Expect A Stock  Markets MegaCrash in 2022
Channel: The Nomad Economist
Date: 01/01/2022

Will New VariantsTrigger A Markets MegaCrash
Nobody really knows what effect the pandemic will have on the global and US economy. But everybody knows that the Fed will continue kicking the can to the very limits of human perception (and beyond) for as long as their bamboozlers can bamboozle. The Markets have been poised for turmoil for a while now. It's already on a knife-edge because central bankers have failed the world. But the FED's plan is to keep the fire hose going full blast no matter what. A Market overvalued, global recession.
 US budget deficit growing. The only growth in the world has been more debt. organic growth has been negative for years. This virus is also being grossly underrepresented. So why is the market still so high? three main factors. QE, buybacks, and 401k contributions. each, at the margin, is buyers at any price to the tune of tens of billions A MONTH. QE is an enabler of socialism/communism by removing any correlation between return and risk, cancellation of the time value of money combined with the assumption that the value of work can be replaced with money printing buybacks facilitate the takeover of companies by the very management that should be accountable to shareholders 401k's are growing at the rate of a trillion a year from contributions that primarily are diverted to passive "index" funds. We are in a recession since 2008. The boom is only emulated by the printing press. it's not rocket science. The unwind of QE, the outlawing of buybacks and the retirement of 401k holders will see a ten-year bear market year with drops of 40-50% like the 2000-2010 and the 1970-1980 bear markets when the S&P dropped by 40-50% - taking the S&P back to 1,500 or thereabouts. Of course, ALL future savers for retirement can continue to be forced into buying overpriced housing and capital market assets (bonds and equities globally) that guarantee they live with less wealth and money than their parents for decades. Socialism has infected the planet and is cancer, constantly eroding life, liberty and the pursuit of happiness. The stock market is no more the economy per se. And anyone who knows anything about markets understands that it is merely a hologram waiting to be turned off when the machine is ready to grind the USA into protoplast patties. Now with the pandemic, that day is not far down the line. Get ready for the black swan to get cooked. The pandemic aftermath are already having a negative impact on Chinese markets and the economy as a whole, amid concerns of a global recession caused by supply chain disruption. China alone being the center of the world's supply chain. The impact on all of China is horrendous economically. Those possibilities mean falling stock prices for U.S. firms especially those exposed to the Chinese market and to the travel sector. Wynn Resorts and Las Vegas Sands, U.S.-based casino firms that own major properties in the Chinese territory of Macau, are both down . U.S. airline stocks are also hurting too, reflecting concerns that the epidemic will encourage people to delay or cancel travel plans. And Disney, whose theme parks in Hong Kong and Shanghai are closed due to the outbreak, is down too. China's economy is gonna go down faster than bottles of vodka and pills at Nancy Pelosi's house. My guess is a 10% chance of black swan type to halve the markets. 30% chance that it will cause just a bear market. And a 60% chance that it will cause a minor stock drop and then stocks will climb a wall of worry. The market is toppy regardless of the pandemic anyways. Mission accomplished. Now they can blame the virus for the upcoming financial crash and no one sees that the Baltic Dry Index was on record low already before we even heard about the pandemic. Time to bet against the Fed. People are going to stay at home. The Chinese economy is going to be hit first, then Western economies. There will be panic buying of supplies, but it won't offset the massive reduction in overall economic activity. Interest rate cuts and money printing are not going to save the market this time. 

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