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stock market crash
By Mac Slavo of MarketOracle UK

After a massive upswing in US stocks over the last six months, the recent rally may finally be coming to an end. It seems that the trend of rising stocks on bad or better than expected news may be in a reversal, as evidenced by market participants’ caution over the last couple of weeks. For those that follow contrarian investors like Marc Faber, Jim Rogers, Gerald Celente and Harry Dent, this should come as no surprise.

Marc Faber, publisher of the Gloom Boom & Doom Report, advised his subscribers and followers to take positions in US tech stocks, the banking sector and hard assets at the bottom of the markets in early March of 2006. However, he did provide a word of caution on March 16, 2009, making it known that while he was a short-term bull on stocks, that eventually, the economic fundamentals would catch up:

“probably a total collapse in the second half of the year when it becomes clear that the economy is a total disaster.”

As recently as September 3rd, on Delhi TV, he made another call, essentially telling investors to get out:

“I believe in the next 10 days to two weeks we’ll get big moves in markets. And I wouldn’t be surprised if the Dollar would for a change strengthen and equity markets would correct and possibly quite meaningfully so.”

Gerald Celente, Trends Research forecaster and contrarian thinker, advised listeners of the Jeff Rense show on September 23rd to look out below, calling it the Christmas Crash. He believes that the next collapse will come quickly, sometime this Fall, but as late as January or February of 2010:

“It’s going to really be an ugly scene. We are really encouraging people now to take pro-active measures and prepare for the worst. Don’t spend an extra dime.”

Jim Rogers, who is well known for making millions during the recession and commodities boom of the 1970’s, is also hesitant about acquiring more equities. He is an avid US Dollar bear, but in an interview on September 30th, he turned bullish on the dollar in the short term. His advice?

“I am not buying shares anywhere in the world as we speak.”

Finally, we have economist and cyclical analyst Harry Dent Jr., who some may know for having called the real estate Bubble-Boom, and subsequent crash, years before it happened in his book The Next Great Bubble Boom. Dent was also bullish on the Dow, calling for it to reach between 9450 and 10,500 after the March lows of 2009. Like Faber, Dent also cautioned investors to stay vigilant once the 9000 mark was breached. In a recent Economic Forecast Alert to subscribers, Dent indicated that the tide was changing:

“The markets are very overstretched here and we think it is very likely that we are seeing a top just above 9,800 on the Dow today.

This is the best intermediate term play we have seen in a long time. Shorting the stock market (for example, ETF symbol SH) could yield 50% to 60%+ gains over the next year with a 5% to 15% downside if the markets keep edging up for awhile, even to extremes.”

Though we continue to see most mainstream analysts talk the bull market talk, it looks as if the bull may be in trouble, especially if individual investors realize what all of the big boys talking their books already know – that the economic fundamentals are simply horrific and the markets are already pricing in GDP growth of over 5% for the next 4 quarters. Considering that GDP grew at 0.7% in the 2nd quarter, that seems highly unlikely. Some estimates also suggest the the P/E of the S&P 500 right now is at unprecedented levels of over 100!

As of today, it looks as if investor focus is shifting from stocks and commodities into what some consider to be short-term safehaven assets, such as US Treasury Bills/Notes/Bonds. The yield on the 10 yr is at 3.15% as of October 2nd, significantly down since August 7th’s 3.85%, suggesting that safety, not risk, is now the name of the game. Interestingly, and unlike November of 2008, gold seems to be holding strong at around $1000, though this may change if the US Dollar rises, as Jim Rogers, Faber and Dent have suggested it may.

For those still in equities, we believe Tyler Durdern at Zero Hedge said it best, “Go long here at your peril.”

Original article by Mac Slavo of MarketOracle UK

This entry was posted on Saturday, October 3rd, 2009 at 6:31 pm and is filed under All Posts, Survival Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Comments

  1. April 19, 2010 @ 3:43 pm


    Really nice read thanks, I have added this to my Mixx bookmarks.

