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"15 Signs That Global Financial Markets Smell Blood In The Water"
by Epic Economist
"Global financial markets are facing a devastating downturn that has already led big corporations to report losses of billions of dollars. As signs of weakness spread, speculators have nowhere to hide anymore. All major indexes are plummeting, and several high-flying stocks are dropping by as much as 90% from their peaks. In the US, Europe, China, and Russia, investors are getting increasingly spooked by the prospect of a severe slowdown in economic activity amid extremely stretched market valuations. Pessimism is everywhere and fear is rapidly spreading. Bubbles have started popping, and top Wall Street players can see that a stock market crash is on the horizon.
Things could get much uglier on financial markets when the US economy tips into recession. Thanks to 8.5% inflation, real hourly earnings in the US have actually shrunk by 2.7% in March, compromising Americans’ purchasing power. In 2020, consumers used their stimulus checks to pay down credit-card debt, but since 2021, they’ve been borrowing money at a breathtaking pace, and rising interest rates are leading us to another credit crunch. According to market strategist David P. Goldman, this also means that when the US goes into recession, the tech complex could face something like the devastation that ensued after the 2000 recession, when the NASDAQ 100 lost more than 80% of its value between March of 2000 and September 2002.
All of that spells more trouble for stocks, especially at a time of extreme overvaluation. The Buffet Indicator is at an all-time high, showing that the U.S. market capitalization was at 211% of GDP in January. In a recent conference, Berkshire Hathaway lambasted Wall Street for encouraging speculative behavior in the stock market, effectively turning it into a “gambling parlor.” “Wall Street makes money, one way or another, catching the crumbs that fall off the table of capitalism,” Buffett said. “They don’t make money unless people do things, and they get a piece of them. They make a lot more money when people are gambling than when they are investing.” Buffett sustained that most large American companies leading the rally have “become poker chips” for market speculation.
There is way too much risk, way too much debt, and way too much leverage in the global financial marketplace. The entire system seems to be racing toward another major crisis. Only this time, big governments around the world won't be able to come to the rescue. That is why what is happening right now is so worrying. The global financial markets are like a house of cards built on a foundation of sand, and investors are more vulnerable today than they have been at any other time in history. When a major domino falls, it is likely to spark a massive chain reaction, and once confidence disappears, the game can change very quickly. For that reason, today, we compiled some key signs that the carnage in financial markets is about to get worse."
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