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The Ghosts of Crashes Past, Recent, and Future as they Appeared on this Blog

It’s not boasting to state plainly that you were right if you are equally direct about your errors. I have until now rightly predicted all of the stock market’s major downturns, starting with the one in 2007 that gave us the Great Recession. The first of those led to the writing of this blog. The next two were predicted and recorded as they happened on this blog, and the latest, whether it proves right or wrong, waits shortly in the future. Each time I made such a prediction here, I bet my blog on it. The blog is still here, but will it continue to be?

I am using the term “crash” loosely in this article because one time I clearly stated the impending plunge would not technically amount to a crash (a sudden drop of more than 20%) but it would be much more significant than just a correction (a decline of 10%) because of how drastically it would change the nature of the market. I’ll show here how it did. The next time, I predicted a “crash” that did not quite turn out as significant as I claimed it would be, but it was an historic event in that the Dow fell further in January than it had ever done in its entire history, and it did so exactly the timing (to the day) that I laid out in advance.

I let myself off easy on that one as being both a hit and a miss because, after all, getting timing of a major plunge right to the exact day as well as the counter-intuitive manner by which it would start on that day is not something one typically sees.

Now we are about to see whether I will survive the prediction I made many months ago for January 2018.

 

The ghost of crashes past

 

On September 3rd, 2014, I wrote an article titled “Will There be a 2014 Stock Market Crash?” In that article I predicted something big and wicked appeared to be coming right around the corner:

 

This [prediction] is coming from someone who has not been crying the sky is falling for some time….. I won’t go as far as I did with the housing market [back in ’07] by predicting a stock-market crash based on the evidence at the moment, but I will say it is looking like a significant risk this fall, should other events trigger panic in stock investors who know they are heavily leveraged and who know everyone else is, too.

 

That bet sounds a little hedged, but it was merely reiterating what I had predicted in the early spring of that year:

 

I’m not predicting economic collapse in 2014 any more than I did last year. Some well-known talking heads did for 2013, especially related to China, and I said they’d be wrong. Marc Faber, Nouriel Roubini, and Jim Rogers all predicted that 2013 would bring a great crash, and I said that I did not think that was likely. While I’m not forecasting calamity in my 2014 economic predictions, it certainly looks like a stormy fall ahead of us as these pressures start to build against the global economy. (“Strong Headwinds Face Global Economy“)

 

In keeping with that earlier prediction, I concluded my September update for the rapidly approaching autumn months as follows:

 

I avoid sensationalism or market pessimism, but unlike bullish market optimists I will predict doom when doom really is on the horizon, but not before. I would move the needle on my gauge that monitors the likelihood of an economic crash this year from yellow to solidly orange where I predicted in the spring that it would be come fall.…

The sad tale to be seen in the market today is that we have learned nothing from the economic crash of 2008 and less than nothing from the high-tech crash at the beginning of the millennium. The market is wildly speculative on dot-com stocks and highly leveraged. It has huge potential to fall rapidly if something goes wrong because the investing is so highly leveraged (built out of debt). The market looks exactly like it did before the last bust of the dot-com bubble. Because it is such an unstable situation and because the headwinds that I forecasted last March have grown, the likelihood of that market toppling in the fall has increased.

Every force mentioned in my March forecast has built up in the directions predicted, bringing the risk level for this fall to exactly the precarious level I predicted. Remember, I bet my blog on things taking that direction this past March, promising I’d stop making forecasts if I was wrong about the direction these headwinds were taking us….

I maintain that bet while nearly everyone else is saying the economy has improved this year, and superficially it appears it has; but I am looking at the teetering state of the market and the growing forces of the winds that whirl around us and saying that those who think, based on statistics that the economy is recovering, are all looking in the wrong direction. They are not paying attention to the foundations of this structure, and they are not looking at the sheer forces that are ready to knock it off its wobbly foundation. The economy is, in fact, precariously weak, and the forces that could knock it over have grown increasingly strong.

 

The area in the yellow box below shows what happened less than two weeks after if I reiterated those strong warnings that things were about to go very bad:

 

Dow stealth bear market fulfilled 2014 stock market crash prediction

 

I wrote and published the article two weeks before the big dip that took us into the yellow box in the graph above — a time which the author who published this graph now refers to as “a stealth bear market.” I would later write that, as far as I was concerned, the events that happened that fall broke the spine of the bull market completely (the Trump rally that ended the period in the yellow box being an entirely new phenomenon built on a different basis of speculation). As with the author who published the graph, I disagree with those who say this has all been one long bull market of recovery.

