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Stock Market Correction Hasn’t Begun to Begin! It Will (And North Korea Has Nothing to Do With It)

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Publié le 14 août 2017
333 mots - Temps de lecture : 0 - 1 minutes
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Rubrique : Marchés

With the threat of nuclear war with North Korea looming, inquiring minds may be wondering what that threat is currently worth.

Indices

Currencies

Commodities

Bonds

The above are charts from Investing.Com.

What’s the Threat of Nuclear War Worth?

If you assign today’s movement to a nuclear war threat here are some possible assignments:

  • Commodities: Gold was up less than one percent, silver up a bit more than a percent, oil fell about 2%.
  • Equities: The Dow dropped less than a percent, the S&P 500 fell about 1.5% and the Nasdaq about 2.5%.
  • Currencies: The dollar index barely budged.
  • Bonds: the 30-year and 10-year treasury yields each went down a mere 4 basis points.

Ho Hum. The market essentially discarded the threat of war.

More accurately, one might even wonder if the threat of war had anything at all to do with today’s action.

Dow Since May 17

Correction Hasn’t Begun to Begin!

About the only thing that budged substantially today is the VIX.

If nuclear war breaks out, we will likely something like 1,000 DOW point moves. Even then, all an initial 1,000 point move would do is take the DOW back to where it was in May.

The threat of nuclear war provides a convenient scapegoat for any equity decline that follows.

— Mike Mish Shedlock (@MishGEA) August 10, 2017

If the stock market drops 15% from here, that’s likely just the beginning.  It would take a 40% to 50% decline for valuations to get to normal. Overshoots are possible. So don’t blame North Korea no matter how deep the ultimate dive.

For discussion, please see:

  1. Median Price-to-Revenue Ratio Higher in All Deciles vs 2007, 90% vs Dot-Com Bubble: THE Choice
  2. Bubblicious Debate: Greenspan Says “Bond Bubble About to Break”, No Stock Market Bubble,
  3. Tracking the Amazing Junk Bond Bubbles in the US and Europe

Trends in Sentiment, Asset Bubble, Gold

Finally, please consider my 38 slide powerpoint Venture Alliance Presentation on trends in sentiment, asset bubbles, and gold.

Mike “Mish” Shedlock

Source : mishtalk.com
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In a far ranging conversation this last weekend with a well-known analytical economist, Fortune magazine cover veteran, and Bernanke acquaintance, I was informed the "Big One" will hit in March of 2020 after a massive hyperinflation and bond market crash. Of course, for every economist there is an equal number of prognostications of varying degrees of reliability. I personally expected the crash to have occurred about five years ago...so much for the snail-paced movement of rational investor thinking. Balloons are meant to be popped but this enormous balloon is apparently hard to reach with a pin of reason.
This bubble has been deemed TBTP (Too Big To Pop). Central banks have outright said in public that they will do "whatever it takes" to prevent it. No sharp objects allowed. Only obtuse economic analysis.
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This bubble has been deemed TBTP (Too Big To Pop). Central banks have outright said in public that they will do "whatever it takes" to prevent it. No sharp objects allowed. Only obtuse economic analysis. Lire la suite
J. - 15/08/2017 à 22:12 GMT
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