6 ms·

It's hard for me to tell whether this is just a "correction" (massive deflation after exuberance) or an actual meltdown. I had predicted the actual meltdown for

It's hard for me to tell whether this is just a "correction" (massive deflation after exuberance) or an actual meltdown. I had predicted the actual meltdown for September of 2015, but I guess this is pretty close. I wonder how this will affect my life, if at all. "The New York Stock Exchange said it will halt trading for 15 minutes if the Standard & Poor’s 500 Index drops 7 percent." [0] How is it fair that the markets get put on pause if they're failing? I really don't understand. [0]:http://www.bloomberg.com/news/articles/2015-08-24/nyse-will-suspend-stock-trading-if-s-p-500-index-plunges-7- http://www.bloomberg.com/news/articles/2015-08-24/nyse-will-...

kasey_junk 11y ago
It's not "fair", but it is a legal requirement. You should definitely remove the idea that markets are "fair" from your mind. If they were "fair" that would be a lottery not a market.
andrelaszlo 11y ago
"I had predicted the actual meltdown for September of 2015, but I guess this is pretty close. I wonder how this will affect my life, if at all." If you predicted it, then it should at least make you rich? :)
- ramblerman 11y ago
  Thank you. This cognitive fallacy of "I knew" and "I was saying it long ago" etc... really irks me. Especially in something like stocks you are 100% right, put your money where your mouth is and spare us the story of your grand predictive prowesses.
  - MCRed 11y ago
    I predicted the 2008 crisis in 2001. (Well an article on http://mises.org http://mises.org made it clear it would happen.) This was before the housing bubble started to inflate, and was easy to expect due to the changes in the CRA and the artificially low interest rates. I profited from the bubble quite well, decided the top had been hit when things got really wonky and got out of the market in 2007. I was a year early, but I'm not complaining. It's not a fallacy, you can do it, if you understand economics. The problem is, most people involved in stocks are more interested in technical analysis and tea reading than fundamentals of economics. It's the fundamentals of economics that drive "black swan" events. From 2001-2007 I constantly saw people claim there was no bubble, I constantly saw people say things like the economy is good and healthy. I constantly saw people pretend like the fed wasn't blowing up a balloon. Article after article was published spinning tales to pretend like up was down and down was up. And then in 2008 when it popped, I constantly saw people claim there was no way to see it coming. I saw it blamed on Wall Street. And since then I've seen article after article published to misdirect and mislead about what was going on, saying up was down and down was up, to service the narrative. The key indicator of a science is the ability to make predictions... yet the "dismal science" of economics is portrayed by politicians as incapable of saying anything, because they use it to pitch self serving narratives. But the reality is, good economics has predicted every major crash, and its reasons. You can't necessarily know the timing-- I was off by a year, and I have no clue when the next one is coming. ------- I see I've been slow banned and am getting brigade downvoted across all of my comments. This harassment is typical on hacker news when you think for yourself and don't tow the party line. Jesus, what draconian filter bubble. That's fine, my time here was largely wasted anyway. Here's the comment I was going to make below, but now am not allowed to: I've been slow banned so I expect a hell ban is coming, I don't know why, but I guess its because I'm not on the praising obama bandwagon. So this may be my last post, if I'm ever able to post it. Yes, if I'd just stayed in with everything for 6 months or a year I would have been worse off. I was pretty close to the top, in what I was investing in. I did sense that the market got weird- the response was not what it should have been based on the macro events. When things stopped making sense, I got out... If I hadn't gotten out at all I would have lost a lot of money - whether you measure to 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015. Those investments were plays on the bubble... not investments that make sense after the bubble. It's difficult to do long horizon investing when the market is so manipulated- by the government and by the messed up regulation-inhibited outdated exchanges. But you can know the fundamentals. The problem is, a lot of people emotionally don't want to face reality, and a lot more people get rich selling them fantasy. No, the US economy is not doing well. Hell, the US government can't even sell bonds, it's selling them to itself with the Fed fabricating money to buy them.
    - kasey_junk 11y ago
      Have you done analysis on: a) what would have happened had you stayed in for an extra month? An extra 6 months? The full year? b) what would have happened if you hadn't gotten out at all? The only reason I ask, is that most of the studies I've seen show that being able to predict macro level shifts in the market up to and including within 1 year time frames are largely less valuable than people would think. Especially for people doing long horizon investing.
