On 24 october 1929 the stock market on Wall Street crashed, and chaos and a ten year depression followed, will the same happen again? Will this happen on 24 october 2012? http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929 If this happens it will affect the elections that are held within two weeks after this crash. Economics, stock exchange are ways to change/influence politics, means cause chaos and cause a higher voter turnout, means who controls the money gains power from it (banksters, politicians, rulers, establishments, etc) Romney will gain from this, because Obama will be accused, this is how Romney can get a very high amount of votes (because the people want a solution, and the solution will come, and fast, next year 2013 the economy will stabalize and you will be euforic masses (lots are going to stand as one behind (at that moment) 'their' president, 'their' leader) You can already figure out what can happen, because it happened before in history (24 october 1929)
Of course not. Global markets are faltering due to continued uncertainties in Europe, anemic growth in China, and inadequate economic improvement in the United States, yet the likelihood of a stock market crash is slim to none.
No one knows. Anyone who says otherwise is either delusional or lying. When you're discussing something that has such inherent randomness, you're better off talking in terms of probability distributions or confidence intervals as opposed to "yes" or "no" answers. Crashes are statistically very rare but they tend to occur when they are least expected. There is currently nothing that would suggest a crash is imminent. So the probability of it happening isn't very high - but it's also not zero.
I agree.... It will likely start after a failed treasury auction then deteriorate rapidly. Anybody trying to predict anything by giving a specific is out of their mind.
Building upon this statement, I would like to make an inquiry. What is the probability/likelihood of a failed Treasury auction? Not only would an auction gone awry lead to market faltering, but also augment the risk of sovereign debt default.
I think it is very likely and almost a certainty at this point. The only way to encourage buyers is to raise rates. That can't happen. All the toxic exotic debt instruments that led up to the housing crash are still resting on the banks balance sheets which is why the FED has announced they are spending 40+ billion monthly buying MBS. The banks and the FED know that the end is near. That is why they are specifically taking these securities off the banks balance sheets and transferring the liabilities to the FED.
Even former head of the NY FED recently said the same thing. When Romney a couple weeks ago was asked about our debt his response was: Romney: [The] former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we're issuing—which they've been doing, the Fed's buying like three-quarters of the debt that America issues. He said, once that's over, he said we're going to have a failed Treasury auction, interest rates are going to have to go up. We're living in this borrowed fantasy world, where the government keeps on borrowing money. You know, we borrow this extra trillion a year, we wonder who's loaning us the trillion? The Chinese aren't loaning us anymore. The Russians aren't loaning it to us anymore. So who's giving us the trillion? And the answer is we're just making it up. The Federal Reserve is just taking it and saying, "Here, we're giving it." It's just made up money, and this does not augur well for our economic future. You know, some of these things are complex enough it's not easy for people to understand, but your point of saying, bankruptcy usually concentrates the mind. The warning signs are there. Just like the run up to the dotcom and housing bubble when people such as myself were warning of the bubble being created. This time it is the largest bubble of them all. The debt bubble. This is much much worse. Instead of doing the right thing back in early 2002 we lowered rates creating another bubble. This time the wealth was sucked out of retirement and equity buildup in homes. That is all gone. That is why the even lower rates are doing nothing. People are in debt, broke and the banks are too scared to lend because of the uncertainty. We are in limbo just waiting for the next shoe to drop.
The probability of a stock market crash over a failed Treasury auction is dependent on one crucial factor: the demand for Treasury securities. Underlying this demand is the risk on investment. One of the main reasons for the deficit and debt debacle this past summer was not simply the amount of sovereign debt on the balance sheets, but the increase of what little risk a Treasury securities had as banks form complex derivatives with them, and leverage upon such financial products. The main reason for such is due to the extent at which individuals, households, and business are in debt. While these economic agents liquidate, banks need to find another source of profit, that being the Treasury securities market, an asset in of itself that generates risk-free financial gains, yet not enough to recuperate banking losses. As a result, the failure of a Treasury auction necessitates the perception from our creditors that the financial assets we provide them are worthless, the financial assets are too risky of an investment, or a combination of both.
I'm not extensively-versed in the Euro issue, but if Europe plunges, America will too. America itself isn't that stable, having weathered a nasty recession. The system is robust, but even the best system will collapse if it keeps taking "hits". It's always a possibility that another Depression can occur.
