Analyst Warns Of "Lehman-like" Disaster Could Happen Soon

[Farnhamia]

Ah sh*t, here we go again...

Nomura analyst Masanari Takada earlier this month warned of a “Lehman-like” plunge in the stock market. On Monday, he gave some urgency to that warning.

Bearish sentiment currently correlates well with sentiment before the collapse of investment bank Lehman Brothers in 2008, Takada argues. So investors should prepare for carnage in the stock market due to “panic-selling by fundamentals-oriented investors and systematic selling by trend-following technical investors.”

Takada told investors in a Monday note on that stock market sentiment hasn’t improved from when he first issued his bearish macro take, which CNBC cites as the most pessimistic on Wall Street.

“The correlation between sentiment then and now remains quite high,” Takada said, referring to the Lehman collapse. “Even the passing risk-on phase after the initial shock of the yield curve inversion (this month)... and the risk-off mood that struck on 23 August neatly track the pattern recorded in 2008.”

Also of note, the week before the U.S. Labor Day holiday weekend tends to have low trading volume, which can lead to wider swings in the market.

“The continued liquidation of long positions in equities by trend-chasing investors could convince one global macro hedge fund after another that now is the time to start paring longs,” Takada wrote.

It seems the US stock market is crashing and burning, and we may or may not be entering another recession. And obviously, this is bad. Really bad. I think a recession is generally just around the corner, and if this continues, its gonna be chaos.

[Bear Stearns]

when i sober up i will have a lot to say on this and can hopefully shed some light on things for the uninitiated.

[Costa Fierro]

They've been saying this for a little while now, but yeah something is definitely coming and it's gonna be bad. I can't begin to think what will happen here in NZ with our 25+ year property bubble and massively indebted farms.

[Neko-koku]

when i sober up i will have a lot to say on this and can hopefully shed some light on things for the uninitiated.

Yes please.

[Kowani]

I’m going to start sounding the alarm, nonetheless.

[Farnhamia]

I’m going to start sounding the alarm, nonetheless.

I can see you riding through every Middlesex village and farm yelling "The Lehman-like disaster is coming! The Lehman-like disaster is coming!" until the police take you into custody.

[Neko-koku]

I think PRC-related stocks are going to crash soon.

[Kowani]

I’m going to start sounding the alarm, nonetheless.

I can see you riding through every Middlesex village and farm yelling "The Lehman-like disaster is coming! The Lehman-like disaster is coming!" until the police take you into custody.

…You kidding me? I’m buying advertising on the news.

[Shofercia]

when i sober up i will have a lot to say on this and can hopefully shed some light on things for the uninitiated.

Sober up already!

[True Refuge]

Australia will probably follow when the US drops. The housing market in our state capitals is massively overflated and has like 20% of all Australian money invested in it. When the bubble pops it’s not going to be good.

[An Alan Smithee Nation]

I've lived through four recessions now, they are never quite as bad as I thought they were going to be. The problem is that they seem to be happening at increasing frequency, and that they increase wealth inequality.

You kind of need to discount both the extreme doomsayers and the extreme boosters, it's all manipulation.

[Salandriagado]

when i sober up i will have a lot to say on this and can hopefully shed some light on things for the uninitiated.

But drunk stock market analysis is so much more fun!

[-Ocelot-]

I've lived through four recessions now, they are never quite as bad as I thought they were going to be. The problem is that they seem to be happening at increasing frequency, and that they increase wealth inequality.

That's not a problem, that's a feature. You are just not rich enough to understand.

[Ethel mermania]

2008 end of the day, was about misrated paper that when defaulting wound up eating the legally required cash reserves of the bank and insurance houses.

A crash is always possible, but the market fundamentals are completely different today than 2008.

[Esheaun Stroakuss]

yay

[Rojava Free State]

We're overdue for another recession and they say this one will be a really bad one, as in worse than the 2008 one

[Duhon]

if i actually gave a fuck about finance beyond needing money to sustain my current lifestyle of mouthbreathing and little else save taking blood pressure antianxiety and angina meds i may be able to comment on this at some length

as it is it's always better to be a bear
you don't lose if you don't risk it

[Erythrean Thebes]

There will always be another recession around the corner, as long as those who put money into the financial industry are angling to make as much money as possible rather than conceiving of some incremental profit scheme. The more vigorously that players in the securities and financial industries try for profit, the more shall our financial foundations be put to risk and, consequently, the greater will be the impact of those risks coming to naught.

Additionally on this point, consider that historically for over 100 years the stock market has always crashed or entered periods of recession after phases of growth and investment had built up the value of corporate stocks which failed on their endeavors and became bankrupt, erasing the potential value of the stocks. Therefore nothing can prevent recessions or depressions, unless limits entwined with profit margins are placed on the amount of money that can be risked on investing in corporate stock, or, more speculatively, some apocalyptic alliance of US-based corporations to do absolutely nothing to impugn one another's access to money or profit, effectively creating a war against the economy and resources of the rest of the world

[Imbalistan]

I’m going to start sounding the alarm, nonetheless.

I can see you riding through every Middlesex village and farm yelling "The Lehman-like disaster is coming! The Lehman-like disaster is coming!" until the police take you into custody.

Also, thank you for personally changing the title due to it having a typo.

But, yeah, whoever will be screaming to all the villages “The Lehman-like disaster is coming!” will be rising on a Segway.

[Dogmeat]

I love how "just panic" is presented as not a "recession"

Never mind that the term "recession" is used to avoid reminding people of the "depression."
And "depression" was used to avoid reminding people of the "Panic of 1907."

When investors panic, you get a recession. They're two terms for the same thing.

[The Emerald Legion]

I love how "just panic" is presented as not a "recession"

Never mind that the term "recession" is used to avoid reminding people of the "depression."
And "depression" was used to avoid reminding people of the "Panic of 1907."

When investors panic, you get a recession. They're two terms for the same thing.

So what you're saying is that we should lock investors in a box where they can't get news?

[Salandriagado]

2008 end of the day, was about misrated paper that when defaulting wound up eating the legally required cash reserves of the bank and insurance houses.

A crash is always possible, but the market fundamentals are completely different today than 2008.

The underlying mathematical problems still haven't been fixed: bad debts are still being put through layers of re-packaging, and the correlation matrices are still being simplified down to a single number, which is still just as shit an idea as it was last decade.

[Valrifell]

I love how "just panic" is presented as not a "recession"

Never mind that the term "recession" is used to avoid reminding people of the "depression."
And "depression" was used to avoid reminding people of the "Panic of 1907."

When investors panic, you get a recession. They're two terms for the same thing.

So what you're saying is that we should lock investors in a box where they can't get news?

An interesting idea. One that I don't think has any downsides.

[Thepeopl]

The recession will come. Especially with these doomsayers, because of self fulfilling prophesy.

I hope we have learned something from the previous ones. And wont help bankers. If anything, government should claim all their assets for misuse.

[Cannot think of a name]

I almost wish the sky would fucking fall already so I would stop having to hear about how the sky will fall any minute now. Recession has been 'just around the corner' since like mid-Obama. How big is this corner?