    - peteretep 11y ago
      The problem with a sample size of 1 is that you could well have just gotten lucky
    - forgetsusername 11y ago
      >downvoted across all of my comments Maybe you're being down-voted because you're just a guy on the internet, bragging about how you saw it coming (7 years in advance!), timed it perfectly, made a bunch of money, and are now lecturing us on how it's "easy"...without a shred of evidence?
      - mjevans 11y ago
        I think you're not thinking critically enough in interpreting what he had said. More or less, he had said 'I felt it was unhealthy 7 years in advance'. The actual 'prediction' was only a year or two from the event in question; 'the market didn't make sense' and reacting to that.
    - AnimalMuppet 11y ago
      I heard of a guy who made a lot of money in the stock market. Somebody asked him how he did it. He said, "I always sold too soon." Don't kick yourself for getting out a year early. It's way better than half a year too late. However: > the US government can't even sell bonds, it's selling them to itself with the Fed fabricating money to buy them. That part is over, and has been for months. And yet US bond prices are still only at 2%. I've been watching that number pretty closely - US bond auctions failing would be a huge red light for me. But even without the Fed as a buyer, the US government is having very little trouble selling bonds at top prices.
  - cryoshon 11y ago
    I mean, if you want, you can hunt through my comments on this site and reddit/voat around 6 months ago and find me saying then that there would be a crash around this time. I'm not going to claim that I have any deep technical knowledge of the stock market, but the writing has been on the wall for quite a while.
    - cbr 11y ago
      I just skimmed your comments here between 118 and 250 days ago, and I don't see anything predicting a crash to come in September or any other time.
- cryoshon 11y ago
  I don't gamble and I don't have enough money to gamble, and, even if I did, I'd have been wrong by a few weeks anyway. It's more of a morbid curiosity for me.
- FilterSweep 11y ago
  I'm guessing most HN commenters don't have the liquidity to become rich off a crash, unless they had knowledge in specific industries and companies that were set to get hit hardest. Not all Chinese sectors of industry are equally hurt by this collapse. Besides, it wasn't just this commenter who predicted it. Many have before. In fact, even the laypress TV news like 60-Minutes have pointed out issues that will cause major growing pains to China. Run a Google search, click "Search Tools", and query the date range from the beginning of last year to end of Spring this year.
  - peteretep 11y ago
    People have been saying the Chinese economy will crash for well over a decade. Wish I'd gone all in ten years ago...
  - nostrademons 11y ago
    The problem is that many people are continously predicting a crash. If you grant that they're right now, you also have to grant that they've been wrong for years. Even a broken clock is right twice a day.
    - JoeAltmaier 11y ago
      Not fair. A well-regulated system would NEVER crash. That this one does, and folks predicted it, has nothing to do with timing, and everything to do with cogent analysis of a flawed system.
      - ubernostrum 11y ago
        Predicting market crashes is like predicting the end of the world. When it actually happens (in both cases), there will be some subset of people whose published prediction is close to or even exactly matches the date when it finally did happen, and those people will gloat about it. But for every one of those people there are thousands, possibly millions or more others whose prediction dates came and went with no catastrophe occurring. Given the huge number of people who publish their predictions, then, we have to ask which of these is more likely: 1. The people who got the date right -- either exact, or within a certain small window of the actual date -- had some genuinely deep insight missed by others, which allowed them and only them to make a correct prediction, or 2. Given a large enough segment of people making predictions, some subset of them will have their predicted date match the actual date purely by chance. For example, predicting market trends five years out only gives five years in which something can happen, or twenty quarters, or sixty months, or 260 weeks, or 1,826 days to peg your predictions onto. If the number of people making predictions is large enough, all dates are likely be covered by at least one prediction.
- photosinensis 11y ago
  Yeah, it should. He should have known to short-sell pretty much everything if he really predicted it. I remind everybody that it takes no money to short sell. If you really think everything is gonna tank, do it. Put your skin in the game.
  - AnimalMuppet 11y ago
    Note well, however: This is almost always terrible financial advice. Don't do it unless you're prepared to be bankrupt if you're wrong.
