vincecate wrote: Wed Jul 21, 2021 2:35 pm This market is crazy. Don't think it can stay crazy 3 more months. Will see.
Ten years ago, the stock market made a secondary high in late July (July 21), similar to the monthly pattern this month, then crashed on the downgrade news.
As we know, Ben Bernanke and those who followed him wanted to see how bankrupt they could get it before it collapses.
https://money.cnn.com/2011/08/05/news/e ... /index.htmAMERICA'S DEBT CRISIS
S&P downgrades U.S. credit rating
By Charles Riley @CNNMoney August 6, 2011: 8:13 PM ET
NEW YORK (CNNMoney) -- Credit rating agency Standard & Poor's on Friday downgraded the credit rating of the United States, stripping the world's largest economy of its prized AAA status.
In July, S&P placed the United States' rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.
To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.
In its report Friday, S&P ruled that the U.S. fell short: "The downgrade reflects our opinion that the ... plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed." (FAQ: Behind the downgrade)
A Treasury Department spokesman pushed back on the rating change, saying that S&P's analysis was flawed.
A source familiar with the matter said S&P initially miscalculated the growth trajectory of the nation's debt, and then went ahead with its downgrade anyway.
The source also said S&P didn't give enough credit for the debt-ceiling compromise, which paved the way for more than $2 trillion in spending cuts over the next 10 years.
However, one of S&P's explicit criticisms of the compromise was that it didn't address the biggest drivers of the nation's debt -- Social Security and Medicare -- and didn't allow for additional tax revenue. ("What's wrong with the debt ceiling deal?")
John Chambers, Head of Sovereign Ratings for S&P, told CNN that though S&P didn't have a specific target in mind, the total debt reduction package was not sufficient. Chambers also noted that the plan did not take steps in the near term to boost economic growth.
This quote (mannfm11 - April 11, 2009) will perhaps be very applicable in the coming weeks.
I would add that advocating comparing stocks to treasuries, in addition to the points made in the paragraph above, is saying it's appropriate to invest in something that is in a huge bubble because something else is also in a huge bubble.mannfm11 wrote: Sat Apr 11, 2009 3:00 am
I'm not going to read much of this because there is a lot of chasing rabbits down holes. The Fed reports the monetary base because that is the amount of liability the Fed has to the system. The mess is the fact that private credit can't expand any more on a normal basis and it has little or nothing to do with PE's and other crap that is being talked here. The governments really can't sustain anything and Bernanke wasn't born smarter than 99.9% of all people, maybe not over 50%. People are in positions like this for reasons other than brains. In any case, his philosophy is that if something is bankrupt, you might as well see how bankrupt you can get it before it collapses. Irving Fisher was wrong about the economy when the depression started and he was wrong about what caused the depression. The only way they are going to stop a deflationary depression is to create a Weimar Republic in the US. There are more noses cut off in the ditches of leadership around the world than can be counted. We have global warming supposedly, which is probably another attempt of governments to gain control of and brand their people like they are cattle and they are going to do something about it, but in the meantime they are going to put out stimulus packages that make certain that as much in the way of pollution and destruction of natural resources as possible goes on. We are going to solve an insolvency problem with an even greater insolvency. We are going to take 3% dividends on stocks while the corporate bonds of most stocks are paying 10% to 15%? Some group of academic idiots seems to believe that you are supposed to compare stocks to treasuries. I am glad they don't raise livestock because they would put female pigs in with bulls and cows in with boars. There are 900 million miles between what is represented by a risk free asset as treasuries are and entities whose bonds are trading as bottom of the swamp junk.
90% of the time in history, stocks have been cheaper than they are now, but you would think a bonanza was to be had for those that would pile in while those that stayed out would be left crying. 20 years from now we are still going to be trying to get out of this trading range, which is being pushed as a bargain price. In the meantime, those that get in are going to lose everything they have. As John likes to repeat, we are at a stage that the world changes in ways that few are going to be able to follow. A collapse in demand for goods and credit is just part of the equation. I would venture that 50% of the Nasdaq and SPX would be in bankruptcy right now if not for government bailouts and ignored accounting fraud. I read today that the government is threatening a Texas financial firm while turning a blind eye to the NY firms that are in much worse financial shape. The morals of the country have gone to hell to the point that the entire country is nothing but a bunch of blind gamblers who know nothing about value. The owner of the Texas Rangers and Dallas Stars is out of credit, not that he ever put a dime up to buy anything. His bankers will be nicer to him than they will be to you and I, you can bet.
