STOCK MARKET DOW DOWN -545 > 2.12% Investors on SUICIDE WATCH!!

puffed plastic fail

The DOW has been going straight up for the last 10 years. It has always been cyclical, even if recent history hasn't show that.

I wouldn't be surprised to see it go down 5000 points or more.

More like half, imo return to 2007-08 peaks.

Here is a article demonstrating corporate stock buybacks and the impact of debt. Debt which is one of many held by citizens, govvernments, and corporations. Just another way for markets to continue to be propped up with unsustainable measures.

[link to seekingalpha.com (secure)]

In recent years, US stocks have been pumped higher and higher as investors and companies have enjoyed an orgy of debt. By any valuation measure you care to take, US stocks as a whole look expensive. But is the market's debt orgy now reaching its climax? If so, it makes sense to play it safe and use protection.

On Tuesday, the new Fed head, Jerome Powell, said policymakers may have to raise US rates during 2018 more than the three times that were previously expected.

With that backdrop, I'll focus on a couple of specific risks facing pricey US stocks. These are debt-funded stock buybacks and the record level of margin debt currently being used by traders.

According to investment bank Goldman Sachs, stock buybacks for companies in the S&P 500 are set to reach $650 billion in 2018. That's up from $527 billion in 2017, $550 billion in 2016 and $589 billion in 2015.

The first big problem with buybacks, and something they have in common with corporate acquisitions, is that companies tend to do most of them at the worst possible times. That is, companies buy the most stock when it's highly priced and the least when it's cheap.

Clearly, buying at the top of the market is throwing money down the drain. But it's done to goose up earnings per share (EPS) growth figures. Financial engineering of this type is easier than actually growing the underlying businesses. It also transfers value from outside shareholders to corporate insiders, since a lot of the stock purchases end up in insiders' hands.

Even worse than that, there's a big link between the amount of stock buybacks and how much new debt the companies take on. Cash flows aren't sufficient to cover all of the cash needs, including dividends, capital expenditure, acquisitions and buybacks. Debt is typically used to make up the difference, as shown in this chart from 1990 to 2015.

This makes for a pretty toxic combination. Buybacks are mostly done at the worst time, when stocks are pricey, and using debt, which adds to corporate leverage and increases financial risk.

Which brings us on to the next problem. US corporations were by far the biggest buyers of US stocks in recent years. In fact, since March 2009, they've outstripped the only other large buyer, mutual funds and ETFs, by a factor of two. That's shown in the next chart of cumulative purchases (or sales) over time.

Warren Buffett released his latest letter to shareholders of Berkshire Hathaway (BRK.A, BRK.B) on Saturday. It's always on my personal required reading list each year.

In the letter, Buffett reminds us that investors should never borrow money to buy stocks. That's a view I totally agree with, and it's particularly relevant this late in a long bull market.



As he puts it: "There is simply no telling how far stocks can fall in a short period." That's when leveraged investors become forced sellers.

[link to fortune.com]

It was an even worse showing than during the February 8 selloff, when 18 S&P 500 stocks came out in positive territory—a potential sign that as this long bull market gets closer to its 10th birthday, the stock market’s survival rate is declining.

It was a panic reminiscent of other October market crashes, both in 2008 and 1987: Of the Dow’s overall drop, more than 100 points were lost just in the five minutes before the market closed. It was the worst drop since February 8, when the Dow fell 4.1%.

Every single stock in the Dow was down Wednesday. In the S&P 500, only 17 stocks managed to eke out gains for the day—largely recessionary favorites like Dollar Tree (up 1.7%) and Dollar General (up .5%), J.M. Smucker and General Mills (each up about 1.5%), and Campbell Soup (up .5%). (The day’s big winner was generic drugmaker Perrigo, which rose nearly 2% after naming a new CEO earlier this week.)

If I may remind you folks, my thread that you all scoffed at...

Thread: Stock Market Crash after 8th October 2018

Get the fuck outta the way Bull shits!!

It’s Bear time!

Stock market dropped because the fed raised interest rates. But a bigger concerned in mid term elections. If democratic win the house they want to resend The tax cuts , impeach trump, shut coal mines down, shut oil and gas industry down, open borders,keep unfair trade deals and not work to bring manufacturing back to US.
If democrates take the house and senate the economy will collapse. If republicans keep the house and senate the economy will flourish.

I love financial DOOM.

All China stocks are -4%-5%.

The stock market really is not our problem, our problem is believing investing in stock will keep you safe. Better to do local investment, like bonds the ones that are tax free.

When they over do things it because it is planned, nothing else, except for the few who are not connected to the top. All others are usually gobbled up by the top dogs during a crash.

The Federal Reserve system brought this about in their creation, it is criminal in it's makeup. You would have never had a crash except for the group who wanted it in the first place. They started the Gold bank rush back it the 1880s and cause a depression at that time, it was the build up to the group putting this illegal system in place, no it was never ratified they are not part of the gov..They are private with partners. They control Wall Street it a fixed place for the top dogs, unless a top dog goes again the other top dogs.

When you see the evil of their system, get out of it. You could be helping yourself and your state with funds, or working to get solid money back into the country!


Inflation, deflation is to either take or crash you, it to keep you on a rope. Some people run after the the spray painted ring of this group instead of going after them, which should have happened after the 1980s crash. It never hurt me during those years, only people with their money in the blasted thing.. The country did fine when it was based on the constitution and it was written only congress can coin money and it scaled with weights and measure so, if you can not fight for what will save the country, you deserve to lose it all. Wall Street top dogs need to lose it all.

Get your tomatoes in and fry them.

im really worried that this will effect the midterms will it?

Basically. When the shit really goes down, the midterms won't mean shit, just like they do to me today!

so the mid terms arent effected? your saying.

Fried tomatoes will probably not affect the midterms.

Why u mad bro? Bears are necessary for a properly functioning ecosystem. What goes up must eventually come down and what goes down always bounces back up. Simple logic mad bro.

oh ok then chinas got some explaining to do.

this powel guy is an expert in dissolving banks correct me if im wrong but that's what he did prior to being fed chief

then hes a genius.

Down by 900 points is nothing. This thread is a big fat nothing burger.

I hate to spoil the DOOM party, but isn't this just one part of the cycle?

Martin Armstrong has been calling for this all year. Basically, the correction could be soft, but more likely, he expects a really hefty "correction." It will be called even a crash.

But then, like the phoenix rising from the ashes of the deepest down day, it will bounce. And bounce fast and hard.

Long story short, he sees DOW 40k by 2032.

This is quite an explanation as to what is going on....

Futures another 1000 points down today per ZH

Trump probably wishes he had kept Yellen. 19 out of a 100 credit rating guy.

Putin wants the Dems to win because he knows the Democrats
will bring the Country to ruin.

Trump pissed off so many women. Putin didn't do that.

Your prediction was a 30% or so stock market drop, on October 8th on shortly after.


We are still far from 30%, but even if it will drop 30% by next Tuesday, you were still right.