    - photosinensis 11y ago
      Yep. Short selling is usually very bad financial advice, outside of some very specific situations where you have solid reasons to believe that prices will fall. But if you're going to say financial catastrophe is right around the corner, put some skin in the game. Be prepared to go bankrupt if you're wrong. It's easy to say "I saw it coming!" after it's happened. But if you saw it coming, why didn't you do something to take advantage of the situation (given that doing something about it is pretty much impossible)?
sillygeese 11y ago
> How is it fair that the markets get put on pause if they're failing? I really don't understand. That just means the ruling class is in panic mode, trying to prevent the inevitable from happening, just like their peers in China recently. In China they managed to temporarily stem the tide, but the real crash is still coming, of course, just like it is all over the West.
pvnick 11y ago
Why did you predict a meltdown?
branchless 11y ago
Sorry but how do you know enough to "predict" a September 2015 meltdown and then um and ah about whether this might be a correction? It's 6 days short of September and you are not sure? Pardon my skepticism.
- cryoshon 11y ago
  Hey man, I have an amateur's knowledge of the market, but I keep up with geopolitics. I didn't make this call based off of technical knowledge, more of an unscientific gut feeling based off a ton of factors I probably can't even name in detail.
  - branchless 11y ago
    Is this satire? Not sure. If it's genuine why post about your gut feelings where you have no skin in the game and can make calls for a crash over and over? Stopped clock and all that.
rcavezza 11y ago
Can you elaborate on your prediction? I'm interested in the details.
- cryoshon 11y ago
  A few factors that were extremely evident from 6+ months ago: 1. US stock market is massively overvalued due to being propped up by QE for years 2. China's growth rate is largely fabricated 3. Russia's oil economy is finished as a result of sanctions 4. European troubles with Greece are undermining confidence in the EU 5. Japan's economy is weak due to demographic slide 6. Nigeria's growth is weakened due to instability 7. Consumer demand in the US and much of Europe is weak due to poor wages and high real unemployment 8. US stocks are being pumped as much as possible by hollowing out companies for short term gains, handicapping their long term capacity to keep providing gains The actual date was picked "7 years-ish after the last financial meltdown" because sometimes these things follow roughly 7 year cycles.
joeyspn 11y ago
> It's hard for me to tell whether this is just a "correction" or an actual meltdown. You can't really anticipate the exact timing of plunges, but feels like the start of the financial crash that many people has been expecting for this September. This has been talked during months in non-mainstream financial websites like ZH. So it shouldn't really come as a surprise to anyone that follows the markets closely... > How is it fair that the markets get put on pause if they're failing? I really don't understand. Deutsche Bank said this morning: "The fragility of this artificially manipulated financial system was exposed over the last couple of days of last week. It all ended with the S&P 500 falling -3.19% on Friday - its worst day since November 9th 2011."
abritinthebay 11y ago
It's fair in the same way banks closing when there's a run on them is fair; for the same reasons. Basically to let cooler heads prevail and prevent worse consequences.
Retric 11y ago
-markets get put on pause The day to day stock market has limited liquidity. Most of the time people have enough buy and sell limit orders to keep the price reasonably stable. (Sell if price reaches X, or buy if it falls to Y.) But, if the price falls say 10% more people not actively looking at stock prices are going to get in on the action.
at-fates-hands 11y ago
>> I wonder how this will affect my life, if at all. Depends on where you invested your money. A lot of 401K's lost close to 40% of their value after the 2008 crash. A lot of people near retirement had high exposure since most of their investments were in equities (90% or more) and lost even more. I'm pretty sure this is just a correction. You should get concerned when the market goes down and stays down. As pointed out earlier, the market has already gained back most of the losses already.
swalsh 11y ago
A pause makes sense, if you study this history of sell off's, they're often emotional... and sometimes technological. A pause gives the market time to recollect itself.
csixty4 11y ago
> How is it fair that the markets get put on pause if they're failing? I really don't understand. The "circuit breaker" was put in place in response to the 1987 "Black Friday" event. It was the early days of automated trading, and computers got the lion's share of the blame. The "circuit breaker" is intended to shut down machines that can drive the market downward faster than people can react. It also shuts out people making panic decisions without thinking at all. Basically, everyone gets a "time out".

