The Stockmarkets Are A Few Months Behind The Housing Crash

[Guest vicmac64]

It is my humble opinion that the stock markets are precisely 3 - 6 months behind the housing market right now.

I believe when the real crash comes it will dwarf the HPC we are now witnessing.

Right now we are seeing the corporates squeeze the last few drops of juice from the markets that will soon collapse dramatically.

As in the Housing market so in the stock markets - a few straining to make a fortune much much too late... And many who have lost virtually all (pension and investment funds) desparately seeking like the gamblers they are to make something back to conceal their losses....

But I think they are finally running out of time...

Oct?????

[A.steve]

Complete rubbish - UK stock market is'nt going to crash.

Bet?

[Guest vicmac64]

Complete rubbish - UK stock market is'nt going to crash.

Why? come on give your reasons why???

[Sinking Feeling]

...........central banks look set to keep pumping money into the stock markets - as long as no one panics we'll all be fine!

[Guest muttley]

The chart says BUY

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[Dopamine]

part of the current problem may be hedge funds shorting the market after it has tried to lift itself - people fiddling the market by playing with it like this might make it more likely to crash than if it was just left to find its own equilibrium after the credit crunch. I sold miners today after my broker told me hedge funds maybe about to go short on them - the fear feeds on itself in a reciprocally negative cycle. Blue chips are on very low p/e s so if things do go south of 5500 I am going to fill my boots. At the moment my nerves can't deal with the volatility - I need some sleep!

[yellerkat]

The chart says BUY

What, on the right-hand shoulder of a classic head-and-shoulders formation??? (Not that I'm a chartist).

[Impartial]

...........central banks look set to keep pumping money into the stock markets - as long as no one panics we'll all be fine!

Yes they will pump and pump and pump until they go - oh sheeeeyat we pumped too much we better stop - then it will crash into oblivion.

[Guest vicmac64]

2p

ok since you are unable to make a reasoned reply I'll tell you why they are going to crash.

1 The population is maxed out on debt - consequence = people stop spending = businesses stop selling = fall in profits = fall in share price

2 Mortgages will go up (even if interest rates come down seems strange but hey blame the banks) - consequence = people stop sepnding - read the first one and you'll see the end result

3 Govt is plum stuffed now - not enough money to keep an army of civil servants and infrastructure in place - consequence = govt raises taxes significantly and starts culling civil sevice jobs = people stop spending blah blah blah = stock market crash

4 Pound falls and London is no longer seen as the financial capital of the world...

5 HPC = no more Mortgage equity withdrawals = people stop spending blah blah blah

I mean - do you really have your money invested in the markets right now???? Hope you have a real close eye on it!!!

[Guest muttley]

ok since you are unable to make a reasoned reply I'll tell you why they are going to crash.

The housing bubble has caused house prices to treble, and only now do we look like having a crash. The FTSE has risen just over 50% in 5 years. Why can't it go up more? You need two things for a bubble to burst. A trigger and a bubble.

[Guest vicmac64]

The housing bubble has caused house prices to treble, and only now do we look like having a crash. The FTSE has risen just over 50% in 5 years. Why can't it go up more? You need two things for a bubble to burst. A trigger and a bubble.

OK reason = DEBT - we are maxed out as a nation... Bottles dry if you like... no money = stock crash

[Kurt Barlow]

OK reason = DEBT - we are maxed out as a nation... Bottles dry if you like... no money = stock crash

Anyone got any ideas on how much of the UK's corporate profit is on the back of the consumer boom - binge? This would tend to indicate how vulnerable Stock Market is to consumer spending downturn.

I expect when it does crash the Chinese will go on a buying spree with their trillion + of foreign reserves.........corporate Britian moves to Shanghai.

[shavedchimp]

OK reason = DEBT - we are maxed out as a nation... Bottles dry if you like... no money = stock crash

I seem to remember the voices of concern when UK Debt reached £1 Trillion some months/years ago - now we are at about £1.4 trillion (is that figure approx. right?)

So, how much is too much? When do we really get 'maxed out' as you say?

Shavedchimp

[A.steve]

I can give another reason to predict a stock market crash. The stock price of stock exchanges.

A stock exchange makes money by charging a levy on trades... this levy is charged if prices go up or down.

For example, shares in the London Stock Exchange is up over 20% this month. This is consistent with the notion that there will be a lot of volatility.

[Kurt Barlow]

I can give another reason to predict a stock market crash. The stock price of stock exchanges.

A stock exchange makes money by charging a levy on trades... this levy is charged if prices go up or down.

For example, shares in the London Stock Exchange is up over 20% this month. This is consistent with the notion that there will be a lot of volatility.

The bulk of Stock market investment comes from pension funds. Whatever other changes I have made to expenditure in recessions (like my father and grandfather) I have always kept paying into my pension. Its tax efficent for a start. Even if unemployment goes up to 10% the majority of employed people will still pay into pensions

I tend to agree that this will help the SM weather any down turn in the housing market.

[LargelyIgnorant]

I can give another reason to predict a stock market crash. The stock price of stock exchanges.

A stock exchange makes money by charging a levy on trades... this levy is charged if prices go up or down.

For example, shares in the London Stock Exchange is up over 20% this month. This is consistent with the notion that there will be a lot of volatility.

