Global Stock Market Crash Goes Wild As Fed Goliath Dies
By David Haggith
GoldSeek.com
Wednesday, 13 January 2016
As stock markets all over the globe start the week with more cliff diving, following their worst opening week in history, I’d like to take this opportunity to jam my finger in the central bank’s eye. The Federal Reserve’s recovery plan — which I’ll call “Goliath” because of its giant monetary expansion — is now dying. Its obituaries are quickly hitting newspapers all over the world.
Even as markets struggle to catch their breath, the amount of chop is extraordinary: first a hundred points above the line, two hours later a hundred points below, and then finishing barely above. Stock markets yesterday and today look like boats bouncing across a choppy bay. Even the Fed appears to doubt how well it saw the storm that is developing out of its own plan, and a few of its rats are jumping ship.
What is by far most notable is that forecasts of more gale force winds during all this upheaval are no longer relegated to bearish blogs like mine. A whole chorus of moaning bulls has joined the growling bears in just one week’s time, including two Federal Reserve officials who helped create the recovery plan. Let me pull out a few potent examples from unlikely places to suggest whether or not the global crash is going to rage on.
Suddenly, forecasts of doom and gloom are everywhere
Says MarketWatch,
Market bears roared last week. What now? Chart watchers have offered up predictions on what’s next for US stocks after assessing the damage from last week. The drop ranked as the worst five-day start to a year ever for both the S&P and the Dow Jones Industrial Average. Is it time to jump back in, especially if the market rebounds this week? Don’t plan on that technical analysis suggest.
Even the normally bullish JP Morgan says,
Our view is that the risk-reward for equities has worsened materially. In contrast to the past 7 years, when we advocated using the dips as buying opportunities, we believe the regime has transitioned to one of selling any rally…. Clearly, equities are unlikely to keep falling in a straight line, with periodic rebounds likely. However, we believe that one should be using any bounces as selling opportunities.
In other words, Get Out! Yes, JP Morgan is stating openly that it is shifting now away from its seven-year bullish position. JP isn’t the only normally bullish massive organization joining the prophets of doom and gloom by saying, Get out quick:
The Rest…HERE
