Started a "market crash' thread yesterday discussing the frequency risk of such an event. Agamemnus brought up a point that we have had two severe reactions in 13 years under "these conditions" as he put it - specifically some Ponzi stocks which I can only assume to be Amazon, Tesla, LinkedIn, NefFlix, etc.
So my question for the board is taking into account present day QE, how does this market stack up in terms of the two that preceded those crashes?
To me, if the housing bubble spilled over as euphoria into the market, the tech bubble was without a doubt pure (this KoolAid tastes delicious!) madness. Neither of those had QE - they did have liquidity of course.
So what do we have now? Especially, I think in relation to the tech bubble. To me, that was when people truly lost all touch with reality.
I don't see euphoria out there. There are pockets of levitation but that happens all the time - Gold in the late 70's for example. I still see a lot of fear actually - indifference at best. People still seem quite scarred (understandably) by 2008. Is the scar as big as that for the children of the depression?
Keep in mind I'm asking in relation to the retail public's sense of the market - is it still fearful, or indifferent, or euphoric?
What we now have is the biggest government credit bubble of all times.
Regarding QE, if the velocity of money ever picks up, we will face hyper inflation similar to the Weimar republic of the Germans of the 1920's and 1930's.
But that's not likely to happen, as banks are not lending.....the consumer just isn't there demanding loans. If the employment picture ever improved it could happen.
Deflation is in the cards, though. There are also things happening in the background that could kick off a larger sell down, followed by a trend lower.
Donald Trump has stated that once the government debt breaches the 20-22 trillion level, a downgrade is imminent, but it could happen as early as this next raising of the limit.
The bigger thing to worry about at the moment, is the fact that the petro dollar is already out of favor, major economies are now trading directly in their own currencies for things like oil. This is threatening the reserve currency status.
there's all that matters - "if the velocity of money ever picks up"
banks have 2 TRILLION, offshore corps have another 2 TRILLION
and there's another corporate TRILLION in America, course that's been leveraged
through bonds and stock buybacks
so it's not a 1999 type bubble then? Cuz then, they were advertising that shyt on TV for god's sake and telling you to come down to Scotttrade and make a fortune in the morning daytrading while still making your TeeTime by 1. And yeh, average people quit their jobs to do that.