kasey_junk 11y ago

It's not "fair", but it is a legal requirement. You should definitely remove the idea that markets are "fair" from your mind. If they were "fair" that would be a lottery not a market.

andrelaszlo 11y ago

"I had predicted the actual meltdown for September of 2015, but I guess this is pretty close. I wonder how this will affect my life, if at all." If you predicted it, then it should at least make you rich? :)

ramblerman 11y ago
Thank you. This cognitive fallacy of "I knew" and "I was saying it long ago" etc... really irks me. Especially in something like stocks you are 100% right, put your money where your mouth is and spare us the story of your grand predictive prowesses.
- MCRed 11y ago
  I predicted the 2008 crisis in 2001. (Well an article on http://mises.org http://mises.org made it clear it would happen.) This was before the housing bubble started to inflate, and was easy to expect due to the changes in the CRA and the artificially low interest rates. I profited from the bubble quite well, decided the top had been hit when things got really wonky and got out of the market in 2007. I was a year early, but I'm not complaining. It's not a fallacy, you can do it, if you understand economics. The problem is, most people involved in stocks are more interested in technical analysis and tea reading than fundamentals of economics. It's the fundamentals of economics that drive "black swan" events. From 2001-2007 I constantly saw people claim there was no bubble, I constantly saw people say things like the economy is good and healthy. I constantly saw people pretend like the fed wasn't blowing up a balloon. Article after article was published spinning tales to pretend like up was down and down was up. And then in 2008 when it popped, I constantly saw people claim there was no way to see it coming. I saw it blamed on Wall Street. And since then I've seen article after article published to misdirect and mislead about what was going on, saying up was down and down was up, to service the narrative. The key indicator of a science is the ability to make predictions... yet the "dismal science" of economics is portrayed by politicians as incapable of saying anything, because they use it to pitch self serving narratives. But the reality is, good economics has predicted every major crash, and its reasons. You can't necessarily know the timing-- I was off by a year, and I have no clue when the next one is coming. ------- I see I've been slow banned and am getting brigade downvoted across all of my comments. This harassment is typical on hacker news when you think for yourself and don't tow the party line. Jesus, what draconian filter bubble. That's fine, my time here was largely wasted anyway. Here's the comment I was going to make below, but now am not allowed to: I've been slow banned so I expect a hell ban is coming, I don't know why, but I guess its because I'm not on the praising obama bandwagon. So this may be my last post, if I'm ever able to post it. Yes, if I'd just stayed in with everything for 6 months or a year I would have been worse off. I was pretty close to the top, in what I was investing in. I did sense that the market got weird- the response was not what it should have been based on the macro events. When things stopped making sense, I got out... If I hadn't gotten out at all I would have lost a lot of money - whether you measure to 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015. Those investments were plays on the bubble... not investments that make sense after the bubble. It's difficult to do long horizon investing when the market is so manipulated- by the government and by the messed up regulation-inhibited outdated exchanges. But you can know the fundamentals. The problem is, a lot of people emotionally don't want to face reality, and a lot more people get rich selling them fantasy. No, the US economy is not doing well. Hell, the US government can't even sell bonds, it's selling them to itself with the Fed fabricating money to buy them.
  - kasey_junk 11y ago
    Have you done analysis on: a) what would have happened had you stayed in for an extra month? An extra 6 months? The full year? b) what would have happened if you hadn't gotten out at all? The only reason I ask, is that most of the studies I've seen show that being able to predict macro level shifts in the market up to and including within 1 year time frames are largely less valuable than people would think. Especially for people doing long horizon investing.
  - peteretep 11y ago
    The problem with a sample size of 1 is that you could well have just gotten lucky
  - forgetsusername 11y ago
    >downvoted across all of my comments Maybe you're being down-voted because you're just a guy on the internet, bragging about how you saw it coming (7 years in advance!), timed it perfectly, made a bunch of money, and are now lecturing us on how it's "easy"...without a shred of evidence?
    - mjevans 11y ago