I think I was right about that fall with the perspective one gets when looking back from a distance. If you took all your money out of the stock market at the start of that yellow box, you could have kept it out of the market for almost two years, and you would have missed nothing but a bumpy ride to nowhere. The bull clearly broke its back with that first big plunge in the fall of 2014, never to recover without massive intrusion by a new force in the market.

Technically, the S&P fell 19% by the time that break finished playing out, so it missed becoming an officially declared bear market by a mere nick; but I think it is clear the market broke … like a hurricane that misses being named a hurricane by just one mile per hour. It’s a naming technicality that doesn’t change how bad the storm was. At any rate, I had been smart enough to stop myself short of saying the market would “crash” or that total calamity would hit the economy and had predicted, instead, that a market downturn of major significance was about to happen. Clearly it did, so I got to keep writing my blog.

Note that the massive change this event brought to the market was ONLY reversed by the momentous election of Donald Trump and the ensuing Trump Rally. You can see the exact point that happened near the end of the yellow zone above. Without that event, the market would still be churning sideways; but I never said the change I was predicting in 2014 would be apocalyptic or that the market would stay down forever.

As noted then, I also had not predicted anything dire for quite some time prior to that. (I’m not a permabear, always predicting doom and gloom until it happens.) It took a new major historic event to upset the country and extract us out of that seemingly endless sideways bounce and crawl of the “stealth bear” that had begun right when I said the market would break.

 

 

The ghost of a Christmas crash most recent

 

 

The next time I predicted a major downturn in the market was not until December of 2015 when I also bet my blog on the prediction coming true, and this time I was even more specific. Just a few hours before the Fed raised interest rates for the first time since the official part of the Great Recession, I wrote the following prediction:

 

Let me share something counter-intuitive. Whether the Fed raises interest rates or not, this Wednesday is D-day for the Fed’s economic recovery because the Fed is Damned if it does and Damned if it doesn’t. I’ll certainly show you why, but the counterintuitive part is that you can expect the market to crash upward as it leaves Wonderland and returns to reality.

Maybe I am a contrarian to contrarians because while I have taken the contrarian view that the recovery is an illusion, most contrarians appear to believe the stock market will crash as soon as the Fed raises rates. I take a counterintuitive view as being most likely. The market will most likely soar, even though raising rates definitely will cause its demise. How is that possible?

Fear of the Fed’s first rate increase is already priced in as the expectation for Wednesday’s Fed meeting. If the Fed raises rates, I would expect a momentary pause — a gasp of uncertainty — as investors quickly look around to see if the sky falls. Then when it doesn’t fall, they will breath a huge sigh of relief and take that as proof that the contrarians or bears were wrong. In sudden euphoric lightness of being they’ll proclaim, “We’re all right! We made it! We survived the day we have been told to fear, and the sky didn’t fall.” Worry will give way easily to euphoria, which wants to happen. The feeling of nothing can stop us now will take the day. The Fed’s plan worked; things didn’t fall apart as the prophets of doom and gloom said. We are well on our way!

But what do you know about euphoria and human beings? In my experience, euphoria is more often divorced from reality than based upon it. It skews perception of reality, and usually comes in a manic-depressive wave. First you are washed over by the crest of euphoria and then you are sucked down into the trough of despair….

The economy doesn’t crash because the Fed ends its free interest. The economy is already sinking. What crashes is the illusion of recovery. December 16, 2015, is D-day because it’s the day when reality starts to sink in….

[The market] may bounce in euphoria over the simple relief that it didn’t immediately crash when the fuel tap was shut off, but that death spasm can’t last long with nothing left to lift prices up…. you will very soon be able to look back and see that this day, Wednesday, December 16, was the turning point. (“The Epocalypse: What Will D-Day Look Like?”)

 

And what happened? You have to look no further than the yellow box in the graph above. I made my prediction in the period between the two deep plunges inside the yellow box. The market nudged up on December 15th right after the Fed’s announced its increase, then it shot up a lot more on the 16th; but then it stumbled and fell on the 17th – 19th. The bulls tried to rally one last time, then walked off a cliff in January in what became the biggest January plunge in market history.

But here is the part where I have to also say where I was wrong. While I was right to the day about the timing and about how the ups and downs would play out, I was greatly wrong in stating that it would lead into an economic calamity I called “the Epocalypse.” It did not.

I kept writing my blog, however, because most of it had happened exactly as I said it would, though not to the degree that I had predicted. It was more of an overstated hit than a miss. Unlike the first bet where I resisted the doom and gloom, this time I had gone too far into the glooming. Still, it was a record plunge that January, and it did become the lowest point in the period designated above as the “stealth bear market.” It was a lot closer than anyone else’s call had been.