    Posted by Penny Salma
  2. June 21, 2010 @ 6:44 am


    The American People are with out a doubt, the most stupid people in the entire world.

    A Country must produce something to Generate Wealth.

    China did not do S-H-I-T by itself. The American Politicians have been transferring America’s wealth off shore to China for the last 17 years because the people running our government are trying to destroy America so they can usher in the communistic “NEW WORLD ORDER”. They are all a bunch of damn traitors and should be put on trial in the people’s court and if found guilt, then executed.

    The American workers are standing in soup lines and sleeping in the street as both the Democrats and Republicans are Free Trading America into Financial Bankruptcy.

    The American Politicians have been bought off by the Globalist. The only way out of this MESS is to Physically remove them from office, change the American Constitution so the Politicians can never SELL out the American People again.

    The Federal Reserve is A Private Company and the American government pay them interest on every dollar printed. The American Constitution should be changed stating “ONLY the CONGRESS of the USA” can coin or print the American Currency.

    The American people are so damn stupid they are sitting on their A$$ and watching the American Politicians transfer well over $450 Billion Dollars worth of jobs every year off shore to China. We joined NAFTA and WTO in 1994 and we can withdraw from them anytime we want. America is required is give a 60 day notice to NAFTA and WTO to withdrawal.

    I worked as an Industrial Engineer for 30 years for Rockwell International. What the American people do not understand is that $450 Billion Dollars of Trade will automatically create well over 15 million additional good high paying Manufacturing Jobs in America almost over night.

    We do not have to spend one penny in bailout money to create these 15 million jobs either. All we have to do is start producing the items in America that we consume daily.

    All of you people that think these Trade Agreements are so damn great. Wait until you have lose your Social Security Benefits and you join them 18 million unemployment American workers then tell me how damn smart you are.

    Everyone thinks America has escaped the BIG DEPRESSION.

    Well, I got news for you; The Politicians have print and spent so much money. The annual projected yearly budget has a One Trillion Dollar Deficit every year, for as far as the eye can see. Does that sound like prosperity too you? That has Bankruptcy printed all out it too me.

    The American People have been tricked into believing that NAFTA and WTO are great things for the American Worker.

    If you do not believe me, then go do your own research if you are not to lazy to listen to some youtube.com Videos for a starter.

    If you want know how America got into this Financial Mess and Jobs Problem, listen to the following videos:

    http://www.youtube.com/watch?v=nbbf7yugiZQ&feature=related

    http://www.youtube.com/watch?v=gc3G-hgpxXc&feature=related

    http://www.youtube.com/watch?v=d0EVNhCKwhw

    http://www.youtube.com/watch?v=lqCQHenGwVo&feature=PlayList&p=798479E063B43D69&playnext_from=PL&playnext=1&index=4

    http://www.youtube.com/watch?v=BkQsG0iTA7w&feature=PlayList&p=798479E063B43D69&playnext_from=PL&playnext=1&index=5

    http://www.youtube.com/watch?v=EV0ghsGGrGE&feature=PlayList&p=798479E063B43D69&playnext_from=PL&playnext=1&index=6

    http://www.youtube.com/watch?v=x1CRKhDYTXk&feature=related

    http://www.youtube.com/watch?v=zSngvBld58g&feature=related

    http://www.youtube.com/watch?v=xXDlVxkKCBM&feature=related

    http://www.youtube.com/watch?v=WbtXtDpe5a0&feature=related

    http://www.youtube.com/watch?v=rp3-zOZAggs&feature=related

    Have a great day.. ENJOY..

    Posted by Harry Dingey
  3. February 5, 2011 @ 10:31 pm


    He’s right. The American people are stupid. You could hit one of them on the head with a hammer and it would take 3 hours before anybody said ouch!! That’s stupid.

    Posted by nobodyatall

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