      I think you're not thinking critically enough in interpreting what he had said. More or less, he had said 'I felt it was unhealthy 7 years in advance'. The actual 'prediction' was only a year or two from the event in question; 'the market didn't make sense' and reacting to that.
  - AnimalMuppet 11y ago
    I heard of a guy who made a lot of money in the stock market. Somebody asked him how he did it. He said, "I always sold too soon." Don't kick yourself for getting out a year early. It's way better than half a year too late. However: > the US government can't even sell bonds, it's selling them to itself with the Fed fabricating money to buy them. That part is over, and has been for months. And yet US bond prices are still only at 2%. I've been watching that number pretty closely - US bond auctions failing would be a huge red light for me. But even without the Fed as a buyer, the US government is having very little trouble selling bonds at top prices.
- cryoshon 11y ago
  I mean, if you want, you can hunt through my comments on this site and reddit/voat around 6 months ago and find me saying then that there would be a crash around this time. I'm not going to claim that I have any deep technical knowledge of the stock market, but the writing has been on the wall for quite a while.
  - cbr 11y ago
    I just skimmed your comments here between 118 and 250 days ago, and I don't see anything predicting a crash to come in September or any other time.
cryoshon 11y ago
I don't gamble and I don't have enough money to gamble, and, even if I did, I'd have been wrong by a few weeks anyway. It's more of a morbid curiosity for me.
FilterSweep 11y ago
I'm guessing most HN commenters don't have the liquidity to become rich off a crash, unless they had knowledge in specific industries and companies that were set to get hit hardest. Not all Chinese sectors of industry are equally hurt by this collapse. Besides, it wasn't just this commenter who predicted it. Many have before. In fact, even the laypress TV news like 60-Minutes have pointed out issues that will cause major growing pains to China. Run a Google search, click "Search Tools", and query the date range from the beginning of last year to end of Spring this year.
- peteretep 11y ago
  People have been saying the Chinese economy will crash for well over a decade. Wish I'd gone all in ten years ago...
- nostrademons 11y ago
  The problem is that many people are continously predicting a crash. If you grant that they're right now, you also have to grant that they've been wrong for years. Even a broken clock is right twice a day.
  - JoeAltmaier 11y ago
    Not fair. A well-regulated system would NEVER crash. That this one does, and folks predicted it, has nothing to do with timing, and everything to do with cogent analysis of a flawed system.
    - ubernostrum 11y ago
      Predicting market crashes is like predicting the end of the world. When it actually happens (in both cases), there will be some subset of people whose published prediction is close to or even exactly matches the date when it finally did happen, and those people will gloat about it. But for every one of those people there are thousands, possibly millions or more others whose prediction dates came and went with no catastrophe occurring. Given the huge number of people who publish their predictions, then, we have to ask which of these is more likely: 1. The people who got the date right -- either exact, or within a certain small window of the actual date -- had some genuinely deep insight missed by others, which allowed them and only them to make a correct prediction, or 2. Given a large enough segment of people making predictions, some subset of them will have their predicted date match the actual date purely by chance. For example, predicting market trends five years out only gives five years in which something can happen, or twenty quarters, or sixty months, or 260 weeks, or 1,826 days to peg your predictions onto. If the number of people making predictions is large enough, all dates are likely be covered by at least one prediction.
photosinensis 11y ago
Yeah, it should. He should have known to short-sell pretty much everything if he really predicted it. I remind everybody that it takes no money to short sell. If you really think everything is gonna tank, do it. Put your skin in the game.
- AnimalMuppet 11y ago
  Note well, however: This is almost always terrible financial advice. Don't do it unless you're prepared to be bankrupt if you're wrong.
  - photosinensis 11y ago
    Yep. Short selling is usually very bad financial advice, outside of some very specific situations where you have solid reasons to believe that prices will fall. But if you're going to say financial catastrophe is right around the corner, put some skin in the game. Be prepared to go bankrupt if you're wrong. It's easy to say "I saw it coming!" after it's happened. But if you saw it coming, why didn't you do something to take advantage of the situation (given that doing something about it is pretty much impossible)?

