Results 1 to 11 of 11
  1. #1
    Thailand Expat David48atTD's Avatar
    Join Date
    Jan 2016
    Last Online
    Today @ 05:15 AM
    Location
    Palace Far from Worries
    Posts
    7,792

    Crash of '87: What have we learnt and could it happen again?

    .
    30 years, to the day, since the BIG crash happened.

    .


    Ah ... the good old days of a physical 'Trading Floor'


    History does not necessarily repeat and when it does, it is not always as farce. But a quick look at the events leading up to stock
    market crash of '87 is more than a little unnerving.



    Key points:


    • The current bull run is now three years longer than the lead up to the 1987 stock market crash
    • Investors are bidding up new leveraged products, which could have the same impact as the derivative-driven crash of 2007
    • Interest rates are heading up, just as they did before October 1987




    So what is different this time?

    But there are some significant precursors missing as well.
    In the week leading up to the crash, US legislators decided to reverse the generous tax deductibility for interest costs incurred in takeovers.



    What are the big risks this time around?

    There are plenty of potential risks lurking in the market, not the least the fairly frothy valuations of the market, particularly in the US where Wall Street is hitting record highs virtually on a daily basis.
    Then there is the 2017 version of taking the punch away, the winding up of the Fed's multi-trillion dollar money printing enterprise — also known as quantitative easing.
    It could have a similar, if not as sudden impact as the 1987 tax changes.



    Are leveraged ETFs the new weapon of 'mass financial disaster'?

    Mr Murphy's concerns centre on the latest trick in the ETF world, leveraged ETFs.
    Leveraged ETFs have grown rapidly since 2014. There are now more than 170 being traded, with billions of dollars parked in them.
    The leveraged ETFs amplify the movements of the investment they track — most commonly by 200-to-300 per cent.



    Could a hawk become a black swan?

    Mr Murphy is not about to fold his tent and back out of the market just yet, but he is wary.
    He is watching the moves at the Fed with interest, noting that the Trump White House is not that against finding a "hawk" to replace Janet Yellen, similar to to the appointment of Alan Greenspan 30 years years.



    The full article is here

    Related article is here

    “Someone is sitting in the shade today because someone planted a tree a long time ago”

    .

  2. #2
    Fresh Seaman CaptainNemo's Avatar
    Join Date
    Sep 2009
    Last Online
    18-02-2018 @ 04:17 AM
    Location
    in t' naughty lass
    Posts
    5,408
    There seem to be a lot more risks of some sort of correction happening over the next few months.

    A lot of unresolved chickens coming home to roost that are legacy issues from the New Labour period - unprecedented immigration/ethnic cleansing has exacerbated the wealth gap - yielding ponzi scheme-like benefits to the middle class with inflated house prices because the demand exceeds not just supply but rate at which supply can be delivered; and kept wages low and opportunities swamped by entire ethnic groups, and kept rents high at the unqualified and working class end, who now have to routinely live in debt - often credit card debt - payday loans - and debt relief orders. None of this is sustainable, the majority of the country is vulnerable to financial shocks.

    The market is seizing up as fewer and fewer (young) people are able to access the market. This is dangerous as if they have no stake in the country, you get increased brain drain by those who can; and increased lurches into anti-capitalism and unrest by those who can't. It's all harmful to society and the economy.
    Attempts to try and enable access to the market for new entrants and undermine the buy-to-let (another issue, prompted by the repeated high-profile failure of pension funds) have not helped at all
    https://www.mortgagestrategy.co.uk/g...y-let-changes/

    The seaside towns hit by a rising tide of debt - BBC News
    Middle class borrowers sitting on a £198bn debt timebomb | This is Money

    In the UK, around half of mortgage owners are vulnerable to an interest rate rise https://www.thetimes.co.uk/article/h...rise-5xwrhglwp

    Not just the impending rate rise itself, but the prospect of it and further ones can send a chill rippling through the economy as people start to feel the need to brace themselves and wait.

    There's now talk of the government extending SMI to step in to pay mortgage interest because it's cheaper than millions of sudden mortgage defaults and housing benefit applications.

    So... between now and April, eyes are on this issue... immigration is only part of the problem, and that is being resolved by Brexit; but the other part is the unrestrained access to credit.
    If mortgages are restricted to no more than 4 times income; if foreign ownership and multiple-home-ownership is subjected to high tariffs and business rates to make it unattractive; if rent controls are effectively introduced by freeing up councils and housing associations to take loans and invest in buying up and refurbing dilapidated housing, and extending "affordable" rents to be within a similarly low threshold, particularly for "key workers", then that might help, but there are perhaps around 5m too many people in the country and a whole tranche of people sitting on capital that is only higher due to this mass immigration and increased student numbers/btls (converting 3-bed family homes into HMOs for students and itinerant workers) - the tide rising over the last 20 years (about double in places I know).

    The inflated land prices are affecting every price for everything, from train fares to supermarket prices, and utility prices. You only get the price of land corrected by reducing demand for it... and that comes down to numbers of people, mainly. You can't deport your worst natives, so you have to invest in them and raise them up, not replace them or ethnically cleanse them as the treacherous grasping sanctimonious puritanical middle-class left would like.
    Last edited by CaptainNemo; 22-10-2017 at 03:48 PM.
    http://www.youtube.com/watch?v=H1F2i0rYMj8

    we are all figments of our own imagination.

