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‘There’s no stopping it,’ warns Ron Paul: A ‘calamity’ could cut this market in half

Posted by freedomforall 6 months, 3 weeks ago to Business
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“The correction is going to be huge, and I don’t think anybody can predict, but I think this correction we had in ‘08 and ‘09 wasn’t allowed to really go its course and restore some sensibility to the market,” he explained to CNBC. “I think that’ll be a mild correction to what could happen.”
SOURCE URL: https://www.marketwatch.com/story/theres-no-stopping-it-warns-ron-paul-a-calamity-could-cut-this-market-in-half-2018-03-06


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    Posted by  $  Dobrien 6 months, 3 weeks ago
    Market collapses are nearly impossible to predict on a timely basis. Very High gas prices have preceded recent market swoons. I first read Paul's prediction at 15,000 on the Dow While we had a commie traitor as a Pres.
    Now after10,000 points higher his prediction stays the same. Even a blind squirrel finds an acorn over time. The regulations Trump has eased and the corp tax rate slashed provides for greater cash flow and a much more competitive position for US companies. Don't forget the country is not being sold out any longer. The storm is on the corrupt
    And FINALY we have a pro American Pres. With more working and not sucking from the teet of entitlements the deficit can be attacked. Bush and Obamas spending created the
    Huge deficit it maybe too large to have a soft landing but I like Trumps approach much better than His predecessors.
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    • Posted by term2 6 months, 2 weeks ago
      The stock market is really a game of fools for the most part. We buy because there will be someone who will pay more in the future, and the prices have little to do with the reality of the underlying busineses. You can work all year to go through fundamentals, and lose all the gains in one day.
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      • Posted by  $  Dobrien 6 months, 2 weeks ago
        Plenty of manipulators ready to prey on the uninformed. That will never change. An unfettered stock market is pure capitalism. you don't lose it all in one day if you don't sell. Just like your business if you had to sell it in 5 minutes you certainly would not realize the best price for you.
        I find people spend more time saving a couple hundred bucks buying a car than the due understanding the investments they make.
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        • Posted by term2 6 months, 2 weeks ago
          But arent these "investments" basically relying on estimates of where the emotional buying or selling frenzies will take place. It seems based less on logic than on crowd emotion.

          ˆt has always bothered me that the stock price has little relation to the actual value of the company when it sells at 17 times annual earnings when a private company might sell for 5 times earnings. It strikes me as a gambling thing at that point.
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  • Posted by  $  blarman 6 months, 3 weeks ago
    Though not a financial insider, my business background has had me watching the market closely since the turn of the century and I am concerned about its trajectory. There really is no true investment market right now - its a speculation market. True investments guarantee a continuing return in dividends - like bonds and preferred stock. But bond rates are in the toilet meaning almost zero return on them and most stock issued is common stock with no dividends. Housing is also turned to speculation because of the absurdly low interest rates artificially inflating home prices. The market is a house of straw waiting for the huffing and puffing of the Big Bad Wolf. And there is no house of bricks to go hide in because we dismantled it!

