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17

Mar

2008

The Crash of the Century? Print
Written by Adam Lass   
"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war." - Alan Greenspan, March 16, 2008

Five short months ago, the Dow was at its all-time high of 14,198. I warned readers at that time that the party was over.

All the economic signs that are being splashed across every front page were already there (if you didn't believe Wall Street's spin and knew where to look to find the real story!):

  • Industry advisors knew that the real estate failure would to extend into 2009 and foreclosures would spike at least 30%.

  • Banking insiders already knew that billions in mortgage derivatives weren't worth the paper they were printed on.

  • Astounded that oil is over $100 per barrel? Oil executives knew for a fact that import prices were climbing at a record rate.

  • Shocked that the dollar has lost 15% against key foreign currencies? The Federal Reserve knew exactly what would happen if it cut more than 100 basis points off interest rates -- and so far, it has cut more than twice that much with more to follow!

Since that day last October, the U.S. stock market has lost 20% of its value (just as I predicted). And it's not done yet!

Some analysts are calling it the worst situation they've seen since the crash of 1929, Others are saying it will more likely resemble the meat grinder of the 1970s, when the Dow was cut in half and we didn't see a new high for a decade. Washington claims this is just a simple correction and everything is "under control."

Even the most optimistic technical scenario calls for the Dow Jones Industrials to fall to support at 9,976. That's a loss of over 2,000 points, another 17%! And there's no guarantee whatsoever that it will stop there.

To the spin-masters in Washington, another fall to Dow 8,676 -- an additional 28% loss that will cost investors billions! -- would still qualify this train wreck as "a bull market." Only a full-on rout below Dow 7,350 could change their minds, and by then you will have lost 48%. Virtually half your money up in smoke!

Dow Jones Industrial Average, (INDU.X)

Just as I predicted this crash to a T, I also showed investors exactly what they needed to do to preserve their capital. Since this 17% downturn began, Bryan Bottarelli and I have guided our readers to cumulative maximum gains of over 1891% on put contracts against U.S. blue-chip stocks.

What's more, in our special "Storm Warning Report," we have specifically alerted readers to an option contract that will automatically gain 61% for every $100 the Dow loses.

Should the Dow Jones Industrials "only" fall to 9,976, this asset would gain 129%. A genuine bear market breakdown would push those gains to 283%.

It is too late to stop this drop. Wall Street can whine and beg... Washington can drop rates to 1% and offer every major bank a bailout... it doesn't matter!

But it is not too late for you to protect yourself and your money from the "the worst market in decades... and possibly of the last 100 years."

Adam Lass
Editor, WaveStrength Options Weekly




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