Where do I start? It appears that with the jump in Gold prices that in some ways the stock market crash has already started. There are strange rumors in the Gold market which indicate that this may just be the tip of the iceburg.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001VOO

Look at the following graphs:

http://www.cairns.net.au/~sharefin/Charts/Dowaust.gif

http://www.cairns.net.au/~sharefin/Charts/Dowaumt.gif

From:

http://business.fortunecity.com/wrigley/585/Markets/GoldDow.htm

Note that if you look at the Dow/Gold curve that the market took a real big hit last week. If we are really going to see the distruction of the fractional reserve system as Scary Gary is often preaching, the crash may have infact started last week.

Infact the long term gragh:

http://www.cairns.net.au/~sharefin/Charts/Dowault.gif

is very much like the '29 curve preponded by Ure:

http://www.urbansurvival.com/week.h1.jpg

at:

http://www.urbansurvival.com/week.htm

With Y2K less than 3 months away, it is a frightening thought to think of the wealth that so many people feel that they have "saved" in their mutual fund accounts is really at risk this weekend. Their "preparations" for the future (ie: stocks and fiat$) may not even be there when we reach the roll over. If Y2K is an 8 or 9, we may very well have the anarchy that many of us worry about as our worst nightmare.

Keep your eye on the ball....

Things will get worse before they get better.

-- Helium (Heliumavid@yahoo.com), October 02, 1999

Answers

Here is my feable attempt at HTML posting of the Dow/Gold graphs. I appologize in advance if I mess it up!

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Short term daily

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Medium term weekly

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Long term monthly

 

-- Helium (Heliumavid@yahoo.com), October 02, 1999.

Notice that even in the monthly Dow/Gold that the drop is already greater than 25%. This does not portend well.

-- Helium (Heliumavid@yahoo.com), October 02, 1999.

Helium:

Thanks very much for the excellent links and graphs.

Roger

-- Dr. Roger Altman (rogaltman@aol.com), October 02, 1999.

Helium,

Among the problems with such comparisons is that similar comparisons can be made between any two entities that can be quantified in terms of any third entity. Depending on one's choices of the three entities, one could come up with almost any x/y chart one can imagine. For just one example, if one kept the DOW and the US dollar, and used crude oil in place of gold, you could make the DOW look even worse, and it's recent fall would have started sooner.

Jerry

-- Jerry B (skeptic76@erols.com), October 02, 1999.

Jerry;

Good point, I think what is interesting to note is that no matter how you slice it, things are not looking real good for the US equity markets for the rest of this year.

-- Helium (Heliumavid@yahoo.com), October 02, 1999.

http://www.boston.com:80/dailyglobe2/273/business/Stock_fund_sales_dow n_for_2d_month_in_September+.shtml

Stock fund sales down for 2d month in September

By Bloomberg News, 09/30/99

EW YORK - US stock mutual-fund sales slumped for a second month in September as investors pulled money out of declining equity markets.

Investors last week yanked $7.5 billion out of funds that invest in US and international stocks, cutting their inflows to about $6.5 billion in the first four weeks of September, said Trimtabs.com Investment Research in Santa Rosa, Calif.

That followed a drop in inflows during August to $9.21 billion from $12.40 billion in July, reported Washington, D.C.-based Investment Company Institute. The decline prompted some analysts to forecast few gains ahead for US stocks.

''We're bearish because there's going to be more money going out of the market than going into it,'' said Carl Wittnebert, director of research at Trimtabs. Net sales for the year through August fell 38 percent from last year to $118.7 billion, FRC said.

The Standard & Poor's 500 Index is down 3.9 percent this month, putting it on track for its first three-month losing streak since Iraq invaded Kuwait in 1990. It's up 3.2 percent this year, lagging annual gains of no less than 20 percent the previous four years.

Skittish investors have been moving money into short-term fixed-income funds, a shift that made August's best-selling US fund the Vanguard Short-Term Corporate Bond fund. The Pimco Low Duration fund was No. 3, after Vanguard's 500 Index fund, according to Boston-based Financial Research Corp.

It was the first time a bond fund was the industry's top seller since August 1998.

Last month, Vanguard's short-term corporate bond fund gained $665 million in new assets to $7 billion, while Pimco's low-duration fund attracted $653.8 million to $4.5 billion, FRC said.