    I, too, am waiting for the correction with baited breath.
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    • Posted by term2 6 months, 2 weeks ago
      I think a currency collapse due to excessive debt is going to trigger the next "correction". The Trump effect that we are seeing now isnt really sustainable, simply because Trump cant really do that much to stop the money printing madness that has been going on for like 40 years, and which HAS to come to an end.
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      • Posted by  $  blarman 6 months, 2 weeks ago
        Will it be a currency collapse or an inability to obtain currency that will trigger the collapse? Right now, what would cause the most damage is a run on the banks - you could bet that would absolutely create all kinds of problems as people try to get back out what they have in their savings accounts when its all tied up in others' debts.
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        • Posted by term2 6 months, 2 weeks ago
          I think that the people will trigger it by cutting back on consumption and investing. They did that to some extent in 2008-9 and the govt was panicked over a deflationary spiral. For what its worth, I havent really been buying as much as I did before- kind of preparing in a way for some sort of collapse. I think everyone could cut back 10% on their purchases and not affect their lifestyle very much. 10% shrinkage in the economy would probably be enough to trigger a deflation in itself. Its all a house of cards anyway.
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          • Posted by 6 months, 2 weeks ago
            I think that such a consumer strike is the only peaceful way with any chance of regaining liberty for the people. It is almost the only thing left that people can legally do.
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            • Posted by term2 6 months, 2 weeks ago
              plus, saving 10% on your purchases is relatively easy to do, and it means you dont have to make as much money and therefore pay as much income tax and sales tax.
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        • Posted by 6 months, 2 weeks ago
          And the Fed would cut down a lot of trees and do what has been done in the past... throw a lot of paper fiat at it until people calmed down and accepted their lies.
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          • Posted by term2 6 months, 2 weeks ago
            I agree that the fed would do this to stretch the bubble a little longer. The problem comes in when people lose trust in value of the currency. Maybe they just issue a new currency and price IT and all the debt instruments and savings instruments at some fraction of the current currency value- in hopes people will think that the "new" currency wont depreciate as fast as the old one.
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            • Posted by 6 months, 2 weeks ago
              These days that happens when a county tries to free itself of the debt slavery of international banking. Then the banksters destroy the currency value. Its a protection racket. If the country agrees to be enslaved by letting banksters control them the currency values aren't manipulated into the toilet. They keep paying protection and the currency slowly declines instead. (All imo.) Then there is the occasional trader who exploits weakness to excess like Soros did with the pound.
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  • Posted by  $  AJAshinoff 6 months, 2 weeks ago
    With a market based on speculation at anytime the emotional response to circumstances can have a negative impact. To me Mr. Paul is stating the obvious and, perhaps, blaring the trumpet unnecessarily. My stocks are up, quite up, for the first time in a very long while...I'll keep watch and react according.

    It's nice to have a pro-American, Pro-American business President in office.
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  • Posted by Herb7734 6 months, 2 weeks ago
    I am weary of calamities.I've survived all of them that happened and those that didn't happen. If you go to a theme park and ride the newest, scariest, mind-blowing coaster, you'll inevitably find at the end, "Well, that wasn't so bad." So it is with the latest "calamity." If you wish to emulate Al Capp's Joe Biltzlflk, the guy who goes around with a gray cloud over his head that's constantly raining on him - well then, go ahead. As for me, I'll look beyond the cloud and see "Beyond The Blue Horizon."
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  • Posted by  $  richrobinson 6 months, 2 weeks ago
    I have said before that the resistance to Trump is everywhere. If the FED raises rates to quickly they could trigger a correction just to try and stop Trumps agenda. Would be a wild ride.
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  • Posted by Lucky 6 months, 3 weeks ago
    " .. correction we had in ‘08 and ‘09 wasn’t allowed to really go its course "
    What does "allowed" mean?
    That government, or the reserve, or some conspirators intervened to stop the market dropping? I reckon that to stop a panic on Wall St would be beyond even Soros.

