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9 Comments

  1. While I agree with the above statement that a crash is coming, I believe the timing is way off. We are not in a bubble yet folks. I believe we have at least a year and maybe two until a crash, and in that time the market will probably go up at an accelerating rate. How can you protect yourself? One way is to use trailing stop loss sell orders. Do not put these in your brokerage firm’s computers.There’s a website called tradestops.com (I have no connection to them). You put your securities in, set your stop, and if the market closes at or below the stop price for that security, they text and email you. The next day, you sell that stock at the open. This strategy should allow you to ride the market up and still get out before the big one. If doing so makes you nervous, gradually reduce your exposure over the next year, but still use the stops. Note that you can put stops on mutual funds and ETF’s as well as stocks. Note also that I suggest putting stops on bond mutual funds too.

    The second step in this strategy is to wait until the bottom, when there’s blood in the streets (perhaps literally). When you can buy huge dividend-paying stocks at a P/E of 4 or less, that’s the time to get back in.

    This line of thought assumes that the system will survive the next crash, and that it will not be TEOTWAWKI. If you feel that way, you won’t be buying back in because there won’t be anything to buy.

  2. I am not a lawyer but it seems like this is an Expost Facto regulation. A good firm of class action lawyers should be willing to take on Denver with over 600 claimants involved. This is another case of government run amuck with their social engineering schemes.

  4. 1) I am not a financial advisor so the following is just my opinion.
    2) The primary indicator of a stock crash that I use is the inverted yield curve — i.e, when long term Treasury rates drop down to near the short term rates. According to the Fed, that has been a nine month-1 year leading indicator of past recessions.
    3) It happened in 2000 when the Internet bubble popped (which would have caused a worse recession if not for the massive federal spending response to the Sept 11, 2001 attack). The yield curve flattened again in Dec 2006 as the subprime bubble began to collapse.
    4) My understanding of why the yield curve flattens is that the Smart Money — which knows disaster is approaching — moves into the best investment in a depression : long term Treasury bonds which are safe, immune to deflation and pay interest. If you look at precious metals in 2008, you see their prices collapsing due to the threat of deflation– then rising as the federal government went deeply into debt to pump money into rescuing the big banks.
    5) So far the 10 year bond is still about 1 percent above the 2 year Treasury. One issue is whether the yield curve is still a good forecast when the Fed has driven short term rates down to near zero.
    6) I do agree that if a crash occurs it could be a major disaster — our federal debt has soared by $10 TRILLION in just the 8 years of the Obama administration. Our NIIP (NET debt to foreigners after subtracting our foreign assets and debts they owe to us) SOARED during Obama’s administration — from $2 Trillion to over $8 Trillion. That’s over 40 % of our annual GDP. Plus the retiring baby boomers are an increasing burden on the federal government since the money they paid into Social Security and Medicare Trust Funds over the past 45 years has already been spent.

  5. Re the rise in the stock market it may be driven by a cut in costs not rise in earnings. The Democrat news media has been very quiet over several thing Obama did:
    a) Obama cut the payments that US corporations have to put into pension funds by allowing them to assume they will earn 5% ANNUAL profits on the pension fund assets over a 25 year period — an obvious accounting fiction but one which lets corporations show their pension funds are funded near 95% of requirements even when they are below 80%.
    b) Obama also cut Social Security liabilities by screwing women badly. Until about 2 years ago, a married woman who had worked and paid payroll taxes could get half-benefits at age 66 under her spouse’s SS account and delay drawing on her own account until age 70, allowing her account benefits to grow. Fair since the half-benefit recognize women’s contributions as stay at home mothers and the full benefits rewards them if they go back to work after the kids enter school.
    Also, women tend to live 5 years longer than their husbands.
    c) But Obama did away with that, forcing women to draw on their accounts at 66– which reduces their lifetime benefit by about $100,000 , depending on their wages.
    2) Much of the Democrat’s news media hyping of “sexual aggression ” by men is deceit designed to distract women voters attention away from WHO has really been stabbing women in the back on behalf of Rich campaign donors. And , of course, there were a LOT of women suffering unemployment during the 8 years of Obama’s Big Bailout.

    1. PS With unemployment causing a corresponding drop in women’s life savings.

      3) And our deceitful news media has ALSO been very quiet about how Obama’s healthcare “reform” is dumping increasing costs onto the American worker. Companies are cutting their costs by bring in new healthcare plans that make workers pay large deductibles (no insurance payment until worker has first paid out several thousand dollars), higher premiums (thousands just to get the insurance) , higher percentages for worker co-payments after deductible is met and higher caps ($13,000) on how much co-payments a worker has to make for severe illnesses.

  6. Commenting on the real estate article.

    Curious stuff. I don’t have a problem with the city demanding a percentage of new massive housing tracts to be pegged for lower income families. There has got to be a way to break the cycle of poverty that afflicts segments of the population.

    That being said, the city is hosing her. They allowed her to purchase the home outside of their fancy, well managed program. They screwed up. A non-corrupt city management would have admitted their failure and let her move on with her life.

    Instead, they are trying to retroactively force her into the program. Not sure why her attorney is bothering fighting the corrupt city hall. File a massive, maybe billion dollar law suit over discrimination. Not sure what kind of discrimination, but thats what good lawyers are for.

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