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Wats Wrong With The Stock Market Right Now Explained

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So what’s going on? There’s never any one reason why markets move or investors suddenly become extra fearful or optimistic. What’s happening now is that a confluence of factors are causing anxiety on Wall Street, and it’s starting to look like the post-crisis party might be coming to an end.

https://www.vox.com/policy-and-politics/2018/12/18/18146722/why-is-the-stock-market-down

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People walked Greenspan through the broken incentive structure and the Wild West of credit default obligations and credit default swaps. He recognized the danger and had full authority to regulate the derivative market, but chose to nothing because he was an ideologue who ignored facts/data. We all paid the price when the financial/housing crisis hit.

He later explained his inaction by saying, “I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms."

I’ll tell you one thing about the rich/powerful...often enough, they’re addicts who are willing to burn the world down for an extra dollar even though their wealth already surpasses any functional purpose. So it is laughable that Greenspan couldn’t conceive of people being willing to profit off the destruction of their own firms.

Now we’ve got Greenspan telling us he knows what the market will do as he advocates market timing...”Former Fed Chair Alan Greenspan said in an interview with CNN aired Tuesday that it would be a “surprise” to see the market stabilize here and take off, but even if it did, the outlook would be bleak. “At the end of that run, run for cover,” he said.”

I can’t roll my eyes hard enough at this man and I hope his god-like reputation as the Fed Chairman who could do no wrong doesn’t prevent others from doing the same.

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“What goes up must come down, and that might finally be happening now”

We may have a crash soon/now, but the implication that we’re guaranteed one is ridiculous. The market could remain flat (or have very little growth) for a period of time. That would bring the price of stocks in line with companys’ earnings. Today’s high valuations do not guarantee a crash, there is more than one way to get to a reasonable valuations. 

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