    So, I follow the argument but, if the logic is right, why did it not happen 5 years ago? The golden years of Fed money creation was during the prev regime, now the Fed chair is talking tighter money, ok it is only talk so far, but could be an trigger for the panic 5 years overdue .
    Anyone who says I do not understand macroeconomics is right, I blame it on grad school Keynsianism mushing my head.
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    • Posted by 6 months, 3 weeks ago
      Yes, the banksters cried "save the economy (from our manipulation and our gambling in the opposite of the advice we gave our customers)" and the treasury dept-run by banksters for 30 years (or more) said "we are so scared (of losing our phoney baloney jobs) that we will give you a trillion in taxpayer funding to prevent your being tarred and feathered by your shareholders and customers."
      Damn right it was a conspiracy! An obvious conspiracy since 1913 for anyone willing to open his eyes, analyze the evidence, and think. The market has been manipulated for the entire time.
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      • Posted by term2 6 months, 2 weeks ago
        the stock market is just a system for trading paper expections of what the government can do to keep bubbles just getting bigger and bigger. Its all based on a very shaky US dollar which itself is based on nothing any more.
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  • Posted by fivedollargold 6 months, 2 weeks ago
    Saint Ayn was a CAPITALIST. Capitalists borrow money by taking out loans, selling bonds, and selling shares of ownership. These funds build factories, buy equipment, and hire workers. These people are called PRODUCERS. Is it possible that some people on this site read Atlas Shrugged and missed this? Or, do we have a cadre of Soros-funded trolls sowing disinformation?
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  • Posted by fivedollargold 6 months, 2 weeks ago
    If one waits long enough, there will always be a calamity. Meanwhile, take prudent precautions. Fivedollargold mentors his neophyte investors to always keep some cash and diversify beyond just stocks and bonds. Historically, the best day to buy stocks is Monday, and to buy, Friday. Screen for stocks with Price to Sales ratio < 1.5 and a PEG ratio < 2.0. (Not hard and fast rules, but a good starting point.) Homework should include things in the news as well as trends. For example, new tax policy, regulatory reform, and the "Trumpcycle," that is, buy when one of the President's comments sends the Dow Jones Industrial average down 250+ points and sell when his statements send it up 300+. (Or pick your own numbers.) With regard to trends, a big one is cloud computing, which includes cloud storage and data analytics. Examples of such are CRM, AMZN, BOX, WDAY, and even MSFT. $5Au is a fan of index funds,too, especially for retirement accounts, and for those who lack the time or inclination to do their own research. Disclaimer: Fivedollargold may hold long positions in any stock mentioned here, and assumes no responsibility for financial actions taken by interested readers. His comments are for educational and informational use only.
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    • Posted by 6 months, 2 weeks ago
      Meanwhile this produces nothing whatsoever. Produce something instead of feeding a system that is rigged to reward non-producers.
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      • Posted by Solver 6 months, 2 weeks ago
        Stocks and the market provide the capital to run and grow the businesses. Image that no one traded Amazon stock because they all thought it would produce nothing.
        Disclaimer: I’ve never owned Amazon stock
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        • Posted by 6 months, 2 weeks ago
          Trading shares produces nothing and does nothing to finance companies. Investing in companies has nothing to do with the current stock market- its a complete sham to hide the ongoing looting by Wall Street. If it was about long term investments in new small enterprises without manipulation by Wall Street to destroy those very enterprises, I would be very supportive. It isn't. I'm not. Wall St has a virtual monopoly on company financing, thanks to government that claims to protect widows and orphans, but is really assuring Wall Street has no competition and can cheat their own customers.
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          • Posted by Solver 6 months, 2 weeks ago
            See above
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            • Posted by 6 months, 2 weeks ago
              See what?
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              • Posted by Solver 6 months, 2 weeks ago
                Stock prices are the free market trying to determine present or future value of a company in a world of continuous political chaos. This is done by trading shares. How much capital a business using stock shares can use, spend or borrow on production and growth is mostly determined by the stock price. For these companies, without this capital, there is no company and no production.
                Without people trading shares, today’s hugely successful, productive and innovative corporation called, Amazon would not exist, thus not produce anything.
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                • Posted by 6 months, 2 weeks ago
                  That's the theory, not practice.
                  Share prices are continually manipulated to destroy the value and wrest control of small caps from their owners.
                  Amazon could easily exist as a large private company without trading shares at all. Wall St hates private companies because they can't easily steal control from the owners.
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                  • Posted by Solver 6 months, 2 weeks ago
                    It was the owners of Amazon that voted to make Amazon a public corporation. That gave it the capital for explosive growth which benefitted all the new owners (the stock holders) and society.
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                    • Posted by 6 months, 2 weeks ago
                      BTW, I do not have a problem with public ownership of companies, but the current system protects Wall St from competition. We have new technology that should allow companies to issue shares without involving Wall St. Clear out the dead wood laws that prevent them from doing so and protect Wall St from competition.
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                    • Posted by 6 months, 2 weeks ago
                      Going public is often a dream of people in a business. Perhaps in the same position I would have done so, but its likely I would have voted against it because of what I know about the market. I would have voted to expand without a public offering and not give Wall St a chance to manipulate my company. Management often make actions to satisfy Wall St analysts that are counter productive to long term welfare of the business.
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  • Posted by NealS 6 months, 2 weeks ago
    I listen to stock market advice from Ron Paul about as much as I listen to other politicians advice, about as much as I listened to Mark Cuban's advice if Trump won. I didn't. The market goes up and the market goes down, but overall, so far anyway in my lifetime, it has ultimately gone up. And it pays a lot better than the interest my bank pays me on my deposits. Even Paul Krugman's predictions are about as good as Michaels Moore's.
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  • Posted by CircuitGuy 6 months, 3 weeks ago
    People post a lot of hyperbole, conspiracy theory crap, childish propaganda from politicians needing support from the uneducated, and general misanthropy to this site. This article is not part of that. Ron Paul is correct. I don't pretend to know what the markets will do, but the value of large-cap equities being cut in half in a matter of years is not at all far-fetched. We are playing with fire. It's not that the world might end. There are more opportunities in America during financial crises then in most other times and places in human history. So things are fine by historical standards. But we are grossly mismanaging fiscal policy. We are acting like a bloated empire. The longer we wait, the more painful the adjustments.

