Just re-reading Ray Dalio's, Big Debt Crises book again and noticed some similarities to now and a few other major crashes, including the 1929 stock market crash.
You can download a free PDF version here, https://www.principles.com/big-debt-crises/
A lot of sound advice in there, as well as Stan Druckenmiller's recent interview, both worth watching and reading a few times.
Not trying to give you any nightmares here but there are some similarities to what's happening now and previous crashes.
There's also plenty of other signs to look out for in the book and that no 2 crashes are exactly the same.
Have a read and listen to both then make up your own judgement on what is happening and whether or not it compares to now.
The page below reminded me of the recent Trump and PPT (Plunge Protection Team) tweets about 'shoring' up the market...
In the news article below the 'bankers pool' took out an ad in the New York Times, telling the public that this was "the right time to buy" after they 'stabilized' the market.
This quote also sounds very similar to Trump's recent quote "a tremendous opportunity to buy."
Make of that what you will.
The PPT could probably bring a temporarily halt/bounce to stop a big market drop but I highly doubt they could prevent what is happening to the economy as this is what the market has been pricing in.
If the economy is indeed slowing as much as the market is pricing in then do the PPT plan on buying the whole stock market or something in the event that everyone wants to sell...?
There is also the 2 and 10yr yield curve that is close to inverting.
Why is this important?
Apart from being a predictor to recessions it could actually cause them too.
Banks will usually make lending standards tighter on all loans when the curve starts to invert, as it's a signal that there may be less favourable/uncertain economic conditions coming.
Credit is needed to stimulate an economy so less credit or tighten lending/credit conditions limits expansion and growth.
IMO and if the PPT was/is actually real, then it would probably be a wiser move to 'shore' up the bond market and stop the yield curve from inverting then trying to stop a wave with a bandaid.
The stock market is always going to do what it wants to do, not what we want or what we try to make it do..
All of this may or may not play out in the end so it may pay to be positioned for both outcomes as @Anton Chigurh alluded to in a recent post.
"think it has to be "sell the rally" on a momentum basis but it also seems to be the strong consensus. This is why I'd rather continue to hold some stocks and hedge systemic risk, rather than taking what little liquidity I can get and being all out. There's still stocks going up every week, even if breadth isn't there."
(20min delay)