 

The ghost of a crash soon to be

 

My final time in betting my blog (because I choose to put my money where my mouth is) was this year when I bet the economy would show serious signs of breaking down by summer and stated where the cracks would begin to show. In addition to laying out the exact fault lines that would show up in the summer, I predicted the stock market would crash in the fall or more likely in January of 2018, but no later than that.

Now it’s time for me to say, “Let’s watch what happens.” Things clearly aren’t looking good for me this time around, but hang around long enough to see how it plays out.

But first, about those major cracks that I said would show up in the summer. Three of the major cracks that I said were likely to emerge were the retail apocalypse, the beginning of a slow decline in the housing market and a crash in the auto market. All of those things became evident last summer, just when I said they would. Then, however, the hurricanes and wildfires hit. I noted the severity and spread of that destruction would probably turn the housing market and the auto market around for the next year or two.

Obviously, I cannot see hurricanes coming as rescue wagons that will thwart my predictions, but such is the risk of making economic predictions. There can be unexpected white swans, just as there can be black ones. I’m not suggesting those catastrophes are ultimately good for the nation in the long run; but just like a wartime economy, they can light the economy on fire by forcing all kinds of spending. Thus, they greatly accelerate the velocity of money as much as they accelerate the velocity of air.

I pointed out before any statistics came in that these would would postpone the events I had predicted and that had already begun to show. So, I didn’t wait to alter that prediction until after the fact. Simply put, you cannot wipe out or badly damage nearly a million houses and nearly a million automobiles without all of those having to be replaced as quickly as possible. As most were likely insured, so most would be replaced in the fall and winter and on into the spring of 2018. In fact, rebuilding so many houses will take a couple of years.

Some people would rebuild homes once the cleanup was over; as many as possible would soak up surviving houses that were already on the market (driving up the price of those limited available homes) because they needed something to live in right away. The supply of existing homes in those areas, however, would be very limited; so many people would have no choice but to relocate to other regions in order to find immediate housing. The hurricanes would create a lot of demand for both new and old homes and would fill up a lot of vacant apartments but would also press people into other states to find housing.

It’s hard, maybe impossible, to quantify how much of the housing resurgence throughout the US is due to the hurricanes as well as to the wildfires that have been destroying homes in California since last summer, but such vast swaths of destruction clearly has to have a major impact on the housing market when you are talking a sudden need for a million replacement homes and a million replacement cars. That will certainly drive up the prices for both new and used homes and cars. So, those industries, which did start to reveal signs of decline in the summer have been greatly shored up on the backs of insurance companies and US debt in the form of relief … for now.

Nevertheless, a bet’s a bet. Events that were often described by the media as apocalyptic in scale swept in out of the blue and shook the whole economy by creating a need for all kinds of replacement goods beyond just houses and cars. They stirred the pot rapidly and turned up the heat by adding fire and air, forcing the velocity of money to heat up everywhere.

However, a major part of my bet was also that the stock market would crash in the late fall or January of 2018. If that turns out as predicted, I will claim I had a lot more significant hits than misses, given that the misses have reasonable justification, too. In which case, I’ll stay in the blog-writing business. If the market doesn’t crash, however, then then the balance tips in favor of the misses, and I’m out.

Of course, my market predictions look unlikely. Something else I did not see with any clarity (but then neither did anyone else) was that the Trump rally in the stock market would last so long or climb so breathlessly high. But here it is. The anticipatory phase of the rally is all in. That’s why we have a noticeable lull now that the Trump tax cuts have been approved at a time when we might normally expect a Santa-Clause rally. There is no more pricing in happening.

Those new tax breaks will start to come in just a few days from now, and I anticipate the market will fall when those breaks become the law under which people are selling stocks. If I could revise my bet, I’d be tempted to say that fall will no longer end the rally, but the first month’s transition from anticipating to experiencing life under the new laws will likely be rough. There is probably a lot of sea to move through this passage. I cannot revise my bet, of course; but I’m just saying the unforeseen strength of the Trump rally would cause me to take some of the direness out of the fall that I anticipated if I could.

The market experienced enormous overheating (like no one has ever seen before) during the long Trump Rally, which lasted much longer than I predicted it would (but, then again, much longer and higher than even the most optimistic bulls predicted). Trump’s tax changes will definitely stimulate the market in the year ahead; but Januaries are slump months more often than boom months, and there is good reason to think investors are ready to catch their breath and secure some profits out of the market after that long, exhilarating ride — a ride that at the time was entirely speculative because it was based on tax cuts that no one could be sure would happen.

