Gloom & Doom Edition: Holy Crap... I Really Hope He's Wrong...

[WillyT]

Another Market Crash in 2011?
Dan Dorfman - HuffingtonPost
Financial Columnist, Market Commentator
Posted: January 6, 2011 10:30 AM

<snip>

...

If you're one of those investors ready to take the plunge, a word of caution from one incisive market watcher, Olivier Garret, the CEO of Casey Research, an international advisory firm in Stowe, Vt., that provides financial and investment analysis to some 40,000 moderate and high net worth clients in more than 150 countries around the globe. His basic message: Watch out! These are dangerous times and too many things could go wrong.

In other words, there are still plenty of lurking nightmares out there.

Garret, in sharp contrast to the bullish sentiment sweeping Wall Street, but by no means a doomsayer, lays out the ingredients for what he expects could spur an inevitable market crash this year. In effect, he's anticipating, he tells me, "bad events," among them the collapse of both Spain and California, a bashing of the bond market, with yields rising 100 basis points or maybe more, the very real chance we could see a wave of defaults among cities, states and municipalities, the likelihood of decreased spending at the consumer and corporate levels, considerably more downward pressure on real estate and the prospects of a substantial rise in inflation because of heavy money printing.

In addition, he says, you can't rule out a possible German split from the European union, which would cause the union to fall apart and lead Greece, Spain and Portugal to all default on their debt. Noting that the European debt crises haven't improved in six months and that the debt to GDP ratios in most European countries (as well as in the U.S) exceed 100%, he believes this situation is more alarming than investors generally realize and could easily blow up again.

Garret also envisions the possibility of a major failure in the financial arena, noting the world's 25 largest financial institutions all have risk profiles, exaggerated by overvalued assets, too much debt and insufficient reserves. He further notes that we're near to the point where various governments, including the U.S., which is spending $1.5 trillion more than it earns, will not bail out the financials because they themselves have too much debt.

...

<snip>

More: http://www.huffingtonpost.com/dan-dorfman/the-crash-of-2011_b_804957.html

:wow:

:banghead:

:beer:

:smoke:

[Lucky 13]

1. I don't know what to think any more.

On the one hand he's right. Those risks do exist. And in many ways our market crash and slow recovery is in some ways parallel to that of the great depression, indicating we could be in for another bigger "crash".

On the other hand, they've been saying that for a couple of years now and yet 2010 was an up year for the market. And he, like some snake oil salesmen we know, is pushing gold and silver... a market many reputable analysts consider to be the next "bubble" to burst.

So what to do? Who to believe? I'm reluctant to go off course because of an op-ed. There will be 10 more op-eds tomorrow saying something different.

[dixiegrrrrl]

2. Go for it, Lucky.

Get in on the ground floor when the bubbles are rising, right?

All in, I say. The market needs you!

[Tierra_y_Libertad]

5. Or, the basement.

[dixiegrrrrl]

8. good shot!

:rofl:

[Lucky 13]

14. Not sure how to take your post...

... what is your opinion?

I'm saying I honestly don't know what to think anymore. I am less a financial expert than ANYONE on the planet. How do you know what to believe when everyone... and I mean everyone... is telling you something different?

So I just plod along. Saving what I can, when I can. Investing that pocket change of a 401k in whatever they have traditionally said is appropriate for my age.

At some point or another, I've read the stock market will crash, the bond market will crash, the gold and silver markets will crash. Apparently ENERGY companies are the only thing people are sure are 100% money makers. Barf.

I feel like my choices are 1) stay the course or 2) take out all my money and stick it under my mattress.

[soryang]

3. Gold is not in a bubble compared to other metals

...like palladium and platinum. Also by historical ratios to investments overall and to the DOW it is not near bubble valuation.

On the other hand I find Casey Research caters to elite sentiment, recommending investments not generally available to most people, like land and residential purchases in South America, keeping your gold and cash offshore, etc. They are very ideological in their investment decisions, very much Austrian school. If one likes that sort of thing, fine. But I find Casey and Peter Schiff as another example to be rather concrete in their thinking and blinded to a certain extent by ideology. Everything is the government's fault, nothing is Wall Street's fault, Wall Street had this catastrophe forced on them by government Keynesians and "socialists," not their own laizzez faire, unseen hand, globalist, flat earth claptrap which collapsed the economy after serial bubbles in credit, dot.com, credit, real estate, and now credit again to save too big to fail Wall Street banksters again. But to Casey and company, it's all the government's fault, Wall Street banksters are the victims.

[okieinpain]

4. i recommend guns and lots of bullets, and some food with a

couple of years shelf life. when you really get down to it it doesn't matter it's all going to end on 12/31/2012 any way....

[sad sally]

12. Today the 112th congress; on 12-21-12 the end of Mayan calendar

wonder if there's any coincidence with the numbers thing?

[mmonk]

6. My broker keeps warning me about my bond positions.

[WillyT]

7. ...

:spank:

:evilgrin:

[dixiegrrrrl]

9. And you respond by..........?

just curious.

[mmonk]

11. Slowly shifting out.

I really need the income and stability they used to provide but Reaganomics forces decisions I guess.

[Doctor_J]

10. THis article is self-contrdictory

first,

Garret, (is) no means a doomsayer,

then

he's anticipating, ... the collapse of both Spain and California

and

the (EU) to fall apart and lead Greece, Spain and Portugal to all default on their debt

Those last two sound like a doomsayer to me.

[Kablooie]

13. And America's got the Republicans trying to run things again.

Not that the Democrats were that stellar in their handling of the situation but the GOP will certainly make things worse.

Bout time to retire to my little isolated cabin in Montana and send out surprise packages to 'friends' around the country.
That's what I feel like doing.