T Nation

The Stock Market is Racist


The stock market is poised today to do something it has not done in over 33 years: Decline for nine straight sessions.

The last time the Dow Jones Industrial Average did that, in fact, was Feb. 22, 1978, when Jimmy Carter was president. Does a streak of nine losing sessions in a row increase the odds that the market will rise on the 10th? Unfortunately not. In more than a few of the past cases in which the market dropped that many days in a row, the market continued dropping for at least another day.

In fact, the all-time record for number of days in a row in which the Dow fell appears to be 14 - a streak that ended on Aug. 13, 1941 as the rumblings of World War II were reverberating through Wall Street.



The Dow Jones Industrial Average plummeted 512.76 points, or 4.31 percent, to close at 11,383.68

The S&P 500 sank 60.27 points, or 4.78 percent, to end at 1,200.07.

The Nasdaq plunged 136.68 points, or 5.08 percent, to finish at 2556.39.

The unemployment rate is expected to hold steady at 9.2 percent.

Adding to day's woes, JPMorgan cut its third-quarter U.S. economic growth forecast by 1 percent, pointing to recent developments in the U.S. economy.


Peter Schiff, the CEO of Euro Pacific Capital, isn't one of those guests Nesto and I have to badger for opinions. Ask him a question and the long-time bear will tell you exactly what he thinks with vigor, even when he has an aching throat. Schiff thinks the U.S. is headed not just for a recession but rather a full-blown depression. On the upside, he believes the coming economic situation will look familiar.

"The Depression [in the wake of the financial crisis] was temporarily interrupted by a bunch of stimulus which ultimately weakened the economy further," says Schiff. He adds the government's likely knee-jerk response of stimulating is, "probably going to be the fatal dose, the lethal dose" prior to "a complete economic collapse."

Which is precisely why Schiff wasn't among those expecting a debt deal relief rally last Monday morning. The attention paid to the deal was a "massive victory for propaganda that would have done Goebbels proud." Schiff believes the real crisis wasn't the debt ceiling but spending and debt, both of which were effectively worsened by the deal.

"The reckless thing to do was to raise the debt ceiling" he says. Exacerbating matters Schiff thinks the ceiling is going to have to be raised yet again before President Obama leaves office. Not that the chance for DC to spend more freely will help the economy. "The reason we can't grow the economy is because the government is in the way. . . There's no jobs because there's no recovery."

By way of a cheery goodbye Schiff concludes, "We're on a collision course for disaster. All we can do, all your viewers can do is brace for impact. . . Buy gold. Buy silver . . . Get as far away as you can from U.S. currency and the U.S. economy."



I think we can all admire Obama for keeping his word. He said he was going to bring change and he did!


LOL!!!! Truer words haven't been typed.


Well, at least unemployment isn't going up.
That picture is great.


I really am kinda speechless, I mean. At some point you have to leave ideology behind and do the right damn thing. I didn't think Obama was beatable, now I don't see how he can win. It is a lot more fun to argue about whose ideology is right when you have money. When you're broke, it just sucks.


What is this "economic collapse" supposed to look like, the end of western civilization? What am I supposed to do with gold when there will be no food to eat? Chuck it at a squirrel and hope I end up with dinner?


Oh, not the end. Yet.

Right now Obamavilles of empty, foreclosed, suburban sprawl are popping up all over. Where the people go (or if they simply squat), I don't know.



Heh, clever.


Banks in Europe are collapsing. All the money fleeing Europe is going into our T-bonds. Short term T went negative today.

This is actually the Great Depression of the 21st century, really beginning to roll now.


Zeb! Are you a believer now? The Great Depression finally made a believer of you?


I was wondering the same thing.

Time to resurrect my market predictions thread?

I was early to the party, but I think the outcome remains the same.


Wondering how long it was going to take for someone to start a thread after todays plunge...

Really is interesting, I just couldn't believe it when I woke up.

What do you guys take from the gold/silver sell off?

I love how practically all the commentators where saying there was going to be a bounce off the debt dealing going through.... could they possibly have been any more wrong ??


It's a combination of people needing cash for margin calls and the relative strength of the US dollar as the eurozone does "qualitative easing" (that is, they are printing money as fast as they can).



Do you believe that Obama had any major role in causing this rout? Please explain your reasoning.


  1. ObamaCare is a job killer
  2. The tons of new regulations are job killers, from fake ADA crap to easy fake discrimination claims. Hiring people is far too dangerous, because you can't get rid of losers --- they'll sue.
  3. Obama's tax and regulatory positions are firmly anti-business.
  4. Obama's EPA is killing domestic oil and manufacturing industry
  5. Obama has done a pocket-veto on drilling permits, so he has effectively frozen drilling in the Gulf of Mexico
  6. Obama's regulations have killed manufacturing in the USA
  7. The absurd wasteful spending is squeezing out business and is effectively a tax. See article posted three above
  8. His pro-union positions have caused business to flee to friendier countries
  9. The high corporate tax rate has killed investment in the USA -- why invest here, where it is cheaper elsewhere

That's just off the top of my head.