Having posted on gGogle finance discussion board for around two years now I’ve seen a lot of people come and go. Some people really have their heads screwed on and most are complete idiots with no idea of basic logic or reasoning. Reinhart is one of the former.
He often posted in quite cryptic ways and had some wacky ideas of which not all turned out to be true, but at least there was good reasoning and research behind his work and you could see why he was coming to such conclusions.
His biggest prediction to date was that the markets would crash on September 15th 2008, which turned out to be the day Lehman Brothers filed for bankruptcy protection.
As a result of this prediction he now has quite a following. This is no surprise, however I am still skeptical.
The DOW did not crash on that day, it fell 500 points but considering the news it was far from a crash and 5% is not what I’d call a crash either. The crash was weeks later starting in October. The DOW shed approximately 3000 points in 7 trading sessions starting on the 2nd October 2008. That’s a crash, ~30% in 7 sessions.
Google finance has the following data for the DOW on the 15th September 2008
Date: 15-Sep-08
Open: 11,416.37
High: 11,416.45
Low: 10,917.51
Close: 10,917.51
Volume: 432,965,000
Compare this day to September the 17th and 29th
Compare it to the 2nd, 3rd, 6th, 7th, 8th, 9th and 10th of October (Not every day was a huge drop but 3000 combined)
Compare it to 15th October, where the DOW nearly had a 1000 point high low delta, finishing down over 700 points, same goes for the 22nd.
Compare it to the 5th, 6th, 12th, 19th and 20th of November
These were all big down days too. It was not a secret that Lehman was going to collapse, since march many of us were speculuating it as the next to go from the day Bear Stearns collapsed. WaMu was on the list too although I think that was a forced move by the gov for reasons outside of public knowledge. They were certainly not in the state Lehman were.
So was Reinhart right? In my opinion only partially. There was not a crash and banks were expected to fail, the odd’s were with his prediction. Funnily enough though even with Lehman failing the market was extremely resilient. That said it is still interesting to follow him. If he’s right this time the chances of co-incidence are decreased, however I am expecting a big down movement in the coming weeks anyway. I’m not going to take some 300 point drop as a crash. 300 points is just not a crash if you ask me. There have been many -3% / -4% days in the history of the markets, none of them crashes. -10% you have my attention. -6% I’ll start considering that it is not a co-incidence
Here’s a link to his blog, and one of his posts anyway. http://www.enterprisecorruption.com/?page_id=2025
You may want to read up on Legatus too, which is what his predictions are based on. Yes it’s religion. Don’t disregard it because of that though. Relgion is the greatest control system ever invented 
