Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Watch Out as Price May Be Staging New Momentum Base In Preparation For A Big Move Upwards - 18th May 21
Why the Demand for US Real Estate Licenses May Soon Fall into a Sinkhole - 18th May 21
Semiconductor Equipment Maker ASML Is at the Center of the Global Chip Shortage - 18th May 21
Could This Be The Hottest Investment Sector For 2021? - 18th May 21
TESLA Tech Stock Bubble BURSTS! Stock Price Heading for CRASH to below $400 - 18th May 21
The Most Exciting Biotech Stock Of The Year? - 17th May 21
Gold Mining Stocks Fundamentals - 17th May 21
Junior Gold Miners Should be Rallying – What’s Holding Them Back? - 17th May 21
Stock Market - Should You Be In Cash Right Now? - 17th May 21
Learning the Financial Markets - 17th May 21
INVESTING IN HIGH RISK TECH STOCKS - ALL OR NOTHING - 16th May 21
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Largest Financial Bubble in History - 10 years of 'Why Sell Now?'

Stock-Markets / Stock Markets 2014 Dec 12, 2014 - 05:03 AM GMT

By: Doug_Wakefield

Stock-Markets

While finding the end of the largest financial bubble in history has proved very illusive over the last three years for some of the most seasoned market technicians in the world, the last fifteen have allowed us to have many reminders that wild rides to the top have always ended the same.



[Chart produced by www.elliottwave.com, Steve Hochberg's Short Term Update, in July 2005. This piece of history, along with many market technicians and historians, can still be found in a free newsletter I released in July 2005, called Teenage Investing.]

$HGX Housing Index - Phliadelphia INDX

Anyone looking at the historical data at the end of 2014, can see that July 2005 was the last time an "all time high" was attained in this housing index. This is not an opinion; it is a fact.

$BKX (Bank Index - Philadelphia) INDX
[Source - My public article, Let the Buyer Beware, July 27 '2007]

$BKX Bank Index - Philadelphia INDX

July 2007 wasn't another period prior to bank stocks soaring to new highs. By that point, it was an early warning of a depression level collapse.

$HIS (Hong Kong Hang Seng) INDX
[Source - Fear and Perception, Nov 1, 2007]

"In January of 2006, investors opened an average of 2,708 brokerage accounts per day. By August of 2007, the average had grown to 450,000 individuals accounts opened per day. Is the difference comprised of individuals who are thoroughly investigating companies' economic fundamentals and the sustainability of their stock prices? Are they seeking to understand when these historic leaps will end, or are they looking for any story that supports the view that China's markets will only go up?" ~ [Fear & Perception, Nov 1 '07]


[Source - The Gallery of Crowd Behavior Returns - May 2, 2011/ Yes, those misspellings irritate you!]

"Based on this information, it would seem extremely important for anyone depending on our global capital markets to pay attention to trends in the US dollar and Euro. From looking at the charts below, and once again considering the comments of Mr. Sperandeo earlier, it would appear that a massive change in direction should be expected for these two aircraft carriers." ~ [The Gallery of Crowd Behavior Returns, May 2, 2011]


[Source - The Gallery of Crowd Behavior: Goodbye All Time Highs, Oct 30 '14]


[Source - The Gallery of Crowd Behavior: Goodbye All Time Highs, Oct 30 '14]

As we head for the close of 2014, and looking at current and former rapidly rising price movements, would one really be all that surprised to find 2015 radically different from the last few years? Considering how much debt has been created merely to stall this "all time high" bubble, would we not expect the downside of financial assets globally to be extremely severe?

Global Debt Exceeds $100 Trillion as Governments Binge, BIS Says, Bloomberg, Mar 9 '14

"The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank of International Settlements.

The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg. The jump in debt as measured by the Basel, Switzerland-based BIS in its quarterly review is almost twice the U.S.'s gross domestic product.

Borrowing has soared as central banks suppress benchmark interest rates to spur growth after the U.S. subprime mortgage market collapsed and Lehman Brothers Holdings Inc.'s bankruptcy sent the world into its worst financial crisis since the Great Depression.....

