{"id":334,"date":"2014-10-20T21:43:57","date_gmt":"2014-10-20T21:43:57","guid":{"rendered":"http:\/\/olduvai.ca\/?p=334"},"modified":"2014-10-20T21:43:57","modified_gmt":"2014-10-20T21:43:57","slug":"the-crash-has-already-begun-the-burning-platform","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=334","title":{"rendered":"THE CRASH HAS ALREADY BEGUN \u00ab The Burning Platform"},"content":{"rendered":"

THE CRASH HAS ALREADY BEGUN \u00ab The Burning Platform<\/a>.<\/p>\n

The bulls declared victory on Friday with a large bounce back. But, the chart below from John Hussman will provide you with some perspective. Bull markets are boring and methodical. Volatility is low and the gains are slow and steady. Volatility spikes dramatically during bear markets. It works in both directions. Large down moves are followed by large up moves, but the overall direction is down. We\u2019ve entered a world of pain. The up days will keep people believing, while they get their hearts ripped out and their net worth gets gutted again. Market internals have turned negative, as Dr. Hussman notes:<\/strong><\/p>\n

Abrupt market losses typically reflect compressed risk premiums that are then joined by a shift toward increased risk aversion by investors. In market cycles across history, we find that the distinction between an overvalued market that continues to become more overvalued, and an overvalued market is vulnerable to a crash, often comes down to a subtle but measurable shift in the preference or aversion of investors toward risk \u2013 a shift that we infer from the quality of market action across a wide range of internals.<\/em><\/p>\n

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Once market internals begin breaking down in the face of prior overvalued, overbought, overbullish conditions, abrupt and severe market losses have often followed in short order. That\u2019s the narrative of the overvalued 1929, 1973, and 1987 market peaks and the plunges that followed; it\u2019s a dynamic that we warned about in real-time in 2000 and 2007; and it\u2019s one that has emerged in recent weeks (see\u00a0Ingredients of A Market Crash<\/a>).<\/em><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

THE CRASH HAS ALREADY BEGUN \u00ab The Burning Platform. The bulls declared victory on Friday with a large bounce back. But, the chart below from John Hussman will provide you with some perspective. Bull markets are boring and methodical. Volatility is low and the gains are slow and steady. Volatility spikes dramatically during bear markets. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[150,238,500,501],"class_list":["post-334","post","type-post","status-publish","format-standard","hentry","category-economics","tag-collapse","tag-economic-crash","tag-market-collapse","tag-market-crash"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=334"}],"version-history":[{"count":0,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/334\/revisions"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}