Is another financial collapse coming?

Stock market goes down 2.8% on Monday. Guy says the bubble is about to burst. (What bubble?) Near end of video he says Tuesday is going to be disastrous.

I see that the stock market recovered 1.2% today. Disaster, huh?

What is this huckster selling?

 

Yes he is.

We are 16 days from a recent record market high. We are 9 days from a recent 2nd highest market day. The market typically pulls back a little after it sets new records. The ongoing rhetoric over the trade war and resultant moves--Trump putting on more tariffs, China devaluing their currency--isn't helping the market.

There is no bubble to burst, that I know of anyway. Earnings reports just came out for the 2nd quarter and they were generally upbeat and fueled the recent records. The economy is strong.

 

There is a tariff spat going on between China and the US. We put on tariffs, they retaliate by putting on tariffs. We put on more tariffs, they put on more tariffs.

Other than that, you're going to have to be more specific for me to answer your question.

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There is always another financial collapse coming. Such is the nature of economics. Boom and bust cycles can be managed as to their severity but they cannot be avoided altogether. That is why it is important for individuals to do everything possible to be debt-free and to live on less than they earn.

 

China has met their match with Trump. Period. China absolutely cannot 'win' in this standoff. Our President Donald John Trump is going to soundly defeat the Chinese threat without firing a shot.

Hide & watch, wait & see.

 

Yes sir. I make money in the downturns. I actually do better in the down markets than I do in the boom.

 

Assuming the CommunistCrats don't detail him.

 

I can how you can do that in a down economy. I do not make as much money in a down economy but I am able to increase my market share. It is actually a growth time for me.

 

The main cloud in the sky is massive public and private debt totalling perhaps 100 trillion dollars.

 

In the movie Wall Street, Gordon Gekko says, "Greed is good". Of course, we know greed is not good. Greed destroys. But greed does make some people wealthy. When it comes to greed we often think of fat cat bankers, brokers, and Real Estate developers but that is an incomplete picture. When tech stocks were all the rage in the late 1990's, people were cashing out their 401Ks and retirement accounts to get in on the rising stock prices. The same with the housing bubble that crashed in 2006. People were buying homes with no income verifications and interest-only mortgages hoping to get in on skyrocketing equity. Those who timed the market right made a lot of money. Those who timed it wrong were often wiped out financially. Others navigated around the financial collapse through questionable tactics. After the housing market crash, a new term started to be heard with increasing frequency, "strategic default". Individuals who lost the equity in their homes no longer wanted to pay for a house that was worth far less than it was worth, so they just stopped paying their mortgage and pocketed the money until their home was foreclosed upon. Strategic defaults created relative ghost towns in some neighborhoods like Cape Coral, FL. Areas like Cape Coral enjoyed a construction boom while home prices were high. When the market crashed many homes were simply abandoned. The sad thing is that someone has to pay the bill. In the case of the housing market crash, taxpayers bailed out the banks and investment houses.

As Christians, we should act prudently money. We know we are supposed to honor God by giving. In addition to giving we should leave beneath our means. A financial counselor my wife and I used early in our marriage told us to establish a "75% Budget". His theory was to live on 75% of our income. The missing 25% was to go into savings until we had saved 6 months worth of our income. After that, the 25% would be our savings/investment amount. The 25% would also serve as a buffer in case we went through financial distress (which we did on more than one occasion). That sort of living is hard to do with credit being so plentiful. At its core, a materialistic lifestyle is a carnal lifestyle and is not a display of faith.

 

Trump thinks that we can outgrow the annual deficits that soon will reach 100 years of red ink. The reality is that the public is giddy and dependent on government mentally. Thus politicians can borrow and spend and then be applauded by the public. We are rapidly approaching the end of the line. It will not be pretty as the train is going full speed with no brakes. The derailment will be worldwide.

 

In theory a hot economy can out grow deficits. The problem with that is you can't truly forecast economic growth and of you get it wrong you balloon the deficit. The only thing that works is reduced net spending, not just the reduction of projected increases.

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