I'm calling it - No financial market crash in 2015 Since July I've been prepping for a potential September/October meltdown and I have to admit, it's been pretty close. With the China problems and market weakness in August, a spike in volatility and the fear indexes and worry over the Fed actions I think it's been a very near miss. But even though I still see major problems with our financial system and an inevitable breakdown to occur in the not-too-distant future, I think that in the short term the risk of a crash has dissipated. We've started seeing some awareness of issues finally being talked about in MSM and even today Clinton has come out and called for a break-up of "too big to fail" banks. This is all good, but as a contrarian I normally oppose MSM. I think the TA also suggests that a crash in the Dow may have been averted. PMs could be about to resume their down-trend and in Australia, our dollar has bounced and so has sentiment. Earning season has started in the US, but I'm not expecting a significant slowdown in earnings (due to China) until next quarter. I've liquidated my leveraged gold play (SLR mining shares) at a tidy profit but otherwise am holding onto my physical PMs, Bitcoin and USD for "next time". Overall I am still a bear, but I've found it's very expensive to be a bear if your timing is wrong. :/ Anyone else think we might be past the short term danger? Or have I called it too early?
That's like the 'best movie of the year' tag line on movie reviews when it was released late January.
DB have the world's largest derivatives exposure. They're about as dangerous an institution as you can get in terms of unmanageable risk IF they failed. The de-leveraging alone would have huge impacts. I don't know much about their problems but I know a little about their size.
Pay attention to the markets reaction on the following days 22nd October 30th October 4th December 11-12th December
22nd October - ECB meeting. Markets widely expect an extension of the ECB QE program beyond September 2016. Markets could react badly if the ECB disappoints. 30th October - BoJ meeting. Markets widely expect an increase of monetary easing from the BoJ given poor macro data out of Japan recently. If BoJ disappoints, Yen will rise against USD pushing shares down as the Yen carry trade unwinds. Opposite will happen if the markets like what they hear 4th December - OPEC meeting on production levels. May have an impact on oil markets and wider markets depending on the results. If production is increased or at least remains the same, expect longer term falls in inflation figures. This will then impact central bank policies. Especially those that have high exposure to oil (Canada, Brazil, Norway etc) 11-12th December is the date US congress pushed the budget deadline back to a couple of weeks ago which will now coincide with the debt ceiling being reached.
But of an old thread,but.... ....I'm watching for a possible Trump victory in November and a likely Fed hike in December as predictable sources of volatility. You've got German and Italian banks who are capable of surprising everyone but I think nobody would see that coming until it has already arrived. So still a crash risk for late 2016 IMHO, but I haven't been too worried about a crash for a while.
Crash seems to be getting closer. No one has confidence in the system. If DB goes under we will all be rich (if we survive the chaos it causes).
