Investment Analyst: A HUGE Stock Market Crash Is Coming

Investment analyst and stock market guru Mark Mobius has been in the business a long time.  At 81-years-old, the market analyst says that a huge stock market correction is coming and it’s going to cause a crash and be painful for everyone.

According to Mobius, the former executive chairman at Templeton Emerging Markets, all the indicators now point to a great fall in the S&P 500 and the Dow Jones. “The consumer confidence is at an all-time high in the US, and it’s not a good sign,” he said. “The market looks to me to be waiting for a trigger that will cause it to tumble.”

Mobius continued saying, “I can see a 30 percent drop.” And he isn’t the only one warning of a massive crash.  Jim Roger’s latest prediction was that we were going to see “biggest crash in our lifetimes,” and possibly, very soon. One of the world’s richest men, Bill Gates, also said that a 2008-like financial crisis was a certainty.  Peter Schiff has also warned the next crash will be worse than the Great Depression.

“The bad news is, we are going to live through another Great Depression and it’s going to be very different. This will be in many ways, much much worse, than what people had to endure during the Great Depression,” Schiff says. “This is going to be a dollar crisis.” – Peter Schiff

And movement away from the United States dollar has already begun and Schiff has warned that those who don’t get out of the dollar will be wiped out.

Mobius, who is also a 40-year veteran investor and predicted the start of the bull market in 2009, warns that any drop could be strengthened by the increasing use of exchange-traded funds (ETFs), which account for nearly half of all trading in US stocks. The ETFs could cause further declines once markets fall. “You have computers and algorithms working 24/7 and that would basically create a snowball effect. There is no safety valve to prevent further falls, and that fall would escalate very quickly,” Mobius told the media. “ETFs represent so much of the market that they would make matters worse once markets start to tumble.”

But Mobius did say he’s not certain what the trigger will be that will cause the US stock market to crash horrifically. “You can’t predict what that event might be – perhaps a natural disaster or war with North Korea,” he said.

 

Peter Schiff: In The Impending Collapse ‘Everything That Can Go Wrong, Will’

The impending economic collapse is hidden from most. People only see a rising stock market, not the negative underlying factors that will cause the whole system to crash.

The weakening of the U.S. dollar is just getting started, warned veteran market forecaster Peter Schiff, CEO of Euro Pacific Capital. “We have just begun a major, long-term bear market in the dollar,” he said, which should cause a spike in oil prices. He thinks oil will reach $80-$100 a barrel in 2018. The commodity currently trades at roughly $63 a barrel. Shiff focuses on oil as just one example of the inflation that will help collapse the dollar.

When the price of oil rises, it reverberates through the economy. Peter called it a gigantic tax hike for consumers. But the Fed is still worried prices aren’t going up fast enough and that they won’t hit the mystical 2% goal.

“They’re going to hit that out of the park. They’re going to be looking at 2% in the rearview mirror – in the distant rearview mirror. That is going to be the big story. They’re going to way overshoot and they’re not going to be able to do anything about it.” –Peter Schiff

Schiff also warns that the dollar’s decline is just getting starting.  He also says “everything that can go wrong, will.” We are not experiencing economic growth.  We are experiencing inflation.

“High inflation is not good for the dollar. By definition, high inflation means the dollar is losing purchasing power. If the dollar is losing purchasing power, that is bad for the dollar,” Shiff explains.

“If they [the public and investors] don’t think there’s going to be inflation, they’re wrong. Those expectations are totally wrong. People are ignoring what is going on in the currency market, what’s going on in the commodities markets, what’s going on in the bond markets. All of this stuff is flashing inflation – at least the way you measure it – consumer prices.” –Peter Schiff

 

Shiff continues with even more dire news. “We are very close to a major breakdown in the bond market. Now, I know the bond market has dodged a lot of bullets…so you could say ‘cryin’ wolf. Look how long the bond market has held in there. But you know what? It’s gonna hold up until it doesn’t. And when it breaks…this bond market is gonna unravel. The whole thing could unravel very, very quickly. This is what is so dangerous here. You have the bond market potentially about to break down, a major 30-year bull market about to unravel, you have the dollar getting ready to go over the edge of a cliff. “

Shiff also warns to not put your trust in the government or their bonds.

“Everybody belives the fed is going to shrink it’s balance sheet. Now, I don’t believe that but the markets believe it. Now, I checked the balance sheet on Thursday again. So far, it hasn’t shrunk at all. So there’s been no tapering.

The risk of a big drop in the bond market has never been this high. And what happens if the bond market tanks? That’s it. The stock market is gonna crash…there’s a massive crash coming. And if the fed is gonna panic, they’re gonna try to stop it.”

The feds will try to fix a stock market crash by not raising rates, which will lead to the imploding of the dollar.  Everything that can go wrong, will.

