Why did so many buy tech stocks into early 2000 when it was the worst thing you could do? Momentum follows momentum, until it doesn't. I knew a guy who bought a tech mutual fund in March 2000, and he lost 50% in a short while, on a mutual fund of all things. Here we have the tax benefits, the relative lack of harm from trade war, etc, all of which causes purchasers to ignore the obvious. In a downturn, smaller companies will fair worse than big companies, and they will take a bath. I recall an article I read describing the small businesses that went bankrupt in the 2008 crash in the NY area, it was quite a list of carnage.
Why would such holders be concerned, you say, isn't everything fine?
The “smart money” is getting out of stocks at a rate that we haven’t seen since just before the financial crisis of 2008.
Moody’s is warning that a “particularly large wave” of junk bond defaults is coming. And as I have written about so many times before, junk bonds are often an early warning indicator for a major financial crisis.
According to the FDIC, a closely watched category known as “assets of problem banks” more than tripled during the first quarter of 2018. What that means is that some really big banks are now officially in “problem” territory.
U.S. Treasury bonds are having the worst start to a year since the Great Depression
Mortgage interest rates just hit a 7 year high, and they have been rising at the fastest pace in nearly 50 years. This is going to be absolutely crippling for the real estate and housing industries.
Retail industry debt defaults have hit a record high in 2018.
We are on pace for the worst year for retail store closings ever.
Source:
http://theeconomiccollapseblog.com/archives/12-indications-that-the-next-major-global-economic-crisis-could-be-just-around-the-corner