    The best and most probably scenario is the crisis prompts us to take action, we partly fix the problems, and partly kick the can down the road. The worse case is how Germany degenerated into a fascist state. (We will not let the worse case happen.) The scenario where letting the problems go leads to a great flood wiping away decadence leaving behind the righteous Noahs and Utnapishtims of the world is a form of denial.

    There's no shortcut to just starting now to fix the problems. Ron Paul is correct.
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    • Posted by Abaco 6 months, 3 weeks ago
      I think he is too. I tend to agree with Ron Paul on a lot of things, though. I can talk about this now, but I also worked several years in the financial industry (sold that business a year ago). The market has been manipulated heavily with W Bush in the White House, and hasn't really been what I'd consider to be a natural market since. For one, the market is too-closely tied to politicians, reacting too much to the whims and actions of elected officials. Also, many people in positions of power have been allowed to alter the market with things like tweets, etc. Not to name names, but one of them is a blonde lady with big calves. She has dinged me several times, big time.

      Anyway, the market isn't make a lot of sense. And, it hasn't for a long time. I use a method of trend following that ignores the noise. And, I also think we should have a big correction soon - we're overdo. Want to see something funny? Look at a graph of the S&P 500 up to and through the Trump election. Pretty funny...
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      • Posted by term2 6 months, 2 weeks ago
        I tend to think that being in the stock market is a form of gambling, just like the various lotteries and Las Vegas gambling.
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        • Posted by 6 months, 2 weeks ago
          Except that Wall Street's take from this rigged game is immensely greater than the small percentage taken by a casino. Wall Street's propaganda machine is unparalleled in stealing from it's own customers.
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          • Posted by term2 6 months, 2 weeks ago
            Its a game that individuals cant win, so I dont play
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            • Posted by Solver 6 months, 2 weeks ago
              That is literally not true.
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              • Posted by term2 6 months, 2 weeks ago
                The big boys rig it so it benefits them at the expense of the people who dont have the VERY fast price quote systems, and who dont have the inside information that they do. The govt tries to level the playing field, but doesnt do that good a job at it.
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                • Posted by Solver 6 months, 2 weeks ago
                  In a very competitive field, they spend a lot more, take a lot more risks and are generally better able to pick the lower buys and higher sells as well as the better stocks, then those who don’t.
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                • Posted by 6 months, 2 weeks ago
                  It's even worse than that when it comes to small cap companies. The wall st financiers drive the prices down at will to gain shares cheaply and to force violations of debt agreements in cooperation with banksters. That forces companies to raise more equity funding at low prices and screws everyone who had participated in earlier share issues. It also results in private placements that transfer control of a company and all it's property to Wall St or larger competitors.
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      • Posted by CircuitGuy 6 months, 3 weeks ago
        I agree with Ron Paul on many things too. A bigger concern than markets responding to politicians is just the amount of debt. The Fed gov't runs huge deficits. Part of the way it can borrow cheaply is the Fed Reserve buys the debt, and that only works because the dollar is such an esteemed reserve currency, which only happens because people have faith in the US gov'ts ability to tax and the ability of the people to keep producing value that can be taxed. If the gov't spent the money on a war during a recession, it could be good for the economy (not that war is worth it) because eventually there will be incentive to end the war and stop borrowing. We're borrowing for a global empire the world feels like it needs for basic security, a large prison system, and domestic programs that people have become dependent upon-- all stuff that's hard to shut off. They're already taxing half of what high-earners make. There's no political will to tax the average citizen, who pays almost no Fed income tax. On top of all that, Social Security is like a back-door debt to people who paid into it and reasonably expect to get benefits from it; and on top of that there's a lot of consumer debt. So we end up going from crisis to crisis. I think if they keep pushing it, we may see a crisis at a moment when Bitcoin is poised to put national bank currencies, even the USD, out of business. That might now be so bad because right now having a national bank is enabling the gov't's "debt abuse" problem.