Some profit taking at the end of a year with a rampage like this would make sense. Postponing that profit taking until it can happen under much better tax rules makes even more sense … to me … in a world that increasingly makes little sense because of how rigged markets have become due to central-bank manipulation. So, I expect January to be a month of profit-taking, but will that event become bearish enough to save my blog, given that I predicted a stock market crash that would most likely happen in January?

You can read more of my predictions on that matter in my next post, which will contain my 2018 predictions, but which may also be my last post. Time will tell (and it won’t take much time).

  • John

    ‘The Federal Reserve exists because Congress passed a law, signed by the President, back in 1913. The Federal Reserve is fundamentally a creature of Congress, in important part due to the provision giving Congress the power “to coin money, and regulate the value thereof” in Article I of the U.S. Constitution.

    Can we trust Congress to keep taxpayers safe, while overseeing the Federal Reserve?

    For that matter, can we trust ourselves?

    Anyone can monitor the Federal Reserve’s financial statements. The Fed produces a weekly report on the consolidated balance sheet for the Reserve Banks, and the Reserve Banks produce their own (audited) financial statements annually. But the Fed is the master of its own accounting, and sets its own accounting standards. And to date, in the modern (post-1990s) era for federal government financial reporting, it may be a little surprising to learn that the comprehensive financial statements for the federal government do not include the Federal Reserve Banks! The Fed has argued that doing so would harm its independence, and to date, the Congress has agreed.

    The Fed has been growing rapidly, and now owns a massive bond portfolio. The Fed is not immune to interest rate risk, particularly as the share of longer-term bonds in that portfolio has been growing. And the Fed is highly leveraged.

    In a way, it sounds like our government has its own off-the-books hedge fund.

    Granted, seigniorage can be a lucrative business. But expected return is a function of risk.’

    https://www.truthinaccounting.org/news/detail/are-the-federal-reserve-banks-too-big-to-fail

  • John

    Trump said his financial experience was right for such troubled times.

    “I’m really good at that stuff,” he said. “I know Wall Street. I know the people on Wall Street. We’re going to have the greatest negotiators of the world, but at the same time I’m not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us. We’re going to tax Wall Street.”
    https://www.newsmax.com/finance/streettalk/donald-trump-tax-wall-street-investors/2016/01/10/id/708900/

    “While Trump granted 5-year exemptions to Citigroup, JPMorgan, and Barclays, and 3-year exemptions to UBS and Deutsche Bank, it should be noted that his administration is not the only one to have done this. As International Business Times noted, “In late 2016, the Obama administration extended temporary one-year waivers to five banks,” which just happened to be the same ones Trump has now extended the exemptions on—revealing the real rulers in DC.

    Not surprisingly, the latest decision to pardon the banks comes in stark contrast to one of Trump’s most applauded campaign promises—that he would finally stand up against Wall Street and demand that the most powerful banks be held accountable to the public.”

    https://www.activistpost.com/2018/01/no-one-watched-trump-pardoned-5-megabanks-corruption-charges.html

  • John

    http://www.321gold.com/editorials/moriarty/moriarty011418.html

    It does make you wonder what a s-hole really is?

  • John
  • John

    https://www.bloomberg.com/news/articles/2018-01-11/junk-bond-funds-see-largest-cash-inflows-since-december-2016

    More than $2.6 billion flowed into high-yield bond funds during the week ended Jan. 10, according to Lipper Fund Flows data released Thursday, as investors looked to get a piece of a junk-debt rally already blowing through year-end forecasts.

    https://finviz.com/quote.ashx?t=HYG

  • John

    ‘ But the Fed is already so heavily invested in accommodating the Treasury’s fiscal excesses, it’s hard to see any Fed chairman turning the situation around.

    The more important point is that as the fiscal situation facing the Treasury continues to deteriorate, Fed officials will be under enormous pressure to accommodate swelling federal deficits—even if it means pretending that the central bank is a source of revenue to the Treasury. The operative model of political economy here is Argentina in the 1970s.

    As the Treasury’s deficits grow larger and larger, you can bet that Congress will force the central bank to buy increasing amounts of public debt, which will be recycled to the Treasury as “revenue.”’

    http://www.theamericanconservative.com/articles/cutting-through-the-feds-orwellian-doublethink/

  • John
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    • The author is a little confused on that one, John. I’m sure the reason you’re sharing it, though, is for what he shows about the Fed’s apparent rate of unwinding. We’ll only know when the last week of December is in (reported Thursday or Friday of this week) whether the Fid is on track for getting rid of treasuries, but it certainly appears the Fed is making no headway on dumping mortgage-backed securities.

