when do you think the second wave stock meltdown will come?

[sirbadman]

I'm a bit dissappointed DBS isn't really discussing with Rafeeq when the next wave will come in... I think a while back DBS was suggesting it could be in October, after saying in much earlier shows it would kick in this September.

Of course predicting these things is not easy at all given the market manipulation that is going on.

The Baltic Dry Index has been on a steady decline for quite some time now. I'm thinking there will be a second wave meltdown before the end of the year.

There is guarenteed crap to hit the fan in 2010 anyway with the Alt A and commercial real estate situation.

What do you guys think? When will the next wave hit.. or do some of you think it wont happen? Feel free to put in some good links, I'm always looking for more info on this matter.

[CrackSmokeRepublican]

Bob Precther mentioned awhile back that  the March 2009 lows is following a classic Wave 1-5 pattern. We have seen the down wave gradually building to a crescendo from August 2007 until March 2009 - that is wave 1 down.  We have seen a Fibonacci retracement and large gains from the March low until about now -- this is wave 2 up. This up could go for awhile longer but a lot of people are looking at it giving up in the next few weeks. The market manipulation may be allowing the Social beliefs of many in the market to be good. Prechter is looking at a Fall collapse which is Wave 3 down -- the most heartbreaking/dreamshattering one and the most cruel.  "If we make it through December, everything is going to be alright I know" -- I'm not a big Country fan but Merle Haggard has a good voice.  

http://www.youtube.com/watch?v=Z-IJxTd8dCo&feature=related

[sirbadman]

Cheers for the response CSR. I'm glad you haven't left TIU.

I do perform technical analysis but i haven't embraced the elliot wave stuff. Not for any particular reason, I just use use what I am familiar with eg, simple moving averages, MACD, slow stochastic, momentum and other volume-based technical indicators. So I didn't know much about Bob and will check out what he says through youtube from now.

By the way, my youtube channel has quite a few vids favourited on the financial stuff.

Marc Faber thinks the rally could go for a bit longer and the next collapse will be brutal, but could be another 12 months away. But that was according to a vid a couple of months ago.

I think China has stopped importing/stockpiling iron ore and other base metal commodities to the same degree. That is why the Baltic Dry Index is down too. If China has enough commodities for its own domestic infrastructure building, say for 12-18 months, then they could pull the pin on the US dollar and then by the time they need to start importing heaps of commodities again there could be some other currency the purchases can be based on. That might be a strategy that strange commy hell hole is playing.

China needs to figure out someway of divorcing itself from the US. That said, the country is economically screwed because it is still an export-orientated economy and the US consumer is on life support. On a US dollar drip setup made in Zimbabwe.

The Chinese government also needs to keep employment up, or there will be more riots in the country. So many excess men in that country that will never get a girlfriend or a wife.

Makes it all really hard to make predictions. And that's not even looking at the Fed's stockmarket manipulation.

[CrackSmokeRepublican]

Hey SirBadMan,

It's very interesting to to look at things at the Global level these days. Can't say it is all cheery but it is fascinating all the same.

I'm a big fan of Jesse's C.A. and found his pointing out this one below as a potential "game changer".  The manipulation is across the board right now. Note the part in bold below:

http://jessescrossroadscafe.blogspot.com/

Also, this radio interview is a must listen by Prechter. I believe the inflation might come later but I'm in the Deflationary camp since the evidence is pointing at this. :
http://www.kingworldnews.com/kingworldn ... 3A2009.mp3

Do Ben and Tim = Thelma and Louise?


One cannot help but note that Team Obama is trying to derail serious proposals regarding financial reform for Wall Street at the G20 meeting, as we suggested they would.

The concerns raised by US revelations at the G20 today about new intelligence regarding Iran's secret underground nuclear facility have overshadowed financial reform and economic problems, and Gordon Brown's prescription yesterday that the G20 would become the new governing council for the world. It also stepped rather heavily on the House Hearings on HR 1207 "Audit the Fed" bill sponsored by Ron Paul and a good part of the Congress.

Why waste a crisis indeed. Especially when you can cop a two-fer.

Yesterday we put forward a somewhat lengthy piece on the Fed and reverse repos being considered titled Fed Eyes US Money Market Funds.

There is a key quote in there that we would like to highlight today.

    The central bank is now considering dealing with money market funds because it does not think the primary dealers have the balance sheet capacity to provide more than about $100 billion... Money market mutual funds have about $2.5 trillion under management..."

Only 100 billion in available capital for a relatively risk free short term investment in the global banking system including the Primary Dealers, does seem a bit tight for a set of such 'well capitalized' banks, especially since they aren't making many commerical loans, preferring to speculate in the commodity and equity markets for daytrading profits.

    BNP Paribas Securities Corp., Banc of America Securities LLC, Barclays Capital Inc., Cantor Fitzgerald & Co., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Daiwa Securities America Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., HSBC Securities (USA) Inc. , Jefferies & Company, Inc., J. P. Morgan Securities Inc., Mizuho Securities USA, Morgan Stanley & Co. Incorporated, Nomura Securities International, Inc., RBC Capital Markets Corporation, RBS Securities Inc., UBS SecuritiesLLC.

Couple that with the revelation reported some time ago at ZeroHedge and covered here, that the Fed is taking on more than 50 percent of the longer dated Treasuries, and there is only about Ten Billion left on their balance sheet for expansion, and you get the picture of a financial system not cruising into recovery but heading straight at a confrontation with harsh reality.

We have considered the possibility that the Fed is doing this to place exclusively AAA and Treasuries on the balance sheets of the Funds, aka the Shadow Banking System, who are holding some seriously awful garbage. But this does not quite make sense unless those reverse repos are of a very long duration or rolled over automatically for a long period of time. A proper program such as was extended to the banks where the Fed buys the assets outright would be that solution. It made more sense to us that the banking system is still very tight on good capital assets and liquidity.

Here is an update from ZH that is somewhat compelling if one understand the implications. Visualizing the Upcoming Treasury Funding Crisis.

    "Summary: foreign purchasers are congregating exclusively around the front end of the Treasury curve, meaning that the primary net purchaser of dated bonds has been the Federal Reserve. As everyone knows by now, the Fed only has $10 billion left out of the $300 billion total allotted for Treasury QE. That should expire next week. ... The time of unravelling may be upon us sooner than most think."

Do Tim and Ben = Thelma and Louise?

As the Eagles sang:

    "Take it, to the limit, one more time..."

http://jessescrossroadscafe.blogspot.com/