Confirming The Flash Crash Omen

[Joanne98]

The highly discussed and quickly forgotten Flash Crash was an omen of what lies ahead for the financial markets. It was a uniquely distinctive occurrence relative to anything we’ve ever experienced. Likewise, what we are about to witness will be startling and never before observed by this generation of investors. After only thirty days the Flash Crash signal has become unambiguous and historians will wonder why the public didn’t react sooner to its clarion call. Prior to the May 6th Flash Crash I laid out what to expect in “Extend & Pretend: Shifting Risk to the Innocent”. The ink was barely wet before its predictions began to rapidly unfold. The basis for the predictions was the similarities between the rally we have experienced since March 2009 and the rally prior to the 1987 crash. It was striking in comparison to the amount of rise, the rate and the pattern, but more importantly the reason for both rallies. The 1987 crash was attributed to Portfolio Insurance. In 2010 it’s about what is referred to as the ‘son-of-portfolio insurance’ or Dynamic Hedging.

http://www.zerohedge.com/article/guest-post-confirming-flash-crash-omen

[ixion]

1. I agree. People are ignoring some very plain warning signs...

As for me, I've planted a garden, am collecting rainwater (now trying to figure out a good way to filter oil out), am using solar power, and my chickens will be here next week.

I started stock-piling food rather instinctively in 2008. That was a first.

I planted a garden last year, but it was too far away to attend to. I planted another one this year in my backyard.

These things that I'm doing I seem to be doing unconsciously, yet I feel an urgent need to get them done. Something is happening, in my opinion. I wouldn't be doing these things otherwise.

[JuniperLea]

2. Whew... not alone...

I'm feeling it too...

Good reading:



http://www.foxfire.org/

[ixion]

3. Cool link, thanks! And nope, we're not alone...

Some of my friends think I'm going too far, others are doing the same thing I'm doing. At the very least, we're honing important life skills. :)

[Bigmack]

6. Been there....

Doing that.....can't decide if we're just paranoid or onto something, but it sure feels like there's a decidedly dubious future hanging out there. Ms Bigmack

[pscot]

7. Isn't that kind of like predicting a hard winter

because you've decided to grow your hair long? Cultivating habits of self sufficiency is a good thing and I agree with your premise: there are hard times coming. I'm just a bit suspicious of your reasoning here. No offense intended.

[ixion]

8. In all fairness, I was waxing existential...

I have some very specific reasons why I believe there is going to be a crash, a.k.a. a return to real market value.

[jwirr]

4. Gardens, chickens, feeder pigs, 2 greenhouse, fishing equipment

and tools. We are hoping our neighbors are doing some of the same. Survival will be harder if our neighbors are starving.

[orwell]

5. The '87 crash was much worse...

...as a percentage fall they are not even close.

I was sitting at a trading desk. I remember it well...