By now, everyone should understand why I’ve been warning readers about the stock market bubble. And I didn’t warn you just once. I’ve been doing…
By now, everyone should understand why I’ve been warning readers about the stock market bubble.
And I didn’t warn you just once. I’ve been doing it repeatedly.
The Dow Jones industrial average was down nearly 5,000 points from its peak before a sharp rally in stocks Wednesday made the performance just a little less dreadful.
Even with Wednesday’s 1,000-point-plus gain, the Dow is still down just below 4,000 points.
As of Monday — Christmas Eve — the stock market’s December performance alone was the worst since 1931. I think we all know what was going on back then.
And despite the repeated efforts to coax the stock market higher — “manipulate” is actually the right word — Wall Street’s disaster of the past few months continued unabated until Wednesday’s miraculous intervention by the people who want stock prices up.
You are going to hear a lot of nonsense about the stock market from all the people who didn’t caution you about the Wall Street bubble. Ignore them.
I’m not only going to tell you again what caused the recent slow-motion crash in stocks but also what problems lie ahead. What I won’t tell you — because nobody can — is when the overall stock market will be safe again.
As I’ve said in many recent columns, Wall Street was up against a lot of challenges, any of which could have caused prices to sink. Here are some of them.
First and foremost is the fact that the Federal Reserve has been undoing a decade of easy money. By that I’m referring to not only extremely low interest rates but also the scourge of quantitative easing, which created trillions in extra money that was used to keep borrowing costs the lowest they’ve ever been.