Isn't it more to do with sovereign wealth funds chasing real financial assets?

[Guest vicmac64]

Because it's not overvalued and it's not in a bubble, that's why. The bubble was in the late 90's with the tech stocks and I believe the comparissons that have been made now with 1929 are wrong and if you look at Kondratieff theory you will see that 2000 was our generations 1929. That point is gone so it might be better to look at where else we could be in the cycle although much of what should have happened in 2000 has been delayed. But I don't see the stock market crashing as it's still lower than the peak of the bubble which is almost 8 years ago.

Look at the forecast for the FTSE100

Look what happed to share prices in the last crash

I just think that the stock market and housing market are in different cycles - sure, some stocks will do very badly for a while like builders and real estate & investment trusts (REITs). Money will still go into the stock market through pensions and most of the big UK companies are well diversified in oversees markets and won't be adversely affected by any slowdown in the UK economy. The FTSE100 increased by some 50% in the 5/6 years after the '89 peak of the UK housing market and even when the economy went really $hitty in the following years as unemployment and reposessions rose the FTSE100 did well.

From the last link:

Don't be scared to invest some money in shares/funds - it's an opportunity to grow the house deposit fund further. I'm putting more money in because I believe the fundamentals are sound - I'm not buying into a bubble.

Oh its in a bubble ok - and no matter what you read they are connected (the housing and stock markets) - these big conglomerates depend on the sheeple to provide their earnings - guess what - the sheeple are maxed out..... and and and their money pits (houses) are starting to look more like millstones than money pits. Which means real tactile negative sentiment.

What you are seeing now as I have said is a similiar denial that the stock markets are inflated (just as there was denial about house prices) and what you will see is a world economy that was dependant on HPI crash in concert with with the impending and ongoing HPC.

When I was at school 1-2=-1 our country is in a real mess, we are in debt up to our proverbial eyeballs, the makets are attached to our economy, and sums will be seen to add up soon. Mathematics can;t be explained away and debt is debt NOT WEALTH.

[Scott]

Surely the housing crash is behind the stockmarkets!

All the usual SM bellweathers such as property developers and banks have all been going down for a while now.

[A.steve]

Isn't it more to do with sovereign wealth funds chasing real financial assets?

I don't think so. Check the chart - compare with the FTSE.

It seems improbable that this rise comes at a time when merger and acquisition activity is depressed on corporate paper woes, but happens to correspond almost exactly to when the severity of the credit crunch hit the UK mainstream press.

Merger and acquisition activity was rife earlier this year - I can't believe that this is the cause of the current movements... if it were a takeover bid (as had been rumoured earlier in the year) that was responsible for an inflated price, I'd expect it to be declining slowly now on fears of delay.

[Guest vicmac64]

Surely the housing crash is behind the stockmarkets!

All the usual SM bellweathers such as property developers and banks have all been going down for a while now.

No - not at all - first housing in the US, then the markets, then the banks - but these are tremors NOT the event.

The main event has still to come - that event will be the stock markets which will suffer a severe markdown (maybe 30 - 40%), we are at the end of the debt cycle false economy - liquidity has gone.

[Guest vicmac64]

Now you're scaring me!

Nicely put - maybe those who have invested in housing for their pension over the last few years and made good capital gains will be looking to switch back to equities if they know house prices are falling.

Pension funds is the last thing my money would go into - tell me - how have they fared in light of the devaluing of CDOs??

I think that you will find Pension Funds in the news in the very near future for all the wrong reasons.....

[Kurt Barlow]

Now you're scaring me!

Nicely put - maybe those who have invested in housing for their pension over the last few years and made good capital gains will be looking to switch back to equities if they know house prices are falling.

I know a complete twit who cashed in 30 years worth of accumulated local govt pension scheme contributions to ride the BTL wave. If there is a downturn he is wiped out - finito!

[Kurt Barlow]

Pension funds is the last thing my money would go into - tell me - how have they fared in light of the devaluing of CDOs??

I think that you will find Pension Funds in the news in the very near future for all the wrong reasons.....

A well managed pension fund spread across a range of investment vehicles is one of the best, safest investments you can make providing charges are reasonable. What else are you going to get 22/40% tax relief on. Secondly many employers make a contribution aswell providing you stump up your stake. For every £1 I put into mine my employers contributes £1.40. Further more I get 40% tax relief so in effect every £1 of funds added costs me 30 pence.

[Pluto]

I know a complete twit who cashed in 30 years worth of accumulated local govt pension scheme contributions to ride the BTL wave. If there is a downturn he is wiped out - finito!

Wealth is created for making and selling things. With the making comes: innovation, design, and manufacturing, which all requires skills that are obtained through study and experience. That is why the Chinese economy is booming.

Our wealth is a PONZI scheme of selling each other our houses. The government and banks are complicit in this Ponzi scheme as it deflects public attention away from what is really going on.

All Ponzi schemes end up crashing. The government will try to prevent this from happening by keeping everyone in the Ponzi scheme happy (like bailing out NR) but eventually they will not be able to cope. Sentiment will change and then it will be a mad dash for the exits.

[christhpc]

Good to see some sense being talked about the UK stock market (outside of the investment forums) for a change. The FTSE is in no way overvalued, there's absolutely no comparison between it and the UK housing market bubble.