Prepare for the coming Economic Crash of 2005

[GobGoober]

Just a word to the wise, divest your U.S. stocks and offshore every dime. 80% of the stocks are going to crash due to a loss of confidence from the investor community.

The reason? Sarbanes-Oxley and the lack of compliance. Most companies will not be judged to be compliant because the accounting industry is fearful of being judged as not doing their jobs, so they are taking the harshest possible interpretation of Sarbanes-Oxley, which has verbiage that is so open to interpretation that nobody really knows what it means.

The result will be disastrous. Count on it.

[KurtNYC]

1. I'm out of the market

Holding euros and canadian.

The accounting firms I see are pretty busy. Lots of extra work due to S-O. Possibly they are playing the clients since no one has been down this road before. In other words, it is up to the Accounting firms to decide how much is enough. It is like a cab ride in a foreign city -- if the driver takes the long way, you probably won't know. (In this case it may be the clients who are being 'taken for a ride')

Canada has a target of 83 cents to the USD so I'm done there. But the Euro could go anywhere -- I honestly think $1.80 is possible by the end of 2005.

[MercutioATC]

4. Physical Euros or Euro paper?

[KurtNYC]

6. physical

which is a first - I feel like I should stuff a mattress with it. ;-)

[MercutioATC]

7. I'm thinking of doing the same...

...once I find a simple way of getting them in the U.S.

I'll just use a safe deposit box to store them.

[KurtNYC]

11. My bank would only do Euro-bearing accounts for $1 mill+

and that ain't me. The cheapest option is to withdraw extra euros from my bank's ATMs when I am abroad. Otherwise currency exchange with a reasonable rate.

[MercutioATC]

12. I'm looking into ways to do it now.

There should be a way to get close to foreign ATM exchange rates without leaving the U.S.

[MercutioATC]

2. I'm already 70% in an international stock fund.

10% in a fund that tracks the S&P 500.

20% in a small-cap stock fund.



I don't know if I completely buy into the "sky is falling" hype, but this strategy is working so far...

[ProfessorGAC]

3. You'll Be Waiting Rather Impatiently

Sorry, but there is NOTHING in the econometric models, mine or anyone elses, that would lead to the conclusion of an economic crash.

Now, if you're talking about the stock market, then you should be talking about a market crash and a financial melt-down. The markets are highly speculative and are not the same thing as the economy. As a matter of fact, the only real economic principle the markets follow is a microeconomic one. (Supply & Demand)

There will be no major macroeconomic meltdown in 2005. But, as profitability of large industrial sectors continue to take it on the jaw, and only big oil and defense are making profits as expected levels there will be a run to those equities which will overvalue those and undervalue many other sectors. The market may take 2 years to correct after that.
The Professor

[junker]

8. Aha! The models are flucked up dude. DOW/other indeces maniupulated

Price of gold used to 'hide' inflation.

Flucked dollar is being repatriated by the boat-load.

Next feb auction of Fed backed(debt notes) treasuries will be a bust. Total and complete bust. Why?

Well, dude, your models do not show human-confidence metrics. Our models clearly show foreign confidence at tipping point, and US confidence levels (NO not consumer confidence stats) at only 3 ticks above the 'floor' (support levels). So when the Iraq elections are seen to fail, so does the dollar.

Let me see, how will your models handle a dollar crash (below 80 on the basket)? This will occur before end of Jan.

Plus we now have the local economy (west coast WA, OR, CA) starting to go retro on the velocity of money through the system.

So, mssr. Prof, please enjoy your phishing up the river of Denial, and remember, that in wiemar, it was the salarymen who ended up eating their shorts to survive.

Any human who has their assets in dollars (such as dollar based stocks, or treasuries or bonds or expects to 'make' money on their house) is fucked. This will be very very evident to them by Feb.

Y'all have a good day...

and buck fush,y'all.

[ProfessorGAC]

9. Whatever

When you get your 30th paper on these effects published, let me know. In the meantime, i will not participate in your doom and gloom moods.
The Professor

[CHIMO]

5. Sounds like a good story.

Of course loss of confidence couldn't be due to deficits.

Everything needs a good story.

I can just imagine where this one will lead.

[BillZBubb]

10. Sarbanes-Oxley! Wow! Thanks for the laugh.

I know you can't be serious. At least I hope not.

US stocks may be in trouble, but it has much more to do with the collapsing dollar and mounting US debt than accounting rules.

[WyLoochka]

13. Sarbanes-Oxley is not a laugh

Auditors are actually auditing again, instead of rubber stamping every scheme and scam of corrupt CFOs/CEOs.

Sarbanes-Oxley is quite clear, despite the claims of the OP. But it is not going to be the cause of the coming collapse.

[colonel odis]

14. it'll be clinton's fault when it happens.

see, he got the hoi polloi accustomed to having money and do crazy things like buy homes and educate their kids.

but we're not supposed to do things like that. so if the market crashes and we're all standing in the streets with tin cups, it won't really be a crash (remember, up is down. black is white. war is peace.). it'll just be everything resorting to its natural order.

damn that bill clinton and his penis.