[Medieval Man]

Curious about some here who pay attention to the economy, and in fact have been prepping with a currency or economic collapse in mind:

What actions, if any, would you take if the NYSE was forced to use the same circuit breakers because of a stock market collapse, as is happening in China:

http://www.cnbc.com/2016/01/06/chin...orea-h-bomb-weigh-on-asian-stock-markets.html

Twice this week China suspended trading for the day when the market dropped seven percent. Today, the market was closed after being open only 30 minutes.

The last time a circuit breaker was used to suspend trading in the U.S. was in 1997, and that was only for a short time at the end of the day when the market dropped 800 points.

What if the U.S market had closed twice this week, had suspended trading today after only a half hour?

For me, this would be my own circuit breaker, where I would be putting plans in motion for an expected bank holiday. I would add to the cash I already have at home, make that one last big Costco trip (using credit cards, of course) and then anxiously watch the drama unfold the next day.

Overreaction at this point, or moving too slow? For those of you who have a bug-out location, when would you decide to go?

These are interesting times...

 

[merlinfire]

China and the US's economies are tightly linked. This should be sending off warning signs everywhere.

China's economy has limped along on BS numbers and massive QE for years, on a scale even larger than our own. It can't last.

 

[3jacks]

To answer your last question first...I moved to my bugout location in December. Sold the house, ditched 90% of the worthless collection of 'junk' (acquired over decades) and am happily living a more minimalist lifestyle!

I am one of those that believes the weakest link in the shtf list is currency/economy and it has the highest probability to fail. It will...just a matter of when. My 'over reaction' moment is not stock trading fail-safes it is capital controls. The moment that looks probable...whatever I have in banks gets removed along with a nice prep shopping spree on plastic! Hopefully I make that decision at least a day before it happens! We are lucky as we have been jettisoning debt for the last 5 years. And are pretty close to being able to survive a long term economic collapse. Just hoping things hold out for 1 more year!

 

[aramchek]

Joe McCarthy is rolling over in his grave. Never would he have imagined that the real commies were those who sold our factories and labor pool to China and joined our stock market to theirs at the hip. Or maybe he foresaw this, and was just looking for others to blame it on. Hard to imagine how the 1950's and Reagan's hatred of communism transformed into somewhat a dependency on it.

 

[Ralioth]

Hard to imagine how the 1950's and Reagan's hatred of communism transformed into somewhat a dependency on it.

I imagine the dependency is linked to rampant consumerism, as idealized by the Walmart sellout from buying only USA products, corporations (and governments) are outsourcing to the cheapest bidder, as well as the debt we allowed the Chinese to buy.

 

[gracenot works]

We owe a debt of gratitude to our previous generations
to be paid forward to our following generations.

 

[Asag]

Xi Jinping was advised on and off the record on the possibility of a decline and probably one of the reasons he has fanfared his supply side plans for the last year.

 

[Grotius]

Curious about some here who pay attention to the economy, and in fact have been prepping with a currency or economic collapse in mind:

What actions, if any, would you take if the NYSE was forced to use the same circuit breakers because of a stock market collapse, as is happening in China:

None. If I were inclined to sell, I would have sold at earlier signs of an over-heated bubble.

http://www.cnbc.com/2016/01/06/chin...orea-h-bomb-weigh-on-asian-stock-markets.html

Twice this week China suspended trading for the day when the market dropped seven percent. Today, the market was closed after being open only 30 minutes.

The last time a circuit breaker was used to suspend trading in the U.S. was in 1997, and that was only for a short time at the end of the day when the market dropped 800 points.

What if the U.S market had closed twice this week, had suspended trading today after only a half hour?

Still none.

For me, this would be my own circuit breaker, where I would be putting plans in motion for an expected bank holiday. I would add to the cash I already have at home, make that one last big Costco trip (using credit cards, of course) and then anxiously watch the drama unfold the next day.

Overreaction at this point, or moving too slow?

Overreaction.


For those of you who have a bug-out location, when would you decide to go?

These are interesting times...

Circuit breakers were not necessary before the advent of electronic trading on vast scales. As the markets are set up today, computer algorithms (in part) determine when and how selling takes place, and computers can sell millions and millions of shares of stock in a fraction of a second. This isn't possible when humans were conducting the sales.

Computer based trading has set into motion a phenomenon referred to as the "electronic herd". Think about a herd of gazelles on an African plain. One or two sense a lion. Then more do...then one or two may glimpse the lion. Once one or two gazelles panic and begin to run away, the entire herd does the same thing - even if they never glimpsed, smelled, or came within 100 yards of, the lion.

China was on a bubble, where business fundamentals were not sound but everyone wanted to make some money and invested in the market anyway - often not knowing much about the markets. China has been trying to let the air out of the bubble for a year or more now, but they couldn't deflate it quickly enough, and currently their bubble is catching up with their business fundamentals.

In the US, our business fundamentals are pretty sound. Housing starts and sales, commoditites, production and manufacturing, all are looking pretty decent. There is no reason to panic. We haven't even seen or smelled a lion.

But the international markets are so inter-connected and driven by computer-based trading, that the panic in China has caused the electronic herd to blindly start running away. This market activity has little to do with business fundamentals, stock valuations, price-to-profit ratios, or any other rational analytical conclusions. It's the electronic herd following blindly.

Most experienced investors choose not to panic. If you have a fairly balanced portfolio of solid companies that are doing well financially, then your portfolio will come back when the panic subsides. Decisions made in panic are seldom the right decisions.

Just an opinion.

(Hint: don't take any investment advice you receive over the internet, including mine. Consult a professional before you make any adjustments.)

 

[Gator Monroe]

If Dow Responds today (With drop of 250 points or more ) then I may build my AR10A2 in weeks as opposed to Months ...