        I used to disagree on principal with Ron Paul in that I think fractional reserve banking is a good thing, really a beautiful thing where people put their money in the bank, which lends it out to the next person with a good idea to create wealth, and the money supply expands with all the good ideas out there to invest in. Ron Paul says even politicians who campaign on tight fiscal/monetary policy invariably want loose policy once in office. That's happening right now, making me start to change my mind. Maybe a central bank is great in theory, like the concept of a wise benevolent dictator, that is impractical.

        I did not follow your observation the presidential election and the stock market, but in any case I think the connection is overstated. It's a noisy system, like the distribution of clouds or stars in the sky. Pareidolia makes us see patterns in the noise. In my world, it appears as "AWGN", but the random walk is everywhere. I do NOT dismiss the idea, though, that big elections can affect market psychology. I just think excessive debt is the huge elephant in the room and rational market participants are not fired up about politics.

        tldr; Our open policy of living beyond our means, is a bigger problem than clandestine market manipulation.
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        • Posted by Abaco 6 months, 3 weeks ago
          The debt will likely be the big blow. And, it continues to balloon under Trump, to the tune of another 1.5T each year. Completely uncharted territory now....

          As for the election, you have to look at the SP500 for just a couple months around the election. I had positioned myself for a Hillary win and had to lick my wounds for a week while I repositioned.
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          • -1
            Posted by CircuitGuy 6 months, 2 weeks ago
            I still don't get the election part. I see the markets being influenced by the president the same way they might be influenced by a colder winter: 1. It's hard to predict before other market participants. 2. The effect is minor. 3. Even the direction of the effect is unclear.
            You can tell more about the outcome outlook from things like shipping companies # of overnight shipment or Caterpiller's orders for machinery. Politicians hardly move the needle.
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            • Posted by Abaco 6 months, 2 weeks ago
              Pull up a 3-yr chart on SPX and look at the time period around the election and the slope since. Clear as day.

              Politicians move the needle a lot. Especially with marginally-legal public statements. They have their buddies short a stock then put out a public statement about some company's pricing/greed, or question their accounting practices, or (in the case of the cankled one) even threaten to investigate the company.
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              • Posted by 6 months, 2 weeks ago
                I'm certain that the starting point for manipulation is more frequently on Wall St via the US Treasury (which has been under Wall St control for most of the past century.) Manipulation of share prices is the primary source of income for the Street and the primary downfall for many small public companies.
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              • Posted by CircuitGuy 6 months, 2 weeks ago
                "Clear as day."
                I see nothing at all. I have a lousy track record with stocks. My masters is in pulling weak signals out of electronic noise and I follow the markets casually, but I suck at market predictions. I can't even guess what you might be seeing, much less if it's correlated with any world events. It looks like a slow structure creation of value over the decades plus a lot of AWGN to me.
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                • Posted by Abaco 6 months, 2 weeks ago
                  Rats! Well, it's there. Look at slope, I guess. I think in terms of dp/dt - price and time. In short, though, is that this recent trend of big returns is not something investors should hang their hats on. But, they will...again.

                  Oh, and everybody sucks at market predictions...haha. All we can do is identify what's happening (or try to), apply a little history, pay attention to current affairs, and hope a black swan doesn't show. Media is full of articles and interviews of experts calling for this or that...
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