Stock Market crash-not if but when?

Thrugelmir

Aretnap wrote: »

The two situations aren't really comparable.

Greece is a basket case which is (or was) about to default on a large number of bonds, potentially making a number or Europe's banks immediately insolvent. That's the sort of thing that could have caused a big worldwide shock. The risk is (allegedly) better contained these days, so a Greek default and Euro-exit might now not have as big an effect on the markets as you might think.

The issue isn't Greece itself in isolation. More the precedent it sets. Any weak EU member in financial trouble. Simply defaults and walks out of the Zone. Not how the EU is intended to work. Nor particularly confidence boosting to investors and lenders alike.

Linton

tejero23f wrote: »

"Sell in May and go away; don't come back till St Leger day (14th September)

There could be even a bigger reason this time to heed the old adage,
The General election could see international investors sell UK assets, and an interest rate rise in America (after the fed meets in June) could trigger a market slide. This could prove a long hot summer for stock Markets-

You won't hear this from fund managers though keen to receive commission.

When the successful investor Nathan Mayer Rothschild was asked how he got to be so rich, he said:

"I always sold too soon".

The market doesnt react to events that are known well in advance to be quite likely. Why should institutional investors sell UK assets after an election? If they were worried about the result they would sell well beforehand. If UKIP unexpectedly win a majority I suppose the markets might be upset but assuming that Conservatives or Labour win the effect should be minimal.

Similarly interest rate rises have been known to be inevitable at some time for many years. No-one's going to be that surprised when it actually happens.

Of course there will be a crash some time. There will also be a boom. Sadly we dont know which will happen first.

Glen_Clark

Aretnap wrote: »

Labour-led coalition with higher taxes and borroowing

If you look at the National Debt, which has about doubled under this Government, you see the notion the Tories borrow less is just a myth promoted by the right wing press.
Osborne has borrowed hugely for his housing market interventions, which have served only to pump up housing costs and Housing Benefit costs.
This is hidden by counting rent increases as 'Growth' instead of inflation !

Glen_Clark

Aretnap wrote: »

Under a Labour government Britain might see somewhat lower growth,

Especially when we count rent increases as 'growth'...

mike88

Glen_Clark wrote: »

If you look at the National Debt, which has about doubled under this Government, you see the notion the Tories borrow less is just a myth promoted by the right wing press.
Osborne has borrowed hugely for his housing market interventions, which have served only to pump up housing costs and Housing Benefit costs.
This is hidden by counting rent increases as 'Growth' instead of inflation !

When there is a deficit net debt is bound to increase. After the next 5 years net debt will be even greater. It is only when the deficit is eliminated will overall debt cease to increase.

The current Tory claim which is correct is that the net deficit has been nearly halved as a proportion of GDP and has nothing to do with net debt.

Gadfium

So, in essence, there will be a crash but we don't know when. It might be in the next day, week, month, year or decade.

If the Tories win the election then there *might* be a crash, unless Labour get in then there also *might* be a crash. Or then again, there might not be (unless of course there is one).

Well, I'm glad that has been cleared up. I'm now off to sort out where Shergar is and find Lord Lucan. :think:

bowlhead99

Glen_Clark wrote: »

This is hidden by counting rent increases as 'Growth' instead of inflation !

Glen_Clark wrote: »

Especially when we count rent increases as 'growth'...

This seems to be your new personal hot topic as you mentioned it a couple of times on the Tesco thread and on others in the last few days, and now twice in two posts above with no response in between.

Stats are reported how they are reported. If someone is earning larger rental incomes than they were previously, that is a form of growth. It certainly puts more pounds in the pockets of landlords. If you invest in property businesses you can participate in it.

Sure, it costs somebody something. That's why everyone can calculate their own personal rate of inflation. Different government measures of inflation include or exclude types of housing cost - a simple index of consumer prices will bring in an element of rent but not so much owner-occupied housing, while RPI and CPIH are things that consider rather than ignore that sort of stuff.

Biggles

Couldn't all the 'stock market crash soon' threads be rolled into one? They're all saying the same thing (and have done for more than a decade).

Glen_Clark

bowlhead99 wrote: »

If someone is earning larger rental incomes than they were previously, that is a form of growth. .

Not when the rent of the same property increases by 10%. Thats not growth, its inflation. But its being reported as 'growth' and presented as evidence of 'recovery'
This is why I believe there are more reliable indications of the real state of the economy than the Government's statistics.

Glen_Clark

Biggles wrote: »

Couldn't all the 'stock market crash soon' threads be rolled into one? They're all saying the same thing (and have done for more than a decade).

Well that reminds me of the story of the drunk at the bar. You say if he has another drink he will fall down. But he has another drink and he doesn't fall down. Then he has another and another, people start to ridicule you and believe he can go on drinking forever. But eventually...inevitably.. the man falls down..