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Wed Dec 25, 2019, 07:01 PM

How 2019's Market Top Parallels the 2008 Financial Crisis (w/ Sven Henrich)



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I think this is one of the best financial videos I've watched in a long time. Instead of rehashed content or pre-screened questions, they just let this guy's expertise flow. He addresses the idea of permanent QE, and parallels 2008 and 2019.

"No bull market without central bank intervention."

"Complete central bank capitulation ... artificially inflated markets."

'They had to cut interest rates 5% to stop the bleeding in 2009, and now they barely have 2% to work with.'

12 replies, 1451 views

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Response to bucolic_frolic (Original post)

Wed Dec 25, 2019, 07:29 PM

1. Uses mostly log charts, which is an imporant thing.

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Response to bucolic_frolic (Original post)

Wed Dec 25, 2019, 07:32 PM

2. The tRumpers r doing all they can to stop it

But their Tax Cut created it.

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Response to alittlelark (Reply #2)

Wed Dec 25, 2019, 08:24 PM

5. Market should be somewhat precarious. Overvalued. aged bull, major support

from record corporate buybacks and stock options, as well as 7+ trillion foreign moneys - not solid, long-term, buy and hold, investment types.

However, . . .

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Response to empedocles (Reply #5)

Wed Dec 25, 2019, 08:31 PM

6. I invest in foreign currency. I generally do very well,

But the propaganda and deception regarding currency valuations r throwing a nasty tRumpian spin into evaluations.

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Response to bucolic_frolic (Original post)

Wed Dec 25, 2019, 07:36 PM

3. Sad to say but it may take a market crash to get rid of that SOB nt

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Response to bucolic_frolic (Original post)

Wed Dec 25, 2019, 08:00 PM

4. I remember the '87crash

And several since then.

And right now, we are significantly over valued, AND the central banks do not have enough interest rates to drop in order to stop the next crash.

IĎM thinking 45-90 days before all he k breaks loose for a downturn. Trumpís impeachment trial may be the trigger, even if he isnít removed, it will be the end of the growth I market prices.

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Response to James48 (Reply #4)

Wed Dec 25, 2019, 10:19 PM

7. And the major causes of the '08 crash haven't really been fixed.....

...Thanks to the trickle-down/piss-on free-market-is-god repuglikans. They haven't allowed us to do SH*T about the sub-prime mortgages and derivative creations that fueled the collapse. Interest-rate and credit default swaps are STILL unregulated time-bombs waiting to explode again. All these years later, there are even more TRILLIONS of dollars of liabilities wrapped up in these out-of-control Frankenstein-monsters waiting to detonate our economic security into oblivion. (I hope POS-Sen. Phil Gramm and his POS wife rot in hell for leaving us out to dry on these things.)

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Response to bucolic_frolic (Original post)

Thu Dec 26, 2019, 05:30 AM

8. Thanks for posting

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Response to bucolic_frolic (Original post)

Thu Dec 26, 2019, 01:00 PM

9. When QE is infinite, profits are infinite, and the market has no top

So it's little wonder, after 10 years of .25% to 2.50% interest rates due to QE1-2-3-4 we have a booming stock market that just drifts higher for months on end every time the Fed drops interest rates. Powell has lost control because he capitulated to Trump's tirades. If Democrats secure the White House, the Fed will know they have a window for make up time. Interest rates will rise.

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Response to bucolic_frolic (Original post)

Sat Jan 11, 2020, 10:07 PM

10. Finally got time to listen to this, glad I had saved it. Valuable perspective and I learned some

interesting concepts.

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Response to bucolic_frolic (Original post)

Sat Jan 18, 2020, 06:57 AM

11. Ahhh, the recurrent

OMFG the market is overvalued SELL SELL SELL post.

In reality, the current market is not overvalued. It's on the high side, but BFD. And if you're trying to time the market, you are playing a fool's game. Okay, so take out some profits, but you're an idiot if you sell everything.

Keep in mind that the market periodically reaches new highs. It never reaches new lows.

And on average, the market goes up two out of every three years.

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Response to PoindexterOglethorpe (Reply #11)

Sat Jan 18, 2020, 02:48 PM

12. I would add that the various P/E ratios that say the market is overvalued don't take into account

that the competition to stocks -- bonds and other fixed income investments -- have way low interest rates compared to the average of the last 80+ years. It's impossible to find anything above the 2's percent range in bonds unless one is willing to invest in high-yield (aka junk) bonds or go way out like 30 years in maturity (and bear a ton of interest rate risk betting that interest rates will stay about as low as today).

Edited to add: That said, I'm not saying stocks aren't valued on the high side even with consideration of the above. But timing the market is very difficult because it involves making two correct decisions: selling at the right time and buying at the right time. And one has to be in the stock market most of the time in order to have any chance of beating a buy-and-hold investor.

Also, dividend yields on many high quality stocks beat the 2's percent yields on bonds (and also grow over time, unlike bond interest coupons which are "fixed", that's why they are called "fixed income" investments).

But the perma-bears are always right (in their own minds) -- when the market is high, they'll say "it's a bubble, its a bubble". When the market turns way down (and it will, temporarily), they'll say, "see I told you so".



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