Goldman Sachs reports their Global Economic Indicators (GLI) show the world has re-entered a contraction and…is predicting a market crash worse than that of the early 90′s recession and one slightly less than the sell-off at the turn of the millennium. [Below are graphs to support their contentions.] Words: 250
So says Alexander Higgins in excerpts from his original article* at http://blog.alexanderhiggins.com.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This, and the preceding paragraph, must be included in any article re-posting to avoid copyright infringement.
Notably, [as can be seen in the graph below] the GLI turned negative ahead of the Internet bubble bursting at the turn of the millennium and far in advance of the Financial Meltdown of 2008.
The angle at which we entered this Contraction phase is worse than the angle preceding last year’s crash ahead of the Debt Ceiling crisis crash [see graph below] and almost on par with the angle at the bursting of the Internet bubble in 2000.
If there is any consolation, the angle is notable less than the recession’s of Bush senior and the Financial Crisis of 2008. However, Goldman’s research is predicting a market crash worse than that of the early 90′s recession and one slightly less than that of the turn of the millennium sell-off.
Take Note: If you like what this site has to offer go here to receive Your Daily Intelligence Report with links to the latest articles posted on munKNEE.com. It’s FREE! An easy “unsubscribe” feature is provided should you decide to cancel at any time.
The business cycle shifted into the Contraction phase of Goldman’s ‘Swirlogram’ framework [see below] in the past month…
which has negative implications for forward 12-month S&P 500 returns [as revealed in the graph below].
As Goldman notes: “We think that the macro data are providing a clear signal and, hence, we think a negative bias remains warranted”. Source: Goldman Sachs from Zero Hedge
*http://blog.alexanderhiggins.com/2012/06/07/goldman-sachs-leading-indicators-signal-steep-market-crash-142421/ (To access the above article please copy the URL and paste it into your browser.)
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
1. These 48 Stocks Performed Best in Previous 4 Market Corrections/Crashes – Should Any Be In Your Portfolio?
As investors become more and more worried about the world economy…it makes sense to us to look into stocks that held up best in periods of market decline. Managing risk is as important as reaching for return. One aspect of managing for risk is the past behavior of particular stocks in negative market periods. Toward that end, we identified four key, recent down periods for the S&P 500, and identified those liquid stocks that were in the top quartile for price return in each of those four periods, and did at least as well as the S&P 500 index in the 2008 crash period. [Take a look!] Words: 620
2. Marc Faber: We Could Have a Crash Like in 1987 This Fall! Here’s Why
Marc Faber has stated in an interview* on Bloomberg Television that “I think the market will have difficulties to move up strongly unless we have a massive QE3 (something Faber thinks would “definitely occur” if the S&P 500 dropped another 100 to 150 points. If it bounces back to 1,400, he said, the Fed will probably wait to see how the economy develops)….. If the market makes a new high, it will be with very few stocks pushing up and the majority of stocks having already rolled over….If it moves and makes a high above 1,422, the second half of the year could witness a crash, like in 1987.” Words: 708
3. Pento: Markets Will Fall Significantly This Summer – Here’s Why
Investors are being told that the worsening sovereign debt crisis in Europe will leave the U.S. economy unscathed….[because,] since we don’t make many things to export to Europe, our GDP won’t suffer a significant decline at all…. What [has been] conveniently overlooked, [however’] is the fact that 40% of S&P 500 earnings are derived from foreign economies and the seventeen countries that make up the Eurozone have collapsed into recession. [Let me explain what effect that will have on the performance of the S&P 500 this summer.] Words: 325
4. S&P 500 Should Continue Climbing Until October and Then Decline 15-30%! – Here’s Why
At the end of November 2011 the U.S. behavioral indicator for the U.S. stock market, based on insights on investor psychology, touched the crisis threshold for the fifth time (1971,1979, 1986, 2006) since 1970. If the current case follows the four prior cases, we expect a similar positive return from November 2011 to the end of October 2012 as in the four prior periods followed by a decline somewhere between 15% and 30%. [Let me explain.] Words: 317
5. Fractal Analysis Suggests Dow Could Drop to 6,000 in 2012 and Gold Take Off Like It In 1979