7 Signs We’re Heading Towards Another Market Crash

It’s interesting that the film,“The Big Short” is in the running for an Academy award in 2016, as the global economy seems headed for another big market crash. Whether it’s life imitating art or the other way around, if you’re still investing in stocks and mutual funds, you haven’t grasped the message of the 2008 market crash. If you’re smart you will read the signs better this time and save or better yet, make a fortune.

Due to the systematic nature of the banking system, and the continued and almost identical trading of derivatives that caused the great crash of 2008, the next collapse will be even bigger and more devastating to the people who can afford it least.

Even though Deputy Justice Yates has promised more prosecution and stiffer penalties for financial crimes, this will not re-fill your accounts after the crash. The people most at risk during the stock crash of 2016, are individual investors and those who again have their pensions and 401ks tied up with Wall Street firms.

There are two major reasons that we are headed for an even bigger crash than 2008.

First Reason For Another Market Crash

The first reason is that we have again created, and over-invested in bubbles. I’ll talk about this more later, but the overvaluation of companies, is a bubble waiting to burst. The bad news is, there’s more than one bubble waiting to burst.

Second Reason For Another Market Crash

The second major reason that we are headed to another bigger crash is history. The economy has cycles and as it goes through these cycles the crashes either gets smaller or  bigger. The crashes only get smaller though when investors learn their lesson. In this case, after the 2008 crash we didn’t really learn our lesson. In fact similar kinds of risky derivative investments that caused the 2008 crash are still being used. So chances are the crash of 2016 is going to be even bigger as you can already see the beginning signs of yet another global financial meltdown.

The Seven Signs We’re Heading Towards An Even BIGGER Financial Collapse:

  1. China, Greece and other failing world markets. The massive and unprecedented crash of the Chinese Stock Market over the past few weeks should be a flashing red danger sign for US investors. Instead many investors are viewing the financial crises in other countries as a chance to buy other currency like the Euro on the cheap. This could lead to even more losses when further countries have economic turmoil.
  2. Printing Money. The process of printing money and giving it to CEOs and bankers as part of a bailout, was never a viable plan. We are in the midst of unprecedented global inflation, with some countries like Venezuela seeing forecasts of up to 720%
  3. The data doesn’t look good for the markets. Retail Sales, Wholesale Sales, Factory Orders and even US GDP have begun to drop. This is almost identical to what happened before and during our last financial crisis.
  4. Unemployment rates. While the unemployment rates have improved a little. There are still far too many hard working Americans out of work. The reported percentage of 5.3% from June of 2015, climbs to 5% when taking into account those who are underemployed or working part time wile continuing to search for a job.
  5. The failure of Quantitative Easing. The process of quantitative easing is used by central banks to stimulate the economy! Typically this is done by buying financial assets from banks and other financial institutions. In 2015 a study titled “Persistent Overoptimism About Economic Growth,” by Kevin J. Lansing and Benjamin Pyle of the Federal Reserve Bank of San Francisco, was published. In the study Lansing and Pyle argue that since 2007 Federal Open Market Committee Members have been overly optimistic about projections. Lansing and Pyle also discovered that the use of policies like QE were likely to create biases towards financial assets and away from real ones.
  6. Bear Market ahead. A Bear market is declared when the market has a decline of 20% from it’s 52 week high. The S and P 500 is down 12% from it’s high in May 2015 and another 7.5% since the beginning of January 2016. That’s a 5% decline, which is essentially a Bear market already, with the worse losses possible in the event of a crash.
  7. Unsustainable growth. With Quantitative easing in effect driving more money into the stock market, the market grew at an unsustainable rate. This rate peaked in 2013 as the S and P 500 soared 30% .

By now, you can see that the crash of 2016 is coming! The question is what are you going to do about it?

No matter what, don’t get blindsided by the upcoming crash of 2016! The 7 signs I’ve revealed to you today are just a sampling of the literally dozens of signs the stock market will crash in 2016. The market is going to crash, the choice is yours, whether you lose or profit from it.

 

 

 

 

 

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.