Do You Think We Are Due for Another Stock Market Crash ? if So, What Do You Think The Cause Will Be ?

balotelli14 on 08/08/2017 - 09:48

Watch the market a lot and going from history, we experience some sort of major crash every 8 - 12 years on average. Don't you guys think we are OverDue and if so what do you think will cause it this time? I can think of 2-3 reason.

  1. Aussie Housing Market (Soon as interest rates rises, which they will, I don't see how people can afford over inflated prices) We have the highest household debt in the world and the most over valued property, can't think of a more dangerous scenario

  2. War. I smell something happening between US and North Korea. Also, tensions are rising in the South China Sea as many countries are now 'exercising their right to sail in international waters'

  3. Donald Trump, need I say more.

What do you guys think?

Financial

Comments

  • Lando on 08/08/2017 - 09:55
    -3

    War. I smell something happening between US and North Korea

    1. I hope it crashes and burns. Greedy Australians need to realise that massive debt, virtually no wage growth and oversupply of apartments only leads to a bad outcome. America use to hand out loans with no real idea on how customers would pay it back if they faced headwinds. Look what happened to their property market. lol

    2. It won't affect us. North Korean economy has little to no effect on the Australian or Chinese markets (except coal??). Who really cares about those numbers anyway? They'll just bounce back in a week as they always do.

    3. He'll be impeached. Has a pretty good team surrounding him on the national security front, though.

    • CyberMurning on 08/08/2017 - 10:22
      -1

      "Greedy Australians need" nope, it should be "Greedy Overseas investors need"

      • Lando on 08/08/2017 - 10:37
        +9

        Who sells property to overseas investors? Aussies.

        Who makes the rules about foreign investment? State and federal governments.

        • echelon6 on 15/08/2017 - 12:56
          -1

          As if you wouldn't do the same if you were in those aussies' shoes.

  • Diji1 on 08/08/2017 - 10:22

    Hopefully it occurs because Liberal or Labour do not get voted into power next election.

    • Lando on 08/08/2017 - 10:38
      +2

      Labor*

      Cmon man. I don't usually correct people's spelling, but that extra 'u' makes all the difference

  • CyberMurning on 08/08/2017 - 10:23
    +2

    when property crash then people will look for ie buying other investments ie stock market and gold.

    • Tythefly86 on 08/08/2017 - 22:48

      Time to invest in bitcoin. I believe Crypto currency will help crash the markets, Fiat is going down. Since January the total market cap of crypto currency has gone from 18 billion dollars to 118 billion dollars. That's 100billion dollars poured into the market in 7months! With names like the Rothchilds investing in Bitcoin and companies like Microsoft and Expedia accepting it as payment, atm's already out and more coming, it's only going up in my opinion. Bitcoin alone has risen from 2800 usd on friday last week to $3400usd+ right now, I know this because i bought 2,000au in bitcoin on friday and I would of made a nice $500au or so if i decided to sell but I'm holding because over the last 7 years Bitcoin has an average daily value increase of 0.05%, that's about 180%/year.

      • Baghern on 15/08/2017 - 15:24

        You do know that 95% of that 100bil is the Chinese trying to get their money out of China right…

      • hamerix on 01/01/2019 - 04:45

        its 01/01/2019 I just read it and was wondering how you did with your investment?

  • Kangal on 08/08/2017 - 10:27
    +1

    China is keeping USA at an arms length, and pulling further and further away from North Korea.
    If there is a war, USA's biggest hurdle would be to not attack from the rear (China/Russia).
    And their biggest concerns would be to neutralise/protect attacks set upon Japan and South Korea.

    With that said, USA would win easily.
    However, that victory would prove fruitless for USA. It won't gain them anything.

    The best move USA can do to North Korea would be to starve their power (economical, electrical, military, nuclear) and influence (China, Russia, their own citizens).
    That way the people might have a chance at a revolt, and overthrow their government anyway.
    Which would be the more stable long-term solution.

  • Word on 08/08/2017 - 10:37

    60y.

  • TheBilly on 08/08/2017 - 10:44
    +7

    1. It won't crash. It will just stagnate or correct itself slightly. Immigration will add to the supply issues we are already facing as well. Australia isn't immune to global economic shifts, however we are not directly affected either. The property collapse in America was a different kettle of fish. Watch the movie "The Big Short".