'Given the significant expansion in government spending in recent years, governments (including central, state and local governments) have been the largest debt issuers,' according to Branimir Gruic, an analyst, and Andreas Schrimpf, an economist at the BIS. The organization is owned by 60 central banks and hosts the Basel Committee on Banking Supervision, a group of regulators and central bankers that sets global capital standards." [italics mine]

Bank for International Settlements warns on riskier loan deals, Financial Times, Dec 10, 2014

"Top central bankers have warned that investors are underestimating the risks in racier "sliced and diced" loans. European sales of such bundled loans have more than quintupled over the past year to the highest volume since they were blamed for sparking a global financial crisis.

The Bank of International Settlements -- dubbed "the central bankers' bank" -- said riskier subordinated, so-called "mezzanine", portions of asset-backed securities are subject to "considerable uncertainty" due to a "cliff effect" whereby only a small error in projecting potential losses would magnify their risks substantially, according to a research paper." [italics mine]

One thing is for certain. The memory of the 83% decline in the NASDAQ between 2000 and 2002 has long since been forgotten in a world of "money for nothing".


[Source - The Gallery of Crowd Behavior: Goodbye All Time Highs, Oct 30 '14]

"So the Fed kept filling up the punch bowl [referring to the period between 2002 and 2005] . And as opposed to going into inflation of goods prices, it went into an inflation of asset prices.

That's inflation in the same way, but its not called inflation. So if the stock market goes up we don't say, 'Oh my god, there has been inflation', or if housing prices double we don't say 'oh my god, there has been this enormous inflation', we say, 'How much richer we are!' But the problem is that we are not richer, it is simply an illusion of richness." ~ Dave Colander - Professor of Economics at Middlebury College (Money for Nothing: Inside the Federal Reserve, minute 59:00)

"But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction." ~ I Timothy 6:9

Complacency Time Has Gone

If you have no experience in growing money on the deflationary side of an inflated financial bubble, I cannot think of a better time to subscribe to The Investor's Mind. Denial and procrastination are not a plan of action. New strategies will be needed.

Next week, I release a new thinking newsletter, The Investor's Mind: Second Opinion, Lessons from the last 10 years. Each issue will provide questions and history most individuals never consider, because deflationary periods have been experienced so rare for most in the West in the last 40 years. However, deflation changes everything once the illusion of the latest inflated bubble burst.

The information is designed to benefit both group and individual planning.

The issues we are facing are far larger than trading or investing. In each issue, I will refer back to my public and private writings over the last decade. It has been quiet a ride, with so much great material from many incredible people and sources. Based on the many "first in history" events we have seen, and will continue seeing", I can not think of a more critical time to challenge the "we have always done things this way" idea.

Click here to start the next six months reading both the original version of The Investor's Mind (started in Jan '06), market sensitive trading reports, and the new version, The Investor's Mind: Second Opinion.

Doug Wakefield
President
Best Minds Inc., a Registered Investment Advisor
2548 Lillian Miller Parkway
Suite 110
Denton, Texas 76210
www.bestmindsinc.com
doug@bestmindsinc.com
Phone - (940) 591 - 3000
Alt - (800) 488 - 2084
Fax - (940) 591 –3006

Copyright © 2005-2011 Best Minds Inc.

Best Minds, Inc is a registered investment advisor that looks to the best minds in the world of finance and economics to seek a direction for our clients. To be a true advocate to our clients, we have found it necessary to go well beyond the norms in financial planning today. We are avid readers. In our study of the markets, we research general history, financial and economic history, fundamental and technical analysis, and mass and individual psychology.

Disclaimer:  Nothing in this communiqué should be construed as advice to buy, sell, hold, or sell short. The safest action is to constantly increase one's knowledge of the money game. To accept the conventional wisdom about the world of money, without a thorough examination of how that "wisdom" has stood over time, is to take unnecessary risk. Best Minds, Inc. seeks advice from a wide variety of individuals, and at any time may or may not agree with those individual's advice. Challenging one's thinking is the only way to come to firm conclusions.

Doug Wakefield Archive

© 2005-2019 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