Instead, we prefer the happy talk that will just keep coming out of Wall Street and Washington till the 2016 collapse. Ouch, the Dow crashing all the way below 10,000. That will translate into the DJIA crashing from today’s 18,117 down 50% to about 9,000. Jeremy Grantham’s already on record predicting that “around the presidential election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse.” And this next one will trigger losses bigger than 20. Let’s compare 2016 with earlier crashes: 2008 to 2000 to 1929, knowing all bulls drop into bears eventually. Deja vu 2008: Watch another presidential hopeful collapse! Or we know some investors really do want to heed the warnings, so they can plan ahead, avoid big losses, and take advantage of opportunities later, at the bottom.
Why? Simple, behavioral economists have long been telling us that investors will either choose to stay in denial till it’s too late, never having learned the lessons of history when the market collapsed in 2008, 2000 or 1929, when they collectively lost trillions. So if no crash is in the cards this year, then why bother with warnings and a countdown? Why bother building up the 2016 elections with lots of dark early warning signs, and doom-and-gloom warnings for the next 18 months? MarketWatch’s Sue Chang writes of a 10%-20% stock-market correction by July.īut we also know markets are typically up the third year of a presidency. Why not sooner, you ask? Why not in 2015? Yes, Mark Hulbert’s already warned that the “stock market risk is higher today than it was in the dot-com era.” Yes, a dip is possible. Or rather delayed it, which adds more power to the next one. Plus cycles theorists warn that we dodged a crash in 2012-2013, thanks to the Fed’s stimulus and cheap-money polities.
moreover a lot like the 1929 crash and the long depression that followed. like the 1999 dot-com collapse, it’s post-millennium loss of $8 trillion market cap, plus a 30-month recession. But a crash is a sure bet, it’s guaranteed certain: Complete with echoes of the 2008 crash, which impacted on the GOP election results, triggering a $10 trillion loss of market cap.
Maybe not till we get a bit closer to the presidential election cycle of 2016.
Yes, technology IPOs are in the lead, and with all that good news, it’s easy to understand why investors tune out, don’t want to hear the warnings, no countdown to the 2016 crash.īut the crash of 2016 really is coming.
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