      Where the author is majorly confused is in stating several times that the effect of QE was to raise bond yields so that unwinding QE should be causing yields to fall when, instead, they are slightly rising. On the contrary, the effect of QE was to intentionally reduce bond yields on long-term treasuries in order to reduce corresponding interest on long-term mortgages. QE drove yields down so low that in many countries REAL yields (after inflation) went negative.

      That means the effect of unwinding QE should be that yields rise, which they are doing … and that is potentially where the big problem lies down the road … a REALLY BIG problem. Right now, the Fed has barely begun to unwind, so the effectson yields has been minimal. They rose a bit, and then settled back down.

      The author is confusing bond yields (interest) with bond prices. QE raised the price on bonds, meaning you could sell a bond you already owned for more than you paid to get it because it had a higher yield than newer bonds. That meant people would pay you a little more to get your bond that gives better interest.

      The big problem with QE was that it drove yields on bonds so low that there was nowhere left to get relatively safe income on your money — bonds having once been the “safe haven” investment. Some people were actually paying to loan out their money. Insane.

      –David

      • John

        Thanks, David. Seems the Fed more than anything else is a debt enabler for politicians and goodness knows they have done a masterful job in that regard, especially. They continue to work on their favorite victim–throwing Uncle Buck under the bus for more than 100 years!!

        https://finviz.com/quote.ashx?t=UUP

  • Kyle Thomas

    Dave, you should know better than to bet on the timing of the huge crash that is coming. All you can do is make intelligent guesses, like the rest of us, and no-one here will think badly of you if you are wrong.

    I just watched Greg Hunter’s latest interview with Danielle DiMartino Booth – brilliant interview, well worth watching. She said that her friends have “quit trying to guess when this is going to end”.

    We all know it’s getting close, but no-one can possibly know what is happening in the minds of a bunch of psychopathic lunatics. My guess is that the timing will be a political decision, not an accident, but all we can really do is be prepared every minute of every day. It’s an awful situation and I hope that some day, justice will be served on the people that are putting us through this. Thanks for all your hard work, and please don’t give it up.

    • Thanks, Kyle. I should have not gone that far, but I get tired of people who are endlessly making big predictions that are wrong year after year, but they keep going on with it. I was resolved not to be the kind of person who makes big predictions and then just goes on doing it if wrong.

      Of course, we are all now looking at a situation that no one in the world has ever seen (massive wholesale money creation all over the world followed by an equally massive unwind) all done originally to intentionally and overtly rig the price of the stock market (“front-run the market,” as former Fed governor Richard Fisher admitted, in order to “create a wealth effect”).

      So, you have history’s greatest global money printing and market rigging, including direct buying of stocks by some central banks, making a global economy where predicting outcomes of a major course change is far more difficult than it was with my earlier predictions that were better. The whole system is so rigged and fractured now that I don’t think any engineer could look at this top-heavy structure and know for sure which piece is going to fail first as the pieces are pulled out at the bottom. The unwind is a Jinga game played in an Alice-in-Wonderland world.

      As you suggest, I thought it would end with a political decision, but where I was wrong was in thinking that the Fed was already realizing its recovery was failing so that their political decision would be to terminate their support on Trump’s watch in order to make use of him as a scapegoat for their failure. It appears they may still believe their program can succeed. Or they are just in no hurry to let Trump take the blame, knowing that the unwind will destroy the recovery, no matter how gradual, and anything abrupt will make it look like they intentionally jogged the system to make it fail.

      To me, either option has been equally plausible: 1) Conspiracy option — they know it is failing (big conspiracy option, PLANNED it to fail in the first place in order to launch a cashless system), and they plan to put it all on Trump as a suddenly convenient scapegoat; but they are patient, knowing full well it will all fail soon enough as they do their gradual unwind. 2) Non-conspiracy option — they all come from a school of economic thought they genuinely believe will work, and they are convinced of their own genius to where they believe their recovery plan DID work; so, they are confident unwinding because they think it will hold … when the reality is that only thing holding the illusion up is the QE. In the latter case, it is just a s certain to come down when the artificial support is removed. (The option I don’t believe is that they believe in it, and it HAS worked.)

      Either way, it comes down, but I was wrong to think the first minor amounts of QE withdrawn would bring it down … especially now that we are seeing the Fed appears to have reduced even the minor amounts of unwinding by half of what they originally stated they would do, indicating that they are no longer so sure about their recovery withstanding even a gradual rate of unwind.

