Millions of Americans were devastated by the crash in 2008, losing their jobs, their savings, and even their homes. Wall Street banks, however, have just issued a dire warning—they say that a new economic depression is looming on the horizon, and it will be exponentially worse than 2008.
The stock market has recently been on a surge, thanks to President Trump restoring faith in America, but although many have enjoyed a nice increase in their stock portfolio, experts are warning that this could change…very fast.
Ever since the disastrous crash and bailouts happened nearly a decade ago, the Obama administration spent trillions of dollars inflating a bloated bureaucracy and pumping funny money into the economy. Now, we’re going to reap the whirlwind for it, according to numerous Wall Street banks.
HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle.
Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop.
Just like they did in the run-up to the 2007 crisis, investors are pricing assets based on the risks specific to an individual security and industry, and shrugging off broader drivers, such as the latest release of manufacturing data, the model shows.
As traders look for excuses to stay bullish, traditional relationships within and between asset classes tend to break down.
“These low macro and micro correlations confirm the idea that we’re in a late-cycle environment, and it’s no accident that the last time we saw readings this low was 2005-07,” Sheets wrote.
He recommends boosting allocations to U.S. stocks while reducing holdings of corporate debt, where consumer consumption and energy is more heavily represented.
In 1999, Wall Street conspired to bail out the hedge funds. Then, in 2008, the government bailed out Wall Street. Now, in this upcoming crash of 2018, who will bail out the government? Many financial experts, such as Mike Maloney and Tony Robbins, have warned of this upcoming “crash of the century.”
To anyone who understands economics, this shouldn’t come as a surprise. After two terms of Obama destroying our economy and job growth with terribly ill-informed liberal policies, our country is due for a reckoning—and many believe it’s coming sooner, rather than later.
When Obama decided to bail out the fat cats who got us into the mess of 2008 in the first place, that set us up for disaster. When he decided to push for minimum wage increases, that set us up for disaster. When he decided to more than double our debt, that set us up for disaster.
Hopefully, President Trump will be able to circumnavigate this storm that Obama chartered the US towards, but until then, experts recommend you put money in stable financial assets, such as precious metals. It is advised that you also have ample savings to help you weather this upcoming storm.