting much growth" is part of an editorial campaign.  It does not flow.  What other almost subliminal campaigns are there?  Regardless of your Brexit view, as I said, no one is your friend.

Everyone is your friend if you are giving them something.;)

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On 05/09/2017 at 8:30 AM, PopGun said:

Don't worry, Adamno will be popping round shortly to explain why loads of debt doesn't matter. It's the wrong metric apparently...

lolz...

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On 9/5/2017 at 8:30 AM, PopGun said:

Don't worry, Adamno will be popping round shortly to explain why loads of debt doesn't matter. It's the wrong metric apparently...

You mean Adarmo?

Why is it the wrong metric apparently?

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On 9/5/2017 at 8:30 AM, PopGun said:

Don't worry, Adamno will be popping round shortly to explain why loads of debt doesn't matter. It's the wrong metric apparently...

Ah yes this was the time you confused borrowing and borrowed (deficit and debt) and thought we were borrowing more and more when in fact each year we were borrowing less and less. 

adarmo

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  On 8/4/2017 at 9:48 AM, PopGun said:

We're borrowing more and more to stand still, yet you insist borrowing/the debt is irrelevant...

ill ask again.

how much has been borrowed since 2010 against 1997 to 2010.

if the debt is insignificant against the deficit, then why the reluctance to publish the figures here?!

we are waiting...

Again, you are wrong. From 2010 we have steadily borrowed less each year. We are borrowing less and less to stand still. What I am arguing is that the amount that was borrowed between 2010 and 2017 is not as important as the the structural deficit left by Labour who were borrowing through the record boom. I did not state the debt was irrelevant, I stated it was the wrong metric. 

If you have an argument, and you prefer one metric over the others you back it up with your own numbers..... I'll say it again. You're lazy. 

Repeatedly you have failed to explain why the total borrowed is more important that the reduction in deficit, and further have failed to grasp the basic understanding that a deficit can't simply be cut to accommodate lower borrowing. You surely appreciate that a budget as large and as unwieldy as that of the national government has already made (under Labour) a multitude of financial commitments that can't be undone. 

You blame the Tories for having borrowed more in the last seven years, but fail to explain the alternative, or what would have happened if Labour had stayed in power. 

But yeah it's all the evil Tories fault innit.

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Doesn't an economy require its government to take on borrowing in order to provide the lifeblood of business?

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49 minutes ago, mrtickle said:

Erm, no.

 

Go on then. How would you get a brand new country's economy started from scratch?

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On 21/10/2017 at 6:10 AM, Venger said:

Thanks for the link. I don't understand what sort of adjustment they're talking about but it's plainly cleverly adjusted and look where we are, yeeee-hah...

chart of US stock valuations by John Hussman

image.png.4203a8f4d45e60c3c665690376a5e44a.png

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Even the odd article that mentions a crash will be getting just a passing glance from most people as they snigger.Wont happen CBs will bail us all out,we have a mortgage government darent let us suffer.

These people are about to be educated by being part of the biggest deflationary event since WW2.The leverage on the system is incredible and its that leverage that will turn a recession into something much worse.80%+ wealth destruction in some assets im expecting.My children will be telling their grandchildren about it as a warning.Thats the scale of whats ahead IMO.

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20 hours ago, adarmo said:

Ah yes this was the time you confused borrowing and borrowed (deficit and debt) and thought we were borrowing more and more when in fact each year we were borrowing less and less. 

adarmo

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  On 8/4/2017 at 9:48 AM, PopGun said:

We're borrowing more and more to stand still, yet you insist borrowing/the debt is irrelevant...

ill ask again.

how much has been borrowed since 2010 against 1997 to 2010.

if the debt is insignificant against the deficit, then why the reluctance to publish the figures here?!

we are waiting...

Again, you are wrong. From 2010 we have steadily borrowed less each year. We are borrowing less and less to stand still. What I am arguing is that the amount that was borrowed between 2010 and 2017 is not as important as the the structural deficit left by Labour who were borrowing through the record boom. I did not state the debt was irrelevant, I stated it was the wrong metric. 

If you have an argument, and you prefer one metric over the others you back it up with your own numbers..... I'll say it again. You're lazy. 

Repeatedly you have failed to explain why the total borrowed is more important that the reduction in deficit, and further have failed to grasp the basic understanding that a deficit can't simply be cut to accommodate lower borrowing. You surely appreciate that a budget as large and as unwieldy as that of the national government has already made (under Labour) a multitude of financial commitments that can't be undone. 

You blame the Tories for having borrowed more in the last seven years, but fail to explain the alternative, or what would have happened if Labour had stayed in power. 

But yeah it's all the evil Tories fault innit.

Osbourne borrowed more in one term than Labour did in three you clown. This is a statement of fact. Who gives a toss about what if scenarios. I’ll stick with the facts.

oh I got your username wrong... geez my bad... yes forward your profile to make a point, it doesn’t make you come across badly at all...

Edited by PopGun

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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