Are We Following The 2008 Equity Market Crash Pattern?
The pattern between 2008 and 2010 to date are quite similar although shifted marginally. This shift means we could see a crash starting in August in lieu of 2008's crash which started in September. The operative word is could.
Annual patterns are influenced by the same cyclical forces experienced year after year. Obviously, amongst other measurable outcomes, we see this in seasonal, weather and financial market patterns. There is always the addition of dissimilar exogenous, one-time and longer term cyclical forces as well that makes each year unique.
2009 was obviously dissimilar to 2008 as political idiots across the world spent unprecedented sums of other people's money in an act of desperation to stave off the imminent collapse of globalization. Now that stimulus is effectively gone. Therefore, it might be possible that 2010 would again follow the same annual pattern as 2008 given nothing has really changed without massive political stimulus. Not necessarily likely but possible.
As it pertains to economics, 2010 differs from 2008 in one main regard. That is, the world is horrifically in much worse economic shape this year. In 2008 everyone, and I do mean everyone, thought there was either nothing wrong with the global economy or the only issue facing the global economy was an American subprime housing bubble. (That seems hilarious now but the same people, both bulls and bears, who thought this crisis was a subprime housing bubble or an issue of confidence are recommending the same ridiculous remedies.) In 2010 the world economy is now on the precipice of a global depression led by the two biggest respective bubbles in history: Wall Street's financial bubble and China's capital bubble.
Absolutely nothing has been fixed. Zilch. Nada. The marching morons that are our politicians are leading us down the path of self destruction and global volatility.
S&P 500 - 2010 year to date
S&P 500 - 2008 year to date
Annual patterns are influenced by the same cyclical forces experienced year after year. Obviously, amongst other measurable outcomes, we see this in seasonal, weather and financial market patterns. There is always the addition of dissimilar exogenous, one-time and longer term cyclical forces as well that makes each year unique.
2009 was obviously dissimilar to 2008 as political idiots across the world spent unprecedented sums of other people's money in an act of desperation to stave off the imminent collapse of globalization. Now that stimulus is effectively gone. Therefore, it might be possible that 2010 would again follow the same annual pattern as 2008 given nothing has really changed without massive political stimulus. Not necessarily likely but possible.
As it pertains to economics, 2010 differs from 2008 in one main regard. That is, the world is horrifically in much worse economic shape this year. In 2008 everyone, and I do mean everyone, thought there was either nothing wrong with the global economy or the only issue facing the global economy was an American subprime housing bubble. (That seems hilarious now but the same people, both bulls and bears, who thought this crisis was a subprime housing bubble or an issue of confidence are recommending the same ridiculous remedies.) In 2010 the world economy is now on the precipice of a global depression led by the two biggest respective bubbles in history: Wall Street's financial bubble and China's capital bubble.
Absolutely nothing has been fixed. Zilch. Nada. The marching morons that are our politicians are leading us down the path of self destruction and global volatility.
S&P 500 - 2010 year to date
S&P 500 - 2008 year to date
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