  • John

    https://uploads.disquscdn.com/images/46d7f4ad134c35f8361549f4007b45587f776b6d5b55dbd09ae48ca621dd74b9.gif

    “Within the BEV each new all-time high is registered as 0.00%, and never more; in BEV lingo, new all-time highs are called BEV Zeros. In the BEV a price series can only decline down to its -100% line, as a 100% decline is always a total wipeout in valuation. Basically, a BEV plot compresses price data within a 100% range, 0.00% are new all-time highs, -100% for a total wipeout in valuation…”

    ” The 200 count is easy to understand; it’s the number of Dow Jones 2% days, days of extreme volatility contained within a running 200 day sample…”

    ” …since 1960 the Dow Jones has only twice seen 40% declines, but volatility has increased to where its 200 count easily increases to over 40….”

    “The Dow’s 200 count is currently at zero, a level that since 1972 is not a long lasting condition.”

    http://www.gold-eagle.com/article/bear-market-volatility-200-count

  • John
  • John

    The latest “melt-up” in perspective.

    https://urbansurvival.com/wp-content/uploads/2017/12/f1-2-450×276.png

    LOL–this would probably get the orange one’s disapproval. No I am not a Democrat sycophant, or Obama admirer. Like I mentioned earlier we will probably see charts in coming years comparing the Trump market to others of southbound fame. Life is like that.

  • Kim

    There is so much fraud and debt in the system that it’s impossible to forecast anything based on so many dubious and outright phony metrics.

    Metrics, numbers, algos aside, the debt alone (expanding it with impunity) shows this is no real market- just deficit spending, expansion of debt as far as the eye can see. As long as they can continue to expand and extend debt at >0% interest, this will continue. Period.

    At the risk of sounding pessimistic, almost everything we are exposed to on a daily basis is fake. From fake news to fake food, fake economy, fake politicians offloading their daily supply of lies and debauchery, fake religion, fake relationships, endless fakery, we have become accustomed to it.

    The good news is that fakery has finally been exposed for the world to see. The bad news is the world tolerates it for a price, so it’s business as usual.

    You say “we”, or they didn’t learn anything from the past economic crashes, but I don’t agree with that. They learned a lot. They learned how to game (rig) the economic system to address any legit, healthy and normal market pullbacks by employing media, political and central bank quid pro quo manipulations and outrightlawlessness.

    I believe that the depth of the economic fraud in this system is deeper than any of us here can imagine, let alone forecast. Admitting this is not wrong or gloomy, doomy, rather it’s facing reality. Facing this reality is exhilarating because it’s the one true way to have a shot at survival when it does falls apart.

    There are so many unknowns, white swans, black swans, and because of the plethora of unknown unknowns, I believe when it does crash, it will, ironically, take us all by great surprise.

    I hope you never stop writing this blog. In fact, I would like it if you would write more because I’ve learned a lot from reading this blog, so thank you.

    Happy new year.

    • I think you are right on all of that, Kim. The politicians, Wall Street and the Fed have perfected their skills in manipulating the economy and minds through a the media as their willing partner. That the media can be so brazenly fake and keep getting away with doing it for so long (in the sense of keeping their audience) makes me feel like I am now living in a mirage.

      Like you, I don’t feel that I am being overly doomy and gloomy. I think things really are as corrupt as you describe, but if I my predictions overstate the doom and gloom in terms of how fast and how greatly and in what manner things will fall apart; then they’re not helpful. I have no tolerance for religious false prophets, and I certainly don’t want to be a secular false prophet either. So, if my predictions are wrong, I need to reel myself back. Up until recently, they have been on the mark enough that I have felt they are helpful. I’m not sure that last year’s predictions will prove wrong, as I never did believe the stock market would fall apart until January; but Trump has change the picture for the stock market and economy a lot, just as such a huge number of major disasters changed the picture a great deal for the housing market and auto markets where I thought things would fall apart most obviously and even generally for the economy as it all sends a lot of people packing to Home Depot for a heck of a lot of replacement stuff.

      Thanks for your encouragement.

      • Kim

        Yep, there are extremely powerful forces both seen and unseen that are highly invested in keeping this monster on life support. Who are you to interfere with the plans of gods?

        Make sure you don’t miss the whole forest for the individual trees. If you are off by a year or two I would say that is pretty accurate given how long this system has lasted already.