    2. A proxy to world war 3 has been going for the passed 18 years to consolidate the global oil/currency market. It is an economic war, the US dollar is currently backed by oil, not physically like gold used to back the dollar where you had store rooms of reserves, but by demand. For example. The biggest oil producers (Saudi/Gulf States/Malaysia/Norway blah blah) all have a pact with the US that they will buy sell trade their oil in US$ for military protection and controlled demand amongst other things - indirectly as a result of this the demand of the US $ is hedged to the demand of oil. As oil demand rises (which it always will as it is a finite resource) so does the US$ as you can't buy oil without that currency. Iran is the last major independent oil producer/exporter outside of the major countries (Gaddafi and Saddam were originally US backed but wanted to go independent with an African union currency and an Arab union currency) however they are neutralised and chaotic cesspools now, the middle east situation has really shifted in that direction now with Syria Irans biggest ally now becoming a Cesspool. However things have heated up, because power houses like China / Russia do not want to be solely dependant on a US currency backed oil producer, especially in a conflict situation as they all fancy themselves as the newest global power house. As a result Russia / China have propped up Iran and Syria to ensure the last independent oil producer doesn't fall, and the US has injected weapons into ISIS and other rebel groups through their allies to ensure the chaos in the region, to bring down the remaining government. This if successful will consolidate an oil monopoly. A lot of people don't know that Russia already has troops on the ground in Syria. Everything else is just people positioning themselves readying for the outbreak i.e. South China Sea/North Korea/Phillippines etc. the real melting pot is Syria and Iran, where all the big boys have injected their resources, hoping they don't have to step in themselves. It's only a matter of time till they will have to.

    3. I don't hate him, I don't like him. But I will say he isn't doing anything that much worse that what Obama did. Obama just had a more politically correct approach. Statistically they are the same.

    • [Deactivated] on 09/08/2017 - 10:38

      No mention of Israel? I agree with everything else you said

      • TheBilly on 09/08/2017 - 11:03
        +3

        It's really tough because of the following - An economic war is waging and a lot of people loose sight of that; we tend to get caught up in the physical positioning, military attacks, alliances, uprisings, chaos, terrorist groups, religion and all that jazz because that is all we see, but we stop focussing on the economic end game … However all those things listed above are just by product of the economic war - I think Israel is a by product as well, they are a very strong and a handy ally to have in the oil hot bed hence why they have been positioned there. It is very intelligent foreign policy on part of the US because the policy makers know that, whilst we can secure oil trade in US dollars by signing international agreements and ensuring security for those countries, this agreements security is only as strong as the alliance with the government at the time. For example, Saudi Arabia is currently a dictatorship ruled by a specific family placed there with the financial and military support of the US, they have been ruling the kingdom for about 100 years. What if one day the masses just stood up and a civil war broke out for democracy instead of a dictatorship. Who ensures that the oil is still traded in US $ and not changed to riyals? In my opinion Israel serves just this purpose, they are a satellite base of the military industrial complex that supports this economic dominance. The whole Jewish/Zionist/Muslim thing just enabled it to happen.

      • TheBilly on 09/08/2017 - 11:09
        +1

        https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ…

        Food for thought - imagine if Saudi stopped trading oil in US dollars tomorrow. Theoretically the demand for US dollars would drop by a proportional percentage, that is ALOT. That is like economy destroying drops in demand.

    • D C on 10/08/2017 - 01:01
      +1

      Obama just had a more politically correct approach. Statistically they are the same.

      No, there's just no comparison between Obama and Trump.

      Obama sorted out world peace on his first day! Even got a prize for it! Gold medal and all! Actually my memory is a bit hazy, he might have done all that before he became president.

      And what's Trump accomplished? Nothing, apart from a bit of golf. Well, obviously he can't bring peace to the world, so he has to break it first in order to fix it, and that'll take some time. Those tweets don't write themselves, you know. And that pesky congress & various uppity lawyers getting in his way ain't helping either.

      Unfair to compare the two when Trump started at a real disadvantage.

      (I must admit I 'WTF' when I heard Obama was getting a Nobel. Apparently so did he.)

      • RockyRaccoon on 11/08/2017 - 19:22

        Obama sorted out world peace on his first day!

        WTF, if he did that then there would be no war now.

        He did this

        He used this opportunity on his first day in office to communicate his commitment to active engagement in pursuit of Arab-Israeli peace from the beginning of his term, and to express his hope for their continued cooperation and leadership.

        Pursuit and achieving are two different things. If he had achieved this, then why is there still conflict in Israel between the jews and the Arabs?

        • D C on 11/08/2017 - 22:10
          +1

          It's a joke, son. Why so serious?

        • RockyRaccoon on 11/08/2017 - 22:15

          @D C: Thanks for pointing this out, its hard as, sometimes some here seriously believe a politician can actually "save" the world from all that is "evil"

          Nice to know you re not one of them. So I'll take a cold shower, relax and enjoy an evil glass of wine….