sillygeese 11y ago

> How is it fair that the markets get put on pause if they're failing? I really don't understand. That just means the ruling class is in panic mode, trying to prevent the inevitable from happening, just like their peers in China recently. In China they managed to temporarily stem the tide, but the real crash is still coming, of course, just like it is all over the West.

pvnick 11y ago

Why did you predict a meltdown?

branchless 11y ago

Sorry but how do you know enough to "predict" a September 2015 meltdown and then um and ah about whether this might be a correction? It's 6 days short of September and you are not sure? Pardon my skepticism.

cryoshon 11y ago
Hey man, I have an amateur's knowledge of the market, but I keep up with geopolitics. I didn't make this call based off of technical knowledge, more of an unscientific gut feeling based off a ton of factors I probably can't even name in detail.
- branchless 11y ago
  Is this satire? Not sure. If it's genuine why post about your gut feelings where you have no skin in the game and can make calls for a crash over and over? Stopped clock and all that.

rcavezza 11y ago

Can you elaborate on your prediction? I'm interested in the details.

cryoshon 11y ago
A few factors that were extremely evident from 6+ months ago: 1. US stock market is massively overvalued due to being propped up by QE for years 2. China's growth rate is largely fabricated 3. Russia's oil economy is finished as a result of sanctions 4. European troubles with Greece are undermining confidence in the EU 5. Japan's economy is weak due to demographic slide 6. Nigeria's growth is weakened due to instability 7. Consumer demand in the US and much of Europe is weak due to poor wages and high real unemployment 8. US stocks are being pumped as much as possible by hollowing out companies for short term gains, handicapping their long term capacity to keep providing gains The actual date was picked "7 years-ish after the last financial meltdown" because sometimes these things follow roughly 7 year cycles.

joeyspn 11y ago

> It's hard for me to tell whether this is just a "correction" or an actual meltdown. You can't really anticipate the exact timing of plunges, but feels like the start of the financial crash that many people has been expecting for this September. This has been talked during months in non-mainstream financial websites like ZH. So it shouldn't really come as a surprise to anyone that follows the markets closely... > How is it fair that the markets get put on pause if they're failing? I really don't understand. Deutsche Bank said this morning: "The fragility of this artificially manipulated financial system was exposed over the last couple of days of last week. It all ended with the S&P 500 falling -3.19% on Friday - its worst day since November 9th 2011."

abritinthebay 11y ago

It's fair in the same way banks closing when there's a run on them is fair; for the same reasons. Basically to let cooler heads prevail and prevent worse consequences.

Retric 11y ago

-markets get put on pause The day to day stock market has limited liquidity. Most of the time people have enough buy and sell limit orders to keep the price reasonably stable. (Sell if price reaches X, or buy if it falls to Y.) But, if the price falls say 10% more people not actively looking at stock prices are going to get in on the action.

at-fates-hands 11y ago

>> I wonder how this will affect my life, if at all. Depends on where you invested your money. A lot of 401K's lost close to 40% of their value after the 2008 crash. A lot of people near retirement had high exposure since most of their investments were in equities (90% or more) and lost even more. I'm pretty sure this is just a correction. You should get concerned when the market goes down and stays down. As pointed out earlier, the market has already gained back most of the losses already.

swalsh 11y ago

A pause makes sense, if you study this history of sell off's, they're often emotional... and sometimes technological. A pause gives the market time to recollect itself.

csixty4 11y ago

> How is it fair that the markets get put on pause if they're failing? I really don't understand. The "circuit breaker" was put in place in response to the 1987 "Black Friday" event. It was the early days of automated trading, and computers got the lion's share of the blame. The "circuit breaker" is intended to shut down machines that can drive the market downward faster than people can react. It also shuts out people making panic decisions without thinking at all. Basically, everyone gets a "time out".