  3. #3
    ความรู้ลึกลับ HuangLao's Avatar
    Join Date
    Jun 2017
    Last Online
    @
    Location
    สุโขทัย
    Posts
    6,017
    Wealth, economies, and development is false.

    More than just a broad fantasy.

  4. #4
    Days Work Done! Norton's Avatar
    Join Date
    Oct 2007
    Last Online
    @
    Location
    Roiet
    Posts
    29,838
    Quote Originally Posted by David48atTD View Post
    could it happen again?
    Certainly. Just a matter of when. Program trading was the primary cause. Still used and as in '87 will be again the primary cause.

  5. #5
    Fresh Seaman CaptainNemo's Avatar
    Join Date
    Sep 2009
    Last Online
    18-02-2018 @ 04:17 AM
    Location
    in t' naughty lass
    Posts
    5,408
    Quote Originally Posted by HuangLao View Post
    Wealth, economies, and development is false.

    More than just a broad fantasy.
    Do you even know what you mean?

  6. #6
    Utopian Expat Chittychangchang's Avatar
    Join Date
    Nov 2013
    Last Online
    @
    Posts
    13,393
    The most recent credit crunch depression was back in 2008.

    The financial crisis of 2007–2008, also known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.[1][2][3][4]
    It began in 2007 with a crisis in the subprime mortgage market in the US, and developed into a full-blown international banking crisis with the collapse of the investment bank Lehman Brothers on September 15, 2008.[5] Excessive risk-taking by banks such as Lehman Brothers helped to magnify the financial impact globally.[6] Massive bail-outs of financial institutions and other palliative monetary and fiscal policies were employed to prevent a possible collapse of the world financial system. The crisis was nonetheless followed by a global economic downturn, the Great Recession. The European debt crisis, a crisis in the banking system of the European countries using the euro, followed later.

    The UK still has not fully recovered.


    From what i heard this didn't effect Australia at the time because of their strong exports.

  7. #7
    Thailand Expat cyrille's Avatar
    Join Date
    Oct 2006
    Last Online
    Today @ 09:32 AM
    Posts
    16,149
    Quote Originally Posted by Chittychangchang View Post
    The most recent credit crunch depression was back in 2008.

    The financial crisis of 2007–2008, also known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.[1][2][3][4].
    Yeah, good spot.


  8. #8
    Thailand Expat David48atTD's Avatar
    Join Date
    Jan 2016
    Last Online
    Today @ 05:15 AM
    Location
    Palace Far from Worries
    Posts
    7,792
    Quote Originally Posted by Chittychangchang View Post
    The most recent credit crunch depression was back in 2008.

    The financial crisis of 2007–2008, also known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.[1][2][3][4]
    It began in 2007 with a crisis in the subprime mortgage market in the US, and developed into a full-blown international banking crisis with the collapse of the investment bank Lehman Brothers on September 15, 2008.[5] Excessive risk-taking by banks such as Lehman Brothers helped to magnify the financial impact globally.[6] Massive bail-outs of financial institutions and other palliative monetary and fiscal policies were employed to prevent a possible collapse of the world financial system. The crisis was nonetheless followed by a global economic downturn, the Great Recession. The European debt crisis, a crisis in the banking system of the European countries using the euro, followed later.

    The UK still has not fully recovered.


    From what i heard this didn't effect Australia at the time because of their strong exports.
    It affected our Stock Market.

    One trading Day/Night, I dropped $64,000 ... still having therapy.

    Killed me financially.

    Now I don't even own $64,000 in Shares/Stocks.


    One way it did was in global credit.

    I invested (heavily) in a Financial IPO - RAMS.

    Previously, it found it easy to get overseas funding, but with the GFC came the credit crunch.

    Funding dried up, share price crashed ... I held on too long ... my bad.

  9. #9
    Thailand Expat
    hick's Avatar
    Join Date
    Nov 2016
    Last Online
    23-01-2019 @ 04:19 PM
    Posts
    5,278
    Just think it's interesting:

    Attached Images Attached Images

  10. #10
    Thailand Expat jabir's Avatar
    Join Date
    Jul 2016
    Last Online
    @
    Posts
    8,516
    Quote Originally Posted by David48atTD View Post
    It affected our Stock Market.

    One trading Day/Night, I dropped $64,000 ... still having therapy.

    Killed me financially.

    Now I don't even own $64,000 in Shares/Stocks.


    One way it did was in global credit.

    I invested (heavily) in a Financial IPO - RAMS.

    Previously, it found it easy to get overseas funding, but with the GFC came the credit crunch.

    Funding dried up, share price crashed ... I held on too long ... my bad.
    Nose to screen, finger on sell button, never trust the fockers!

    I had a close call with London Pacific, rode it up from £3.70 to £19, instructed broker to sell at £20 and went on trip, fortunately returned early to learn it had hit £19.70 before crashing to around £15; had I returned on schedule it would have been around £10...eventually dropped to 0.5p.


    PS: PTG is close to target and probably not worth entering unless it breaks out, but AQUA is triffic value.
    Last edited by jabir; 23-10-2017 at 06:08 PM.

  11. #11
    Your local I.Q. Monitor
    Hugh Cow's Avatar
    Join Date
    May 2015
    Last Online
    Today @ 11:46 AM
    Location
    Qld/Bangkok
    Posts
    2,188
    In answer to your question. No and Yes

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •