Christopher Ruddy said that An ‘Automatic’ Crash Was Predicted!
Remember the stock Market fall last week of almost 1000 points? It’s been reported to be the largest one-day stock market fall in all of U.S. history. Although it was a surprise for most of us, the Financial Intelligence Report (FIR) claims they predicted it and even expected it.
The Financial Intelligence Report has been warning us for months that an ‘automatic’ correction was expected because of two factors:
1) the high number of stop orders placed on auto-trade with brokers and
2) the automatic expiration of the Bush tax cuts at the end of this year.”
In addition, back in October 2009, the Financial Intelligence Report warned that many investors were nervous about their equity investments and had been placing automatic stop orders on their holdings.
Even though investors tried to be optimistic, the market crashed in 2008 and 2009. Many say that the dollar is ready to crash as well.
Media reports claim the fall was caused by events going on in Greece, and that a man-made “error” worsened the problem. Supposedly, a trader accidentally placed a broad-market sell order in the billions instead of millions. So far, the exchanges say no evidence of this has been found.
Let me quote from The Financial intelligence Report as follows:
The bigger problems are the state of the economy and President Barack Obama’s policies.
Once again, the press is blaming the stock market tumble on Greece and avoiding the “O” word.
How do they know Greece caused the tumble?
They don’t. I think the economy here in the United States and Obama’s policies are having a far greater effect on investors.
At Financial Intelligence Report, we have been warning of a major market correction all this year. We predicted that, one day, investors would wake up and realize that the Bush tax cuts are expiring en masse at the end of this year.
This means that without lifting a finger Obama will get a massive, almost across-the-board tax increase.
Those in the highest brackets — people who Obama sees as “rich” and who I see as critical for economic recovery — will see an automatic tax increase of about 10 percent.
It has been a long-held view that the stock market is a leading indicator of the economy by about six months.
In just over a half of a year, then, we foresee that the consumer economywill take a huge hit as the cash flow of high-income producers diminishes.
As the Bush income tax cuts expire, so do dividend and capital-gains cuts. Many investors will also realize it’s better to sell this year and pay less tax — another factor that will put downward pressure on the markets.
Obama thinks he will take from the rich to give to the poor by letting tax cuts expire, but he will most hurt the poor.
What Obama forgets is that those who make high incomes are not necessarily rich, at least as far as their balance sheets go.
Warren Buffett takes a very small income but is very rich, the richest man in America. Interestingly, his income will be little affected by the end of the Bush tax breaks.
I suggest the president and others read Dr. Thomas Stanley’s new book, “Stop Acting Rich.”
As Stanley explains, those who have high incomes, such as doctors and lawyers, are typically not wealthy.
Instead, he finds, they are hyper-consumers. They like to spend what they earn. Cars, watches, travel, restaurants, fashionable clothes, boats, you name it.
There is no question that such spenders drive the whole U.S. economy. Think of the thousands of workers who find employment due to such hyper-spending.
Financial Intelligence Report has warned that if the Bush tax cuts expire, it will reduce cash available to such spenders, who will further tighten spending.
Investors should begin tightening their seat belt as we careen toward a double-dip recession.
Important: I strongly encourage you get a free trial subscription to Financial Intelligence Report. You can get this also with a free copy of the bestselling new book “Aftershock.” The authors of this book predicted the last market crash and have been warning two major bubbles will burst soon. Dick Morris says every investor must get ‘Aftershock.’ Check out our free offer — Go Here Now.
