What will be the catalyst to cause the markets to drop?

Discussion in 'Economics' started by tommo, Sep 17, 2010.

  1. tommo


    Looking around on these forums everybody is extremely negative. Whether its hyper-inflation, World War 3, the end of US and EU... i could go on.

    Im not one to claim i know better, so i am assuming the economy really is in such a desperate position and its only a matter of time before the world comes to its senses and sell all US assets or Euro breaks up or countries default on sovereign debt etc

    But the markets, on the whole, are quite content bobbing around up 4-5% here, down 4-5% there, companies are announcing profits, economic figures are turning up (slowly).

    You cant possibly assume the enlightened crowd on ET are the only people the world who know how the world REALLY is. So where is the "inevitable" crash? What is the catalyst that will drive us into the next wave of financial meltdown? Because from what I see people have been talking about all these doomsday scenarios for the past two years and the stock market has been rising the whole time.

    Shouting at the market for being wrong doesnt make you any money, the market is always right and at the moment the market says "recovery is here to stay". Maybe in 5 years time we will see a meltdown but are you going to stay on the sidelines/short the whole time? What is the realistic catalyst to bring the world to its senses?
  2. Maybe an audit of the federal reserve being made public might do it. Might be something more simple too. Like prices starting to rise too fast. Like in 2008 when gas prices were reaching $5 per gallon, and commodities were also rising fast, not to mention a very weak dollar and then you had the whole bear sterns fiasco. That was the catalyst that should've brought us down, but we were saved for another day with a huge injection of TARP money.

    The market will not drop again unless we have deleveraging. More likely it will go up or stay the same as prices rise.
  3. A rise in interest rates, or even a hint of a rise would start the carry-trade to bail...:D
  4. Some very large "checks" will be cashed, possibly at or near the end of next week. That'll take her down a bit, perhaps not an epic crash, but a solid swing down for sure.
  5. $600 Trillion to $1000 Trillion derivatives, sky-high real estate prices, Crude oil $150, big wars, multi-billion scams/frauds, bankrupt giant companies and banks, 10 magnitude on richter scale earthquake and finally unseen future.
  6. tommo



    Been there already havent we? We know how the story ends, print more and more money and we all feel happy?

    But who will call the Fed's bluff first?
  7. Here is a novel concept:

    What if the world DOESN'T end and the markets DON'T crash?
  8. emg


    the market drops when there are more sellers than buyers. Doomsday is coming!
  9. tommo


    Kassz007 ,

    i agree, im not saying the economy isnt in a mess and financial meltdowns make for great conversations. But the worst rarely happens when everyone expects it, usually comes up and bites you on the ass when you least expect.

    The markets where called higher and higher going into 07 and look what happened. For the past few years everyone has been saying how this is the end of the financial world and people dont even trust banks with savings accounts and the market has rallied.

    Im just trying to get to the bottom of what will cause the meltdown so many people seem to be expecting. Printing money is an answer I have got. But that has been happening for 2 years and hasnt caused the markets to crash. When does it stop making the markets go up?
    #10     Sep 17, 2010