Building Financial Danger – December 20, 2011 Update

On October 17 I wrote a post titled “Danger Signs In The Stock Market, Financial System And Economy.”  This post is a brief third update to that post.

My overall analysis indicates a continuing elevated and growing level of danger.

I have written numerous posts of some of what I consider both ongoing and recent “negative developments.”  These developments, as well as other highly problematic conditions, have presented a highly perilous economic environment that threatens the overall financial system.

The “downside” of potential price depreciation among many asset classes is substantial, as many asset classes are currently “asset bubbles,” a topic that I have extensively written about.

As far as the stock market is concerned, I don’t believe the October 4 1074.77 low on the S&P500 will prove to be a “lasting bottom”, and the dynamics as described in the October 20 post (“Thoughts On The Next Stock Market Decline“) and other disturbing long-term “downside” considerations still apply.

As reference, below is a 1-year daily chart of the S&P500, indicating both the 50dma and 200dma:

(click on chart to enlarge image)(chart courtesy of; chart creation and annotation by the author)


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1205.35 as this post is written