I thought this song was suitable for this thread and others that talk about a black someday: If you're happy and you know it, clap your hands (clap clap) If you're happy and you know it, clap your hands (clap clap) If you're happy and you know it, then your face will surely show it If you're happy and you know it, clap your hands. (clap clap) If you're happy and you know it, stomp your feet (stomp stomp) If you're happy and you know it, stomp your feet (stomp stomp) If you're happy and you know it, then your face will surely show it If you're happy and you know it, stomp your feet. (stomp stomp) If you're happy and you know it, shout "Hurray!" (hoo-ray!) If you're happy and you know it, shout "Hurray!" (hoo-ray!) If you're happy and you know it, then your face will surely show it If you're happy and you know it, shout "Hurray!" (hoo-ray!) If you're happy and you know it, do all three (clap-clap, stomp-stomp, hoo-ray!) If you're happy and you know it, do all three (clap-clap, stomp-stomp, hoo-ray!) If you're happy and you know it, then your face will surely show it If you're happy and you know it, do all three. (clap-clap, stomp-stomp, hoo-ray!)
The way I see it, 3 likely scenarios: 1) Fed continues to print - Market continues slow, edging ascent. The subprime bullet is dodged. Mounting debt is paid back in even cheaper dollars. US consumer happy, but uncomfortably aware paycheck doesn't buy as much as it used to. Rates same or +- 1/2 point. 2) Fed takes Hawkish position against inflation - fresh warnings and unambiguous language signal inflation is the next Osama Bin Laden. Chinese prices see appreciable gains in constant USD. US Consumers well aware inflation present and problematic. Government can no longer hide the elephant in the room. If Bernacke grows some balls, he's got two options for a raise: a) Premature hike before Sub-prime 'tucked away' Subprime must be cleaned and sanitized before the market can take any type of rate hike. If done prematurely with subprime still in question, the wheels fall off. Everyone from Goldman to your kid sister take it up the wazoo. Thankfully, Bernacke will not sell out his Wallstreet Pimps. This we can sure of. b) After a Subprime 'resolve' Everyone still takes it hard, but definitely a more lucrative ride for the Big Boys. After the markets declare subprime "yesterdays news" (and a hike underway), the descent may be a more orderly decline than a terror-fueled crash. Although, it may just crash all the same. Under this scenario, expect a prolonged recession of 2-3 years+. Painful. But natures medicine. Rates go up within a year from now if Bernacke upholds the Feds mandate. A crash/correction of 20%+ should follow. This gives Bush just enough time to bomb Iran and launch oil into the stratosphere without having to hand over a steaming pile to his predecessor. Ingeniously timed to pacify Americans for one last Neocon hurrah, no?? 3) Helicopter Boy Makes Good. This is the Red Dawn scenario every American has nightmares about. Bernacke goes from sub prime bailout , to flashing warning lights - yet deliberately stamps on the accelerator anyway. This scenario could mean a number of things: all bad - depending on how much, for how long. The longer we keep up this inflationary game, the larger and harder the ensuing correction will be. Of course, with an extended LP, the music just keeps on going. Until the schoolmaster decides to pull the plug. Its really up to the Fed.
The poll is flawed, there is no option for a greater than 10% correction and the question rather long or short tech is off subject. Wouldn't a "crash" be somewhat in the magnitude of 30-50% or greater decline? Additionally, a crash can occur in a larger time period than 1-day, markets could cascade for days and weeks. There is without a doubt a crash coming, the question is when? Less than 1-year, 5, 10, 20, 50, 100?
I'm of the following opinion: - I think the world's financial system is unstable and can break down - This can happen in a week, or it can take 15 years (meaning: a really long time) - We're in a global bubble, and I'm leaning towards it having a bit further to run - We won't see -10% days (in the US) as there are mechanisms in place to prevent such big moves So, I didn't vote since I don't feel my opinion covered by the options in the poll.