“I don’t know if this is going to unravel very quickly.  But it is close,” Shiff warns.

This Is What A Pre-Crash Market Looks Like

This report was originally published by Michael Snyder at The Economic Collapse

The only other times in our history when stock prices have been this high relative to earnings, a horrifying stock market crash has always followed. Will things be different for us this time? We shall see, but without a doubt this is what a pre-crash market looks like. This current bubble has been based on irrational euphoria that has been fueled by relentless central bank intervention, but now global central banks are removing the artificial life support in unison. Meanwhile, the real economy continues to stumble along very unevenly. This is the longest that the U.S. has ever gone without a year in which the economy grew by at least 3 percent, and many believe that the next recession is very close. Stock prices cannot stay completely disconnected from economic reality forever, and once the bubble bursts the pain is going to be unlike anything that we have ever seen before.

If you think that these ridiculously absurd stock prices are sustainable, there is something that I would like for you to consider. The only times in our history when the cyclically-adjusted return on stocks has been lower, a nightmarish stock market crash happened soon thereafter…

The Nobel-Laureate, Robert Shiller, developed the cyclically-adjusted price/earnings ratio, the so-called CAPE, to assess whether stocks are likely to be over- or under-valued. It is possible to invert this measure to obtain a cyclically-adjusted earnings yield which allows one to measure prospective real returns. If one does this, the answer for the US is that the cyclically-adjusted return is now down to 3.4 percent. The only times it has been still lower were in 1929 and between 1997 and 2001, the two biggest stock market bubbles since 1880. We know now what happened then. Is it going to be different this time?

Since the market bottomed out in early 2009, the S&P 500 has been on a historic run. If this rally had been based on a booming economy that would be one thing, but the truth is that the U.S. economy has not seen 3 percent yearly growth since the middle of the Bush administration. Instead, this insane bubble has been almost entirely fueled by central bank manipulation, and now that manipulation is being dramatically scaled back.

And the guys on Wall Street know what is coming. For example, Joe Zidle says that this bull market is now in “the ninth inning”…

Joe Zidle, of Richard Bernstein Advisors, is arguing that the bull market has entered the bottom of the ninth inning.

“This is a late-cycle environment,” Zidle said on CNBC’s “Futures Now” recently.

“In innings terms, they’re not time dependent. An inning could be shorter or they could be longer. It just really depends,” the strategist said.

This bubble has lasted for much longer than it ever should have, and everyone understands that a day of reckoning is coming.

In fact, earlier today I came across an article on Zero Hedge that contained an absolutely remarkable quote from Eric Peters…

“We are investing as if 1987 will happen tomorrow, because it will,” said the CIO. “But we need to be long, or we’ll be out of business,” he explained, under pressure to perform. “So we construct option trades that are binary bets.” Which pay X profit if stocks rally, and cost Y if markets fall. No more and no less.

“What you do not want is a portfolio whose losses multiply depending on the severity of a decline.” That’s what most people have today. “At the last stage of the cycle, you want lots of binary bets. Many small wins. Before the big loss.”

“Are we at the start or the end of the ‘Don’t know what I’m buying’ cycle?” asked the same CIO. “No one knows.” But we’re definitely within it.

“When their complex swaps drop 40%, and prime brokers demand more margin, investors will cry ‘It’s not possible!’ But anything is possible.” The prime brokers will hang up and stop them out.

In case you don’t remember, in 1987 we witnessed the largest one day percentage decline in U.S. stock market history.

When it finally happens, millions upon millions of ordinary Americans will be completely shocked, but most insiders know that the other shoe is going to drop at some point.

In particular, watch financial stock prices very closely. Last month, Richard Bove issued a chilling warning about bank stocks…

One of Wall Street’s most vocal bank analysts is troubled by the rally in financials.

The Vertical Group’s Richard Bove warns that the overall market is just as dangerous as the late 1990s, and he cites momentum — not fundamentals — as what’s driving bank stocks to all-time highs.

“If we don’t get some event in the economy or in politics or in somewhere that is going to create more loan volume and better margins for the banks, then yes, they would come crashing down,” Bove said Monday on CNBC’s “Trading Nation.” “I think that the risk in these stocks is very high at the present time.”

It isn’t going to take much to set off an unstoppable chain of events. Our financial markets are even more vulnerable than they were in 2008, and the right trigger could unleash a crisis unlike anything we have ever seen in modern American history.

Unfortunately, most Americans keep getting fooled by the artificial boom and bust cycles that the central banks create. Right now most people seem to have been lulled into a false sense of security, and they truly believe that everything is going to be okay.

But every time before when the market has looked like this a crash has always followed, and this time will be no exception.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream. 

If you want to know what is coming and what you can do to prepare, read his latest book Get Prepared Now!: Why A Great Crisis Is Coming.