  • Cheap Steve on 08/08/2017 - 10:49
    +4

    "Soon as interest rates rises, which they will"

    What makes you so confident that interest rates are going up?

    Looking out my window I see no wages growth, no inflation, weak economic growth and very few businesses significantly growing their earnings.

  • owli on 08/08/2017 - 10:54

    Soon as interest rates rises, which they will

    Will they? When? Maybe we go negative like Japan and EU/CH first.

    Donald Trump, need I say more.

    You really think Donald Trump will trigger it?
    The US has had 10 years of economic stimulus with near 0% interest rates: cheap money.
    If they start hiking the market could correct or fall = Trumps fault.
    Or they can keep rates low and continue to play the game and have it correct or fall later on = Trumps fault.

    I think he will get blamed for something that has been winding up for much longer than his presidency.

    • TheBilly on 08/08/2017 - 11:02
      +2

      Rates are controlled set by the reserves not the government at the time.

      Fiscal Policy - Government Spending (AKA Government Budget)

      Monetary Policy - Cash rates (Federal Reserves)

      Agree with the blame, it's not his fault. He's just a convenient guy at the time to hang out to dry. He also won't care either as he's rich.

      • owli on 08/08/2017 - 11:08

        Yes, thanks for clarifying. I don't think Yellen will be too aggressive as her time is up soon, but someone new will be appointed next year and we will find out then which way we go. But no one will blame that person or the FED it will be the knee-jerk reaction to blame Trump.

        • TheBilly on 08/08/2017 - 11:17
          +3

          Of course because people don't actually understand and the media doesn't exactly like to educate on how things really work either. I don't like trump, but I'm smart enough to know he's just another guy. IN all honest, if he was just some "poor" guy that got the job by chance, I'd feel sorry for him, but he's so rich that even if SHTF and he's impeached and everyone blames him and he's the most hated guy in the world, he will still be laughing all the way to the bank while half the population will be scrounging for benefits … So my sympathy is irrelevant/pointless LOL

        • Euphemistic on 08/08/2017 - 13:43
          +1

          @TheBilly: And there is the reason he is no good for the US. He doesn't care about the people that keep the place afloat, only his rich buddies. As much as he is like all the others he spurts out nonsense that just ends up stirring up hornets nests. Taking benefits away from the poor, alienating other countries, races, religions which creates a more volatile society.

        • TheBilly on 08/08/2017 - 15:54

          @Euphemistic: Can't disagree with that !! Definitely not a trump supporter in the slightest.

  • mick123 on 08/08/2017 - 11:20
    +2
    1. Yes overvalued/inflated and high debt but at the same time, rates currently low (and SOME say will be for 1-2 yrs), majority are ahead on repayments (okay short-mid term, long term hard to say), 200k immigrants being bought in every year (which is way too much and just a govt measure to keep GDP up, but often results in lower living standards).
      RBA won't look to raise rates right soon as - unemployment steady, no wages growth,AUD high

    But say they do raise rates and wages/jobs don't grow and we suffer economically, then don't forget - will lead to job losses, higher borrower rates and tighter lending, so it does not necessarily mean that people can go out there and buy houses at a quarter of today's value (which won't happen), even if you are cashed up.

    The cycle our govt's have helped us get in, is messed up.. Short term stagnation would be the outcome to wish for.

    The best thing the govt can do for housing affordability in Syd/Mel is reduce our immigration (not stop it, reduce it).

    And to those who, as quoted above, "hope it crashes and burns", let's hope you never have to lose a house or job or even a family member if they get into a very tough situation. You probably have parents who would suffer from a crash.
    Don't wish ill upon others.

    1. Who knows, all depends on Kimg Jung Un. Trump won't shoot first.
      TheBilly - thank you, that was a great post..very informative.

    2. He won't get impeached. Don't believe everything you see/read from MSM. They (MSM) hate him and clearly have an agenda as most MSM have a globalist view, which sounds nice but is deeply impractical. He does give them quite a bit of material though lol. Form your own judgement from your own research. TheBilly spot on again.

    • dcep on 08/08/2017 - 13:09
      +1

      "so it does not necessarily mean that people can go out there and buy houses at a quarter of today's value (which won't happen), even if you are cashed up."

      But 10 yrs ago, Ireland dropped 70% (not all suburbs) when the dust settled.

      How tight the lending is going to be during tough times ?
      50% LVR ?

  • poboy on 08/08/2017 - 12:04
    +1

    A catastrophic world event will cause us much harm, due to the interconnectedness of the World.

