Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

“Money Bubble” Predictions Coming True - Stock Market Volatility Surges

Stock-Markets / Stock Markets 2014 Oct 04, 2014 - 12:56 PM GMT

By: John_Rubino

Stock-Markets

In The Money Bubble: What To Do Before It Pops, James Turk and I climb out on some long, skinny limbs with a series of extreme predictions. Now it’s time to start tracking the ones that are (or seem to be) working out, beginning with increasingly wild swings in US equities:

Chapter 26, page 294:
For a sense of how an over-indebted financial system enters a catastrophic collapse, imagine a spinning top. For a while after being set in motion, the top stays in one place, spinning smoothly. But then a slight wobble creeps into its rotation, gradually becoming more pronounced until it turns violent. The unstable top then shoots off in a random direction to crash against whatever is nearby. That’s how the financial markets will behave when the Money Bubble bursts.


As this is written in late 2013, our imagined top is spinning smoothly again after a huge, near-catastrophic wobble in 2008. With US stock prices at record highs, interest rates still historically low and daily fluctuations in major markets reasonably muted, all looks well. But soon, probably in 2014 but almost certainly by 2015, the fluctuations will begin to increase until the system spins out of control.

Now consider the US stock market over the past two weeks. The following table lists the daily fluctuations of the Dow Jones Industrial Average, which in the space of ten trading days has seen seven triple-digit moves, for an average swing of 132 points. Mr. Market is looking increasingly bi-polar.

More from The Money Bubble:

A useful indicator of where the markets are in this process is the VIX index of volatility in the S&P 500 options market, which predicts month-ahead fluctuations in the stock market. Figure 26.3 shows how placid the US stock market, as depicted by its low volatility, was while the housing bubble was inflating in the mid-2000s. But notice what happened in 2007 and early 2008: First came some wobbles, as the early indications of a bursting housing bubble hit the markets. Then in 2008 the bubble burst and the banking system began to implode. The markets were terrified and capital was pouring in and out (mostly out) of stocks and pretty much every other financial asset class, causing wild fluctuations. The VIX soared from 20 to 80 in a matter of months.

In late 2013 the top was once again spinning smoothly. But under the surface, all the imbalances that nearly destroyed the global financial system in 2008 were not only still resent, they were being amplified by governments around the world borrowing aggressively, printing, and intervening. By late 2013 the system was once again primed to start wobbling. Which means a spectacular trade is just waiting to be placed.

So the follow-on prediction is that today’s volatility, like that of 2007, will be resolved to the downside via a market crash and possibly a full-blown financial crisis sometime in the coming year. Stay tuned.

By John Rubino

dollarcollapse.com

Copyright 2014 © John Rubino - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in