Warning: The Stage Is Set For The 3rd Stock-Market Crash Of The 21st Century

The next major wave of the economic collapse is rapidly approaching and time is running out!!!

Margin debt hitting levels only seen ONE other time in history!

Some times in history, investors feel so confident about the future of stocks, they actually use up all their available cash and then borrow money to invest in the stock market.  Now is one of those times!!!

The chart below was created by Doug Short, see his outstanding work here.

CLICK ON CHART TO ENLARGE

Positive net worth takes place when.….Investors have little money borrowed and plenty of cash in there brokerage accounts.  (2003 & 2009)

Negative net worth takes place when.…Investors have little large amounts of money borrowed (on margin) and little cash in their brokerage accounts. (2000, 2007, 2011 & now)

The above chart reflects that only one other time in history has negative net worth been this low, which was the tech bubble back in 2000. The prior two times that negative net worth were this low was 2007 (50% S&P 500 decline) and 2011 (17% S&P 500 decline).

The above chart of Credit Balance/Net Worth shouldn’t be used as a market timing tool, yet it history holds true, it has reflected times when investors should load up the truck in stocks (Positive net worth was high at the 2003 & 2009 lows) and it did reflect times when investors should have lowered stock exposure (Negative net worth was low in 2000 & 2007).

I believe the top will be in when…. high yield funds, shoe box indicator (only available to members) and advance/declines show weakness in combination with the above net worth figures!   Stay tuned to see if its different this time!

Macro Collapse Pushes S&P 500 To New All-Time Nominal High And Close

“Horrible” PMI, no problem; just add it to the list of macro data that has missed significantly in recent weeks. Bloomberg’s US Macro index has utterly collapse in recent weeks – now at its worst level in 7 months but apparently if good is good, bad is better, and totally shitty is absolutely awesome. It would appear the world of nominal equity index chasers is now fully cognizant that the reality of their lemming like herding is based on one simple thing (no matter how much they kick and scream and proclaim wisdom about earnings cycles, growth, margins, transformative energy, or new AAPL products) – and that is… Central Bank promises.

And just to timestamp this, both the closing print, or right around it, and the all time nominal intraday high, coincide.

If the Fed needed any ammo for tomorrow to hint that there is a time frame longer than infinite and that there is a size of imprudence larger than infinity, then they have it… of course, there is, once gain, very weak volume on this uptick (but like everything else, that doesn’t matter either.)

Here’s The Great Disconnect That Has People Saying The Market Is Rigged By The Fed

Presenting: The Housing Bubble 2.0 - Great job Bernanke & Co. You have succeeded at rolling up the housing, credit, bond, tech and equity bubbles all into one.

It was just seven short years ago that the prices at the epicenter of the housing bubble, Los Angeles, CA rose by 50% every six months as the nation experienced its first parabolic move higher in home prices courtesy of Alan Greenspan’s disastrous policies: a time when everyone knew intuitively the housing market was in an epic bubble, yet which nobody wanted to pop because there was just too much fun to be had chasing the bouncing ball, not to mention money. Well, courtesy of the real-time real estate pricing trackers at Altos Research, we now know that the very worst of the housing bubble is not only back, but it is at levels not seen since the days when a house in the Inland Empire was only a faint glimmer of the prototype for BitCoin.

…

 

The Gretsch building, an old guitar factory turned condo building in Williamsburg, just had a crazy week: Crain’s reports that three units sold in all-cash transactions, each one setting new highs on a per-square-foot basis. The units in questions were two adjacent two-bedrooms on the ninth floor, selling for $1.4 million and $1.5 million, and a larger two-bedroom on the 10th floor selling at $2.5 million — all at an average of $1,150 per square foot. “It needs to be cash, it needs to be over ask, and (the listing) will never see the light of day,” the broker had told all the buyers. According to Crain’s, Williamsburg condos are currently averaging $794 per square foot, with high-end condos like Northside Piers bringing in closer to $1,050 per foot. The broker who handled the Gretsch sales at 60 Broadway can’t seem to believe it herself: “It’s unbelievable what’s going on out there,” she told Crain’s. Our question is, can the high sales we’ve been seeing lately be a bubble based on low mortgage rates if the buyers are paying record-setting prices with all cash? 3 Condos Sold in Williamsburg at Record Prices [Crain's]

Great job Bernanke & Co. You have succeeded at rolling up the housing, credit, bond, tech and equity bubbles all into one.

Watching the glorious unwind of all this unprecedented academic-created stupidity will be worth the hyperinflated price of admission alone.

h/t @Gloeschi

US Homeownership Rate Drops To 1995 Levels

LEON BLACK: The Market Is Pricey, ‘So We’re Selling Everything That’s Not Nailed Down’

Finance giant Leon Black spoke at the “New Directions in Private Equity” talk at the ongoingMilken Institute Global Conference.

Steve Case, the founder of AOL, tweeted this bearish quote from Black:

“Market is pricey…great time to sell…so we’re selling everything that’s not nailed down” Apollo’s Leon Black #2013GC @milkeninstitute

— Steve Case (@SteveCase) April 30, 2013

PAUL B. FARRELL: The 3rd Stock-Market Crash of The 21st Century Is Coming And Mr. Market Will Soon Lose $10 Trillion of Your Money, Repeating 2008 And 2000. How Much Will You Lose This Time Around?

How much will you lose this time around? Four years ago, on March 30, 2009, our column headline announced:“6 reasons I’m calling a bottom and a new bull.”

The Dow fell from 14,164. Hit bottom at 6,547. And Wall Street lost over $10 trillion of America’s retirement market cap. You lost lots. But it’s back up more than 100% since. We forget.

Time for another crash? Oh yes. Remember: Investors Business Daily’s publisher, Bill O’Neil, wrote in his classic, “How to Make Money in Stocks”: “During the last 50 years, we have had 12 bull markets and 11 bear markets … The bull markets averaged going up about 100% and the bear markets, on the average, declined 25% to 30%.” And “the typical bull market lasted 3.75 years and the classic bear market lingered only nine months.”

Today’s bull is over four years old, in dangerous territory.

Yes, you are facing an aging bull. Ready for pasture. But Wall Street’s still gambling with your money. Remember, Wall Street casinos have already lost roughly $10 trillion twice this century. Twice. And soon Wall Street will do it again.

But exactly when? Here’s how to figure “exactly” when. In his classic, “Stocks for the Long Run,” economist Jeremy Siegel studied all the “big market moves” between 1801 and 2001. Two centuries of data. Conclusion: 75% of the time there’s no rational explanation for “big moves” in stock, not up, not down.

So stop asking, maybe some technician, quant or high-frequency trader can predict short-term swings. But the “big market moves?” Never.

So “exactly” when? America’s top experts are warning us — it’ll happen before year-end. That’s “exactly” when. Why? It’s obvious. By year-end 2013 our aging bull will be 4 ½ years old, well past Bill O’Neil’s “average” 3.75 years for a bear drop putting a bull out to pasture….

So any rational investor would have to conclude that Mr. Market — as Warren Buffett’s mentor Benjamin Graham called the stock market in his classic “The Intelligent Investor” — would know that a bear drop, a crash, meltdown, or something very painful is coming very soon. Indeed, could happen anytime, maybe even tomorrow, because this bull is old-old by Bill O’Neil’s basic calculations.

The World Is Hoarding Alternative Money As Almost All Major Countries Are Going Through The Classic Stages of Economic Collapse

Hoarding Alternative Money & Reforming Banks

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