    California's fault line could rumble, killing thousands and destroying cities. The insurance shock of this would crumble financial markets.

    • [Deactivated] on 08/08/2017 - 13:43

      Unless you're talking about an Armageddon (in which case the stock market is the least of your worries) … Natural disasters are generally good for the economy - encourage lots of construction, government investment, etc. Not so great for insurance companies.

  • Carpe Diem on 08/08/2017 - 13:07
    +3

    Interest rates will rise but nothing of material importance in the short/medium term & possible long term. As others have already highlighted, we just do not have the supporting economic data for such rises.

    We hear about N.Korea every week but I believe the the threat of war here is overstated. The only area of actual military conflict that is of a mild concern to me would be the South China Sea. Tensions will continue to intensify in this region but again do not see this in the short term.

    Personally, I see the biggest threat of another GFC, which will be even harder hitting is China. Asset bubbles aplenty, leverage galore & poor regulation.

    "200k immigrants being bought in every year (which is way too much and just a govt measure to keep GDP up"

    Most countries use this practise to maintain GDP growth. However, I think your assumption of it being way too much is highly debatable…

    I believe the actual figure is 190k migrants (two thirds of those were skilled). However there is a big difference between granting a visa & actually arriving e.g. in 2015–16, 190k permanent visas were granted but 91k went to people already in Australia! So you’re double counting if you’re incoporating them in figures we ‘take’ in…

  • RockyRaccoon on 08/08/2017 - 16:42
    +4

    More likely

    1. A rash of posts of bargains, on Ozbargain - leading to loss of profits and businesses going broke, staff layoffs and a 16 year recession
  • [Deactivated] on 09/08/2017 - 08:46
    -1

    The cause will definitely be capitalists doing something shitty

  • Peck on 09/08/2017 - 09:44

    RECESSION

  • jhmtaylor on 09/08/2017 - 10:04
    +3

    In relation to the housing market, I think it will be a withering decline rather than crash. Events to trigger this would be rising bad debts, rising unemployment or lender solvency.

    In relation to the stock market, we are 9 years into a bull run, but previous stock market crashes were all preceded by a boom and that has not happened up to now.Stock market valuations are high, which I attribute to record low interest rates plus our huge superannuation savings we now have, that must find an investment home somewhere.

    A black swan event like North Korea or a trade war could cause a crash.

    You can also lose money by not being invested in the market.

    I can't see Trump having any effect. There are too many checks and balances in the US political system for anything really stupid to occur. The worst case scenario is him becoming a lame duck, which I think he is working very hard at becoming.

    • jhmtaylor on 01/01/2019 - 18:34

      I withdraw my comments about Trump. Markets rise on confidence and fall on uncertainty. He is a lame duck but is causing a lot of harm along the way. (The one great thing about investing is that you are always learning).

      I do not think anyone can predict a stock market crash with any degree of certainty, but we can prepare for it by holding more cash and investing in stocks that do well in times of uncertainty.

  • balotelli14 on 09/08/2017 - 19:20

    Cheers for the responses, love the knowledge.

  • [Deactivated] on 10/08/2017 - 13:43
    +3

    Shame about the grammar, but it's all in the 'passed' now, and anyone who cares about grammar is a 'looser' I guess.

  • joungs on 01/01/2019 - 05:18

    Honestly I think the chinese are in for a hard lesson with their housing market. Nearly everyone is investing in property and so many of these dwellings are uninhabited, it's a recipe for disaster. I also think it will hit Australia harder than the GFC as we are more reliant on China to buy our exports than the US

  • [Deactivated] on 03/01/2019 - 23:00

    I think what is happening since Oct 2017, and from late 2018 IS a correction of the multi swing across major Stock indexes and FX ratios, due to the post-GFC flooding of fake money in europe, UK and US.

    So if I'm right, over the next few years you will see, as importanrt examples, the Aud/Usd head back below 0.5, Aud/Gbp to 0.4ish, possibly Gold and Oil to pre 2007 values.

    Stockmarkets - As examples, the spread between Asx and Ftse will return from avg 1500 above to even or below, Asx and Dax from Double for the past 7 or so years, and 5000 above right now, to an average of numerically Dax and Asx being on par or Dax falling below at times, as pre-GFC.

    Us Stockmarkets are not falling nearly as far as Ftse and Dax, and Asx in the misrange by % loss in the past 15 months, and likely will continue fow a couple more years.

    Interest rates will rebound along with this adjustment, so it's impact at 16 - 20% may be seen again in the next decade.

    This stuff, is in my experience globally controlled by banksters etc, so we'll see if I'm close to right in five or so years.

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