Market Sell Off

[dan_s]

Comments below are from Porter Stansberry on 2-9-2018

Back in August 1998, the market simply fell out of bed for no good reason. Sure, Russia defaulted on some debt. But that only mattered to folks like billionaire investor George Soros. It shouldn't have mattered at all to U.S. investors.

Still, the market crashed, dropping more than 500 points in one day. That was a record point fall at the time. Investors who had enjoyed nearly a decade of easy 20%-plus annual gains in stocks were in shock. But it wasn't the big one. There was a long way yet to go in that cycle's "Melt Up."

It seems highly likely that the kind of financial problems we're suffering today will end up being a lot like the muck-up at Long Term Capital. Everyone was selling because they knew Long Term Capital had to sell to cover its Russian losses. And what nobody understood was that Long Term Capital was leveraged 100-to-1... and owned $1 trillion in assets. That amount of selling triggered wave after wave of additional selling, and so on.

But the selling wasn't based on any fundamental problems in the economy. As soon as everyone understood what was driving the selling, the panic stopped. The bull market resumed. I bet that's what happens again this time around.