Stocks about to plunge 16% in next 3 months - Wells Fargo Warns

[Singlebyte]

Get ready for a chaotic market over the next few months.  With QE pumping and all the other fiscal mis-management going on this prediction is highly likely.  Questions is, will BTC get a big boost or slide downwards with the rest of the markets?

http://finance.yahoo.com/news/stocks-plunge-wells-fargo-warns-112421641.html

[Lethn]

Yep, sounds about right, we're getting people running around in the UK trying to claim we're in a recovery right now, I even heard David Cameron claiming it in a news item, I think the correct term for what we're in now is the infamous dead cat bounce.

[AndrewWilliams]

Wow, can't say I'm surprised.

[Rygon]

"Our target is based on fundamentals," Adams insisted. "We're basing our target on typical valuation measures, given the level of interest rates and also on earnings forecasts. And that's why our target is relatively low."

Um... perhaps they didn't get the memo that the market is no longer driven by fundamentals. The fed decides to taper, stocks go down. The fed decides to continue printing $85B/month, and stocks creep upwards. Worse yet, the fed might actually decide to increase pumping because the economy is even worse than what it was before. Investors are stuck between a rock and a hard place. You might as well flip a coin if you are forced to invest a certain portion of your income into stocks or bonds (such as in 401K accounts).

[Lethn]

No, the federal reserve doesn't dictate the markets, everyone just thinks they do.

[nildram]

I can pick and choose the news that I want to believe from any "reputable" news source any day.

This may or may not be right, but I'm wary of people who continue to believe they can make short term predictions.

Sure, long term, QE will prove to be a very bad thing, but why should we suddenly believe Wells Fargo?

[Operatr]

I think it will be far worse than 16%...

No, the federal reserve doesn't dictate the markets, everyone just thinks they do.

Actually the stock market is completely divorced from economic reality at this point. The FED elected not to taper (in part, plus the entire global economy would tank if they did which means the FED is backed into a corner it cannot escape now) because even whispers about a possible taper sent the markets into a hissy fit.

At some point a massive correction is going to hit the world like a freight train

[Lethn]

Yes there is a market correction waiting to happen but you're wrong in thinking that the market is lol 'divorced from reality' the market is simply reacting short term to all the money that's being pumped into the system, this is what happens all the time with inflation. You have extreme price rises and as most news organisations and this article have pointed out 'all time highs' and that is the money printing being pushed to the limit, eventually what will happen is everyone will realise what's going on and we'll have capital flight and wealth transfer going on.

Traders aren't all morons, a lot of the skilled ones will be riding the inflation and buying up whatever real commodities they can after they make profit and time it just before the collapse, this is also how central banks can take over entire countries and have repeatedly done in the past at discount prices.

[hashman]

OK so where do you think the newly mined USD are going to go then? 

[Johnny Bitcoinseed]

When the FED reports the economy continues to be bad and more money printing is necessary, the stock market goes up.

Now does that make sense?  The economy is declared bad and that makes stocks rise in value?  If they say the economy is improving then stock prices drop.  The exact opposite of what should happen.

When that FED money pump stops - heads up because the sky is going to fall.

So then where will people who have money turn in order to try and preserve at least a portion of their wealth?  My guess is gold, silver, artwork, jewels, and to some extent bitcoin.

[marcus_of_augustus]

When the FED reports the economy continues to be bad and more money printing is necessary, the stock market goes up.

Now does that make sense?  The economy is declared bad and that makes stocks rise in value?  If they say the economy is improving then stock prices drop.  The exact opposite of what should happen.

When that FED money pump stops - heads up because the sky is going to fall.

So then where will people who have money turn in order to try and preserve at least a portion of their wealth?  My guess is gold, silver, artwork, jewels, and to some extent bitcoin.

They will not stop printing now until the US dollar collapses completely. They cannot, they are now trapped As you say, when the even hint that they might stop printing the markets and economy will contract violently, so they can't stop. But the printing is not actually making things better, most likely worse by undermining real growth and necessary structural economic adjustments. History has many examples dating back over 200 years of central monetary authorities that get into exactly the same position ... each new move will now only be more and bigger money printing programs. Plan for it as it could take 5-10 years to play out to the bitter end.

[ScaryHash]

When the FED reports the economy continues to be bad and more money printing is necessary, the stock market goes up.

Now does that make sense?  The economy is declared bad and that makes stocks rise in value?  If they say the economy is improving then stock prices drop.  The exact opposite of what should happen.

When that FED money pump stops - heads up because the sky is going to fall.

So then where will people who have money turn in order to try and preserve at least a portion of their wealth?  My guess is gold, silver, artwork, jewels, and to some extent bitcoin.

They will not stop printing now until the US dollar collapses completely. They cannot, they are now trapped As you say, when the even hint that they might stop printing the markets and economy will contract violently, so they can't stop. But the printing is not actually making things better, most likely worse by undermining real growth and necessary structural economic adjustments. History has many examples dating back over 200 years of central monetary authorities that get into exactly the same position ... each new move will now only be more and bigger money printing programs. Plan for it as it could take 5-10 years to play out to the bitter end.

YOu are right. It's just SOOO much easier to print, and not actually tackle the real problems, and goose up your friends earnings, have dinners at Citronelle in DC with the $1000 bottles of wine, than to actually do some thinking and actual work.

That's what every banker wants, the easy money, where they can hang out on their yacht on the Chesapeake with the bought and paid for "ladies" and rake in the cash.

Hey, actually getting miners configured right and working is actually hard work. No bankster in their right mind would actually do it. This will end very very badly. Count on it.

[btctraderr]

When The Fed prints more money that money finds the path of least resistance, which in the case of the US is the stock market and other government subsidies like housing (why not buy a house with 0.something% interest rates). The stock market is not rising because of the fundamentals, if you debase your currency of course the value of stocks denominated in that currency will rise because the purchasing power you have invested in them has diminished.

I don't really care what Wells Fargo has to say but at least they're saying what they think. In the past the USSA gov has sued ratings agencies http://www.theguardian.com/business/2013/sep/04/standard-poors-us-retaliation-lawsuit because they dared excercise their right to rate a soverign state on what they percive as it's riskiness. Sorry, can't do that anymore, just get told what to say.