Posted on 06/19/2023 4:40:58 AM PDT by CFW
The conditions have now aligned for a repeat of the major stock market crashes that have occurred since the founding of the US Federal Reserve Bank (Fed) in 1913. Considering their vast experience and resources, the Fed has to know that their plan to control inflation by raising interest rates rapidly and significantly since 2022, and also tightening credit this year, will likely result in another major crash. Although the Fed has issued vague warnings about the impending pain on the stock market and economy, they have not explained how and why they will again wipe out trillions of dollars of wealth of unsuspecting investors.
As Marty Zweig, a successful Wall Street investment adviser known for data studies, warned, “Don’t fight the Fed,” because the central bank largely controls the direction of the stock markets. Generally, the major stock market booms start with the Fed stimulating slow economic growth by lowering interest rates, often while the government increases deficit spending. As Austrian business cycle theory predicts, this results in asset price inflation (e.g., stocks, houses, etc.), and sometimes also consumer price inflation. The major busts result when the Fed seeks to control the inflation by raising interest rates significantly, while the government reduces deficit spending.
(Excerpt) Read more at mises.org ...
Also, a related article here:
https://www.zerohedge.com/markets/hedge-fund-cio-only-thing-worse-pausing-prematurely-having-fed-chair-who-lacks-decisiveness
"Hedge Fund CIO: Only Thing Worse Than Pausing Prematurely Is Having A Fed Chair Who Lacks Decisiveness And Determination"
The Fed since 2008 is one of the major reasons the dollar is devalued, which makes stock prices rise. Now the Fed is undoing some of that.
Or as some stock traders say: "Don't fight the Fed."
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What is really important is having stock in stable, profitable corporations that pay dividends.
“Considering their vast experience and resources, the Fed has to know that their plan to control inflation by raising interest rates rapidly and significantly since 2022, and also tightening credit this year, will likely result in another major crash.”
Given the profligate spending by the federal government over the past few years since Covid, the increase of interest rates was inevitable.
A major crash is likewise inevitable.
Microsoft has a market capitalization of $2.58 trillion according to a Google search.
That’s about $8,000/American.
I was seriously thinking of smashing my PC recently.
I’ve read that Microsoft is going to only do security updates for Windows 10 going forward. Maybe my PC will be better behaved when connected to the Internet.
I tend to agree but have learned the hard way to take zero hedge with a big grain of salt.
Isn’t doing that on the currency market how Soros made his pile?
Top 100 companies by market capitalization:
https://companiesmarketcap.com/
Number 100 is IBM at just under $125 billion.
I blame the 2008 crash on George W. Bush.
We then got the Usurper because of George W. Bush.
And they became fast friends.
bmp
Sort #1: Get a list of companies paying top dividends. Sort #2: Most likely to perform during recession. Create a nice income stream for retirement.
Nonsense.
A belief that the market is going to collapse by significant investors is a self-fulfilling prophecy.
There are investors who follow the markets carefully and who know more than the idiots at the Fed can possibly know.
If these investors thought a collapse was imminent, the market would collapse NOW because these investors would rush to pull out of it (causing such collapse).
To an extent ... but I remember specific warnings to Congress about Fannie and Freddie and the rats would have no part of criticizing one of the biggest cash cows.
2008, you can blame over a host of regional real estate ‘booms’ which were hustling-up home values by double and triple the 1998 values.
I worked with a guy who’d sold his Florida home in 1998 for around $250k. He tracked the house, and it rose to $450k by 2005 (it was sold), and hit around $750k by 2008 (put on the market again). A year after the collapse, it was back down to $250k.
People had this feeling that the rise-factor was ‘normal’.
Home Deport has a market capitalization of about $302 billion and about 2284 stores.
That works out to be about $130 million/store.
Home Depot has a pretax margin of about 14%.
The Federal Reserve deserves the most blame for the crashes (by raising rates) and the most credit for bull markets. Plus there are "organic" market cycles. For those reasons I don't blame Clinton for the dot com crash nor W for the 2008 crash. But the prez (and Congress) can at least make the market cycles better or worse. Compare W's rebound from the dot com crash to Obama's slow grind rise from the 2008 crash, even with the Fed implementing "zero rates" for Obama as well as QE. One could argue that the reason the Fed had to raise rates almost all of W's presidency (which IMHO made the market crash again) was because of how quickly the market rebounded from the dot com crash.
Why?
I just remember reading several times about W borrowing crazy amounts of money from China to finance the never-ending war and nation-building (what I was reading at that time - don’t remember where it was - maybe here?)
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