As for September, Charles Schwab Corp., the biggest distributor of mutual funds, said $419 million flowed out of its equity fund network through Tuesday. Of that, $252 million went into international stock funds while $671 million flowed out of US funds. That followed an August outflow of $140 million.

Schwab also sold a net $8 million of fixed-income funds, reversing August's outflow of $103 million.

Fidelity Investments, the world's biggest mutual fund company, said total net sales this month through Monday totaled $2 billion. Sales this year have risen 35 percent to $32 billion.

Through Sept. 27, net sales of stock funds at Fidelity were the slowest since December, sliding to $500 million from $1 billion in August. The top-selling funds were the Aggressive Growth fund and Growth Companies fund.

Fidelity's fixed-income funds had net outflows of $200 million, while money-market funds gained $1.6 billion.

This story ran on page D02 of the Boston Globe on 09/30/99. ) Copyright 1999 Globe Newspaper Company.

-- Helium (Heliumavid@yahoo.com), October 02, 1999.

Helium:

Your detracters can bicker all they want until the bovines return to their barns, but that does not nullify the fact that the equity markets are changing abruptly.

Almost all of the stock market crash scenarios, those based on previous historical crashes and those based on current absurdly high p/e ratios and other factors, scream that there must be a major change in the value of assets.

The published charts point to a MAJOR CRASH in mid October.

The Wall Street insiders will make their move WTSHTF, and the *average* American investor will get nailed with worthless mutual fund certificates and other unredeemable accounts.

Don't forget that foreign nations have their own financial schemes which are self-protective. When they pull out, watch out for the scary free fall!

There is no simple solution. When Greenspan is forced to increase interest rates, then TSHTF.

-- Randolph (dinosaur@williams-net.com), October 02, 1999.

Helium! You da man! Graph on, dude! (Thanks)

Actually, the number one risk that is built in to a high market as today's, with a P/E of ~30 and a yield of 1.2% is that (like Wile E. Coyote over the cliff), "investors" have built their expectations on OTHER investors coming in after them to validate their purchases.

The last 3000 or 4000 Dow points have been based more and more on this DERIVATIVE expectation. Derivative upon derivative is built into the market math now. It is self-deflating once reversed.

If everyone is waiting to see what everyone else will do, then once the perception of upward momentum shifts to even a neutral expectation, players exit and produce a snowballing downward movement/expectation.

Game theory: Prisoners' Dilemma. The early "defectors" from "cooperation" pay a small price, but save the larger future cost if they had stayed on board. Asking us to "cooperate" in a toppy market "for the good of all" is contrary to economic markets, which are based on rewarding SELF for effort and investment.

Risk/reward, however you measure, more skewed than ever.

Psychology rules over fundamentals, and today is history's #1 example. It will be so clear to all -- after it happens!

Only question is how to play it. And the usual games (shorting, options, futures) are loaded with default risk at crucial points. Win the bet: Direction right; timing right -- now just try to collect.

In the most complex situation, with many new variables thrown in, and shifting daily, today's markets won't be sorted out until the histories are written a decade from now.

Whatever is simplest, and gives you peace of mind, should have a priority in your life now.

-- jor-el (jor-el@krypton.uni), October 02, 1999.

jor-el: If I were you, I'd be thinking about getting off Krypton. I have good reason to think the planet is going to be destroyed. If you can't get off, then how about sticking your infant son in a rocket and shooting him toward earth. I think we're gonna need him pretty soon.

-- cody (cody@y2ksurvive.com), October 02, 1999.

Anybody think we're going to see Black Monday or Black Tuesday this week? I think Greenspan is going to have to raise interest rates again. If he doesn't the crash is going to be a lot more severe a few months down the road.

-- @ (@@@.@), October 02, 1999.

@, I rather suspect that if Greenspan had a choice between a "bad" crash next week, or a "severe" crash in a few months, he would definitely choose the latter. Especially if those few months end up being in 2000, where anything goes.

90 days.

-- Jack (jsprat@eld.~net), October 02, 1999.

Can anyone give me some simple advice? I have about $1200 to invest in either gold put options or perhaps e-mini put options. This is money I can afford to lose, but of course would rather not. it is my y2k insurance. Any suggestions on which of these might prove better?

-- bob grove (mediatrix@mediatrixtours.com), October 02, 1999.

invest in rice,beans,and spam.

-- zoobie (zoobiezoob@yahoo.com), October 03, 1999.

bob g.

in the land of uncertainty cash is king.

-- corrine l (corrine@iwaynet.net), October 03, 1999.