mikesa69

Can a Stock Market Meltdown Happen from Here?

Between Conceptwizard and Richard, nearly all of my bullets have already been fired. Doh!

People are indeed forgetting about the coming commercial RE meltdown, and flat out ignorant of consumer credit (both in actual default rates and as a percent of income).

One last looming item I'll mention in favor of continued financial meltdown would be the jump in Alt-A resets and Prime resets that is just now starting to push its way through the system. Everyone has been almost exclusively focusing on the Subprime resets, but I rarely hear the other forms of ARM resets mentioned. While the amount of subprime resets has mostly worked its way through the system, the amount of the others yet to reset is just now starting to ramp up in a long drive that will accelerate through the end of 2011 before finally dropping off.

In case I'm not being articulate enough, check out the charts at www.businessinsider.co...

I too agree that we'll fail the March lows, but as Richard stated, I feel we aren't going to get there as soon as this Heiko Seibel analyst has proposed. After a brief pullback of no more than 10-23%, I think we'll continue to ride the recent wave of optimism for the C leg of an ABC-up structure before finally turning down for a scary drop to retest the lows. Potential timing based on historical trends would suggest a top as early as May options ex.

I also totally disagree with anyone's theory that we'll be out of this mess entirely within a year or two. There are too many macro-forces working in harmony against America's continued (unsustainable) economic prosperity for us to pull out of this mess anytime soon. And the policies of this administration (and the last, for that matter) are only going to aggravate the situation, not help it.

That's my $0.0008. (Note: My "2 cents" have been adjusted by -96% to reflect the loss in value of the US dollar since 1913 when the fed was created.)