|
|
|
|
|
|
by rqtwteye
1263 days ago
|
|
|
The exact timing is always tricky but I have seen the .COM bubble and the 2008 crash. In both it was pretty clear that the economy was in a huge speculative bubble that made no rational sense but the bubble was prolonged until there was no