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What could be some of the Black Swans in 2017?

5K views 27 replies 9 participants last post by  Nelley 
#1 ·
Seems equities all over the world just keep inching upward. With High Frequency Trading creating bogus volumes, the trade volumes don't seem to be a good representation of whether the market is topping up or not.

Are trade volumes still reasonable as investors pile into equities?



US Feds seem only willing to raise interest rates gradually this year, there's no news what the Feds will do with their $2.6T treasuries and $1.9T MBS and if they are really going to slowly reverse this QE. Bernanke back in 2013 was mentioning this but the Feds keep rebuying the securities.

There's elections in EU but probably a non-event.

Greece defaulting, another non-event.

Trade disputes, won't be signed into law so soon?



Your thoughts on what could actually dent this whirlwind romance with equity markets all over the world?
 
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#4 ·
The thing is they will come up with all sorts of reasons why the market falls when it does and blame it on that. Yet the market will go up for those same reasons.

Look at the US election night and stocks were dropping hard because Trump was elected. Then it went up because trump was elected.

In the past markets would rise on interest rate hikes because the market thought the Fed had things handled and will keep the economy from overheating. However if the Fed raised enough and we got an inverted yield curve that would signal a problem for the economy and markets 6 to 12 months later.
 
#9 · (Edited)
Yeah, I think most financial reporters already have two stories ready to publish before the market even closes-- one about why the market tanked and the other why the market went up.

The thing (at least I read or anecdotally in the past) was for many hedge funds or big institutional players who can short based on their mandate, they like to scoop up shares on the cheap and then pump the shares back up so they can sell. This has probably been made easier with ETF liquidity. I'm not so sure if this is still rampant nowadays but there will always be corrections facilitated by some big no good players to scoop us shares for cheap and then the rise back up where they unload.

This is probably why going index investing makes a lot of sense and a safer bet because whatever company shares are tanked, there will be other company shares that would be hyped up and so with broad based indexes, stock market levels will tend to still go up because of the sheer number of pension funds and institutions that need to make their money work for them (i.e. regular buying of equities).

Only the Chinese stock market index seems to have been stagnant from late 2015 (when they tanked from 6k) up to this time. Russia, Brazil, Argentina and other country ETF's bounced back from their low and this was mostly attributed to the very low oil price of last year.

Even in the most corrupt country, eventually the index ETF will eventually rise because of the pump and dump systems a lot of brokerages / market makers do to make lots of money. If the market was flat, there's so much less money corrupt institutions can make.

The US equities market is the largest so perhaps it's harder to tank but still lots of institutions short securities without borrowing them. I've seen it while auditing at CDS (Canadian Depository for Securities) where they have a naked short report.
 
#5 ·
I spoke to a TD analyst yesterday.
She said, as most are aware, that the Toronto RE market is prone to implode/explode - there will be consequences.
Also, she suggested that the EU will continue to experience a series of jolts, shocks and other changes that may spell the end of the union by 2020...again...potentially big problems.
so there's a few black swans...
..or more like black "pterodactyls" ...ha
 
#8 ·
Brexit may be considered the first domino among many to fall as a chain of events - which I may add is impossible to predict - follows.
Elections in the EU are coming up - Italy, Germany & France. The political policies (especially that relate to immigration and debt) that develop that will really be the events to follow.
Brexit 2016 was a hiccup.
The concern is that politicians and political parties now see events in the US as the new normal. Perhaps the new normal has some consequences - I really do not know, nor does anyone truly.
 
#15 · (Edited)
You can't predict a black swan, which is exactly what makes it a black swan. Therefore, there is no point in trying to discuss a black swan, as by it's very definition it is unpredictable. Said another way, it can't be meaningfully discussed as the contents of the discussion cannot end up being a black swan event.
 
#17 ·
Over the past 180 yrs the 60 year cycle of Oct panics if it happens in Oct 60 plus or minus 60 yrs will see a panic from Late Aug to Early Dec , decennial pattern, Martin Armstrong pi cycle topping this year or 2019/2020 only 2 possible dates for phase transition top then crash & burn.
 
#21 ·
There is a ton that has gone on to scam us right now from stocks, bonds, currency markets and commodities especially precious metals. We know stocks and bonds are propped by the Fed and gamed. We know gold and silver are kept in check to keep the dollar's value as well as other currencies by hiding inflation. We know many car loans are a farce in the US as well. What we don't know is where or when it will end and the re-pricing starts. So internalaudit is right something is percolating but we don't know when it will all end.
 
#25 ·
Most fail to look @ the price structure with in price structure. The market has been vibrating higher since the Dows inception though looking @ the structure with in the structure price pattern is fractal. Going back to @ least yr 1982 & perhaps yr1932 the market needs to correct the entire rally from those dates though structure still needs to subdivide higher first to finish bull market is primary view of price structure. I don't think many have any clue how powerful the next bear is going to be they just see the long term trend as up but fail to closely examine the structure of price & fail to realize the high probability price pattern is the biggest correction the DJI will see since its inception
 
#26 ·
#27 ·
Thanks New Dog.

It's the lower interest rates that are causing money to chase after everything -- real estate, equities, high yield bonds, etc.


At rock bottom interest rates, the only companies going belly under would be those that have stupid and inept business models or those who bought assets at all time highs only to see them get deflated.
 
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