        Also, it has an infrastructure that has stored up potential momentum and thus keeps moving (operating) even after the machinery has failed. Right now it is kenetic energy that is moving this rigged system along like a giant ship on the lonely ocean. We know how that story ended.

    • Auldenemy

      Brilliant response Kim! I always enjoy and appreciate your very intelligent and incisive comments.

  • Auldenemy

    If I ever had one criticism of you David it is that you ever bet against your own blog! You are far too good a writer to ever stop blogging. I only ever made one prediction, back in 2015 when that idiot Andy Hoffman was endlessly ranting about an imminent stock market crash and how everyone should load up on gold and silver (no surprise that he was working for a bullion company and always using Gold and SilverSeek to plug the company he was paid to plug). I refuted Hoffman’s insistence that the S&P500 was about to keel over. I did so because of reading up so much on QE, ZIRP and NIRP and how CB policies had acted like raising agents on the stock markets of all major nations. My conviction that no such crash was imminent was most of all founded on the words of an ex Fed member who stated that QE had, quote, ‘Front loaded the stock market’, acting like, ‘Heroine’ on it. The low to zilch interest environment also of course encouraged massive buybacks and pushed savers into stocks (any traditional saving methods producing no interest and in fact losing value due to inflation). I also read about how CBs interact with one another (when the S&P500 took a massive dive in January 2015 it suddenly reversed course on 12 February after the Fed Chair had phone contact with both the BOE and the BOJ). So I am certain that CBs bolster not only their own fake stock markets but one another’s! The fact that the Swiss CB has bought massive amounts of USA stocks is another indication of this.

    So my prediction was that the fantasy stock bull would continue and so far it has done exactly that. Your predictions were made on the basis of truth v fiction, what you didn’t take into account was the power of our corrupted West to maintain the fiction at all costs. It is now surely glaringly obvious that first of all Banksterville looted the West (the bailouts with every citizen made liable for them, apart from the elite parasites responsible for the mess), and having got away with that they have done everything to rig so called, ‘Free markets’ so as to grow the wealth of the few at the expense of the many.

    As to the idiot Hoffman, he started plugging BitCrap on his blog which is no doubt what cost him his job. He now has his own, paid for subscription service (so he can continue to boast and admire himself in the hope that some idiots will pay for him to do it!). There are Hoffman’s everywhere in the alternative media financial/economic/political space, but there isn’t another David Haggith. Your huge intelligence and perception is needed. If you bet your own blog against your predictions and they don’t pan out to the timing you have imposed upon yourself, thus you stop writing, then you are leaving a space that needs your eye, your perception, your integrity and your honesty focused on it. I implore you never again to bet against your brilliant blog site.

    • I definitely won’t again bet my blog. I did last year, though, because my predictions were quite dire, and I figured that, if I’m wrong, the world doesn’t need more doomsayers. If I’m right, then, yeah, they need to hear it whether they are willing or not. But if I’m not, why add to the darkness.

      I think you’re right in all of your analysis above. One other area where I erred was in all my statements that the Fed was holding things together long enough to try to keep Trump out of office and get Hillary in because they saw him as a threat to their program — a loose canon — as well as a threat to Yellen. I figured they would let their failed recovery fall apart on his watch so that he could be the fall guy for their failure. However, they have continued to hold their failed together, and interestingly Trump has made that possible because, just as they pull back their QE, Trump is inserting an equal amount of cash into the economy by taking it out of the pockets of government and putting it into the pockets of corporations so they can keep up the ruse of bidding up their own stocks.

      • John

        The Fed can and has capped longer term rates on gov’t debt. Train wrecks will happen–but don’t be too hard on yourself, as there is no telling when they will happen when cheats and charlatans are calling the shots.

      • Auldenemy

        On Zero Hedge today there is graph pointing out that the S&P500 has had 14 months of continual growth and apparently that has never before happened in its history! There is another graph showing how all major nations stock markets have risen in line with massive gobs of CB liquidity (QE). Those two graphs alone are surely proof that the West now has completely manipulated, fake stock market bulls that are simply benefitting a parasitical elite.

        You were never a Doomster like Hoffman and certain others. Your articles are always highly rational and vastly more intelligent than the majority of those who write in the alternative media on financial, economic and geo-political matters. So what if you got it wrong about Trump (thinking the Fed and Banskterville in general would use his election to tank the fake stock market bull they have created, in turn hoping Trump would be blamed for it). Personally I didn’t expect that to happen for the simple reason that greed has a nasty habit of triumphing over common sense (let alone any moral considerations). There are too many powerful entities seeing their personal wealth go through the roof thanks to the Fed – and others CBs – post 2008 policies. Those entities don’t care if Hillary, Trump, Mickey Mouse or the Easter Bunny is President. All they care about is maintaining the status quo, which for them begins and ends in

        • Thanks, Auld.

