The news media normally latches onto names matched with an event. If this current market declines, I wonder…what will we call it, and what will we remember? Let's look at some historical names for important market cycle movements and how the media identified them.
Some names that come to mind are The Dot Com Bubble, The Mortgage Crisis, The Great Crash of 1929, The 1987 Derivative Crash, The Flash Crash and a few other minor quakes in the last 100 years have tested the financial system and put capitalism on watch as Wall Street found another way to derail the economic system.
I often wonder what kind of decline we are in for and what history is telling us about this market top. One thing I can tell you is they always make highs into the full moon cycle, and this one will be the same. If my calculations are correct, the high for the upcoming correction is in for the 2015 pullback. It started late Sunday night when every hedge fund guy I knew changed his 4th of July plans.
So let's make the assumption the high is in: What will we call it? We won't call it the Grexit Crash, because if this is a sustained pullback, others in the Euro will follow and it will be a total unwinding of the Euro and back to individual currencies. We will call it the breakup of the Euro instead of focusing on the other Greek shoe dropping.
A Quarter Decline in the Market Will Mean a Media Sensation
Whatever we name it, the naming will happen after the market has a 25% decline, and whatever the media cycle is focusing on at the time will begin the "news cycle" branding. It will certainly revolve around the unwinding of the European Union as a single currency, but I don't think this is enough to cause a global collapse in stock prices.
Each time we have a crash, there has been a cultural event attached to it, so here are some names I thought of: The Hillary Clinton for President Top, The Unwinding of the European Currency crash, The Marriage Equality Crash, The Caitlyn Jenner Move or The Social Media Stock Shakedown.
The Dot Com Bubble was about Internet stocks and the consumer’s desire to participate in the gold rush. I could describe the 2008 crash as the same thing, when real estate prices exploded, and most every one of you was making money by flipping houses. Back in The Roaring 20's, prior to The 1929 crash, F. Scott Fitzgerald was talking about the irrational exuberance and the cultural change occurring – the hard scrabble effect that’s created when you have a stock market crash, a lack of liquidity and many people losing their jobs while the regulatory bodies get more power.
The 2015 stock market is made up of professional traders trading high-priced stocks with the smallest public participation in any rally in history – so the unwinding of this extension will be tempered by the deeper pockets of the holders. It will not be like 2008, or 1987, it will have a name of its own, depending on how the next few weeks sort out. Personally, I hope they call it The Caitlyn Jenner Top - marking a day when our culture was making changes that are more significant than the change in stock prices.
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