This is a C&P from YouTube, but I thought it was a fair assessment.
20 reasons why the stock market will go down much more:
1) 330 Trillion dollars of very poor credit market debt that needs to bedeleveraged and the Fed's 1 Trillion farts can't do anything to stop this.Japan has been doing for 30 years what the Fed is trying to do now. Guess what: it won't work when the world has 330 Trillion dollars to deleverage by at least 50%. We're in a deflationary trap and spiral.
2) Corporate share buyback ponzi model has come to an end as publicpension funds (states, municipalities, cities, etc.) have no tax revenuespresently to buy corporate bond issuances to fund corporations who use that very money to buy and drive up their own stock to stuff management's pockets with bonuses.
3) 90 cents of every dollar S&P 500 companies earned in the last 5 yearsalso went towards corporate buybacks combined with an unprecedented issuanceof corporate debt and equity dilution helping this endless ponzi scheme.
4) Economy for over a decade barely growing at 1% average despite all theabove Endless rounds of QE for 12 years now, interest rates pushed to zero punishing savers and tax cuts that were really not necessary.
5) Consumer debt to income ratio at unsustainable all time high levels(175 debt to income ratio and climbing higher as well as 12 times debt to savings ratio and climbing higher) with real unemployment (unemployed, underemployed and not counted in workforce) at 50% plus.
6) All stock market indicators at all time high levels. S&P P/E was at21.5 when S&P was 3393 and now, even if you cut earnings by 25% which is VERY conservative, you have P/E moving closer to 25 which is la-la land (you have to wait 25 years to get your money back on your principal which iscrazy); Price to Sales Ratio over 2.5; Enterprise Value to EBITDA over 25;Buffet Indicator (Market Cap / GDP) over 135%; Shiller P/E over 27; Q factor (the market value divided by its assets' replacement cost) at 1.76.
7) Bond market has been screaming major recession/depression anddeflation for almost a year with yield curve inverting three times and the30-year T trading almost at 1% (totally crazy).
8) M3 essentially at zero with consumer (70% of economy traditionally and 90% in 2019) tapped out on debt and 50% unemployed/underemployed.
9) Corporations (30% of economy) already in recession since the start of2019.
10) The corporate bond/debt market in the mother of all bubbles with 90% of bonds trading at one notch above junk status.
11) The IMF has stated that this year, the global economy will experiencethe worst recession since the great depression. It has also stated that forthe first time since the great depression, both advanced economies and emerging markets are in recession with growth in advanced economies at -6.1% with income per capita projected to shrink for over 170 countries. Most economists are expecting the Q2 of 2020 to be in the -20% plus range in economic contraction and this will be catastrophic.
12) Debt to GDP of all developed countries in the 150-300% range...who would have thought.
13) The stock markets now are compromised of 5 companies representing 25% of the S&P and 40% of the Nasdaq. These percentages are beyond alarming. Facebook, Amazon, Apple, Microsoft, Google are up 11% on the year and therest of the 495 companies of the S&P 500 are down 15% on the year. We have two markets in essence.MSFT trading at 27 times 2021 earnings estimate, AAPL at 22, AMZN at 58, GOOG at 21 and FB at 23. The rest of the 495 companies of the S&P 500 trading at 16. Not a healthy market. P/E ratios should not be over 16.
14) Healthy stock markets don't go down 35% and swing back up 30% in amatter of a month. This type of volatility always signals lower pricesahead. We're in fact in horrible company...this is the fastest 35% downward move in the stock market. And only two other times the stock markets have gone up 30% this fast: the first leg up of the Great Depression and the first leg up of the Great Recession. We all know what happened afterwards...lower lows.
15) Major head and shoulders top forming while we are hitting the 61.8%Fibonacci level and bouncing around the S&P 2,900 wall. We are looking very weak technically.
16) Bear markets last on average 15 months. We're not even in the secondmonth of this bear market. Wall Street will be soon shorting the market todrive it down and buy it at a later date for much cheaper. Don't kid yourself: Wall Street is playing the public for fools and their greed to slam the market down and make money will happen before they buy everythingfor 50 cents on the dollar.
17) Retired baby boomers pulling money out of the stock market like notomorrow, while millennials have no money to invest.
18) Berkshire Hathaway sold 8.6B$ of equity and only bought 4.4B$ in 2020.NET-NET, they have liquidated Berkshire Hathaway sold 4.2B$ of equity.
19) For those who are screaming inflation, they are dead wrong. Go study history and study it well: inflation only happens when demand overwhelmingly exceeds supply (which is not even remotely the case, it's actually the total opposite i.e. there is so much supply of everything, we don't even know what to do with it) or when a country prints money over money to serve its debt and has to keep doing that as they can't print fast enough. We have none of those presently as it relates to the USA or the US$.
20) The market idiots are out in full force with their stupid punch lines.Be careful from media, Wall Street and government...they are all charlatans,liars and manipulators. They dig a hole, stand next to it and tell everybody there is gold inside. We a two tiered system compromised of crony capitalism combined with theworst part of socialism. Large corporations are benefiting during the good times and during the bad times when these same companies who should be going bankrupt or getting bought pennies on the dollar by more responsible corporations or getting merged with competitors are getting selectively bailed out by the Federal Reserve who is picking the winners and losers by their size and too big to fail criteria. Crony capitalism on the way up, socialism on the way down. This my friends is a broken corrupt system.
You want to have a glimpse of our future? Go look at the Nikkei from 1989 to today. Japan has been doing this for the last 30 years and their market is still down 50% from its all time high. The stock markets are now trading in swings like penny stocks with all freemarket price discovery destroyed and not an ounce of sound monetary policy left. You have a bunch of doushebag academics (who think they know best) not only fighting mother nature but also fighting the principles of economics where boom and bust cycles need to be normal occurrences left to their own devices for productivity to improve over time. But the Federal Reserve doesn't give a hoot about the principle of economics and they have become the real virus infecting the world because they have us play the game with one set of rules yet those rules are constantly broken by them to be the buyer/lender and owner of last resort and implement their grand scheme of becoming the world's central bank and having the entire world as their slaves. If common folks had this behavior, they would end up in jail. And this is a virus we won't be able to get rid of. Who wants to invest in a rigged market where prices are not based one bit on sound economics like reasonable P/E ratios, earnings, free cashflow growth and dividends where earnings are cratering. The very timely Corona virus is the medium that is exposing the fragility of this corrupt, selfish, self-centered astronomically over indebted overleveraged system.Show less
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