          Just for clarification, I wasn’t thinking in the past that they would crash the system in order to take Trump out. I was thinking they were doing all they could to keep the system going for the sake of getting a more reliable establishment candidate (Hillary) in. From there, I figured they would be unable to keep their mirage running through Trump’s first year so that, if they were going to give up on a losing battle, that would be the place to do it. So many people hate Trump so much that it would be easy to throw all the blame on him and get the vast majority to believe them, saving themselves from everyone seeing that their recovery had simply failed. It would be presented as Trump bombed it again and again with all of his erratic behavior.

  • John
    • Kim

      Carli Fiorina has a lot of room to talk after what she did to Hewlett-Packard (ran it into the ground).

      I agree No 5. will be huge: The US govt.

      What better man could guide the US through bankruptcy than the bankruptcy king himself?

      • John

        “Atlantic City fueled a lot of growth for me,” Mr. Trump said in an interview in May, summing up his 25-year history here. “The money I took out of there was incredible.”

        Well now who is he takin’ it from?

        https://www.nytimes.com/2016/06/12/nyregion/donald-trump-atlantic-city.html

        “He [Trump] repeatedly emphasized that what really mattered about his time in Atlantic City was that he had made a lot of money there…”

        “People underestimated Donald Trump’s ability to pillage the company,” said Sebastian Pignatello, a private investor who at one time held stock in the Trump casinos worth more than $500,000. “He drove these companies into bankruptcy by his mismanagement, the debt and his pillaging.”

        • That article is a microcosm of America for sure. Trump has spent his life as a man with no principle higher than whatever works best for himself.

          • Kim

            Trump is certainly out in the open about who he is. I do however believe that he believes some of his own rhetoric. Does that mitigate his narcissism or does it just make it palatable.

            I guess what makes him stand out is his public display, but deep down he is no different from any of the other hundreds of charlatans that dot the DC and Wall St landscape.

            I don’t believe in the Russian collusion story and even if it were true (yeah the Russians helped reveal the utter disgusting nature of the DNC, John Pedo Podesta and the rest of the spirit-cooking gang) it doesn’t matter, because I believe that the American people rejected Hillary Clinton in 2016 because of who and what she is. That horse has been beaten to death.

            How come the NYTs article didn’t touch on the real source of Trump’s wealth? I wonder

            • I think if someone is clinically a narcissist, as I believe Trump is, they are always open about who they BELIEVE they are. Since it is all about them all of the time, it is always about who they are (who they think they are in their own mental construct of themselves). So, I don’t think it mitigates his narcissism as it is so much just how narcissism works.

              So, in Trump’s case, so long as whatever he does is within what the law allows, it doesn’t matter how many people get hurt. If he won, he’s great; they’re fools, and that’s there fault. Such is the nature of feeling with a superior being. He plays a better game, and you lose.

              I enjoy seeing him tear into the media because it really is false, but it’s kind of like enjoying watching a dog fight. There is really no “good” side. It’s just two vicious animals tearing each other apart and us watching the spectacle!

              Agree with you on the Russians. If the story is true that they were involved, they did us a favor by exposing Hillary and the DNC. I’m far more concerned about the corruption they exposed than about the fact that it was Russians that exposed it.

              What is the real source of Trump’s wealth? (In my view, it started with inheritance and grew by being the consummate snake-oil salesman to his business partners and the public and snake (bankster) charmer to his financiers. I’m fine with him outsmarting his financiers, not so fine with all his failures and all the carnage he leaves in his wake without a shred of remorse for any of it.)

            • Kim

              I read that he raked in over $100 million from the Apprentice. I think that’s why he won’t release his tax records – because the source of his income in the last 10 years has been from a tv show and not some big fat real estate deal(s).

              I don’t disagree with your assessment of Trump. I think they’re all alike.

            • Oh, I see what you’re getting at. The only honest money he’s made is as an entertainer.

            • Kim

              The irony kills me.

            • John

              You know what PT Barnum said.

              I’m sitting there watching MSNBC and these clowns are going through the latest “dying NY Times” interview with highlighters and I am thinking he has them all right where the man who is greater than any big-time CPA wants them!

              The “entertainment” of a market crash will make Mueller a footnote. Trump will be like Hoover when he tried to borrow a nickel to call a friend and Mellon said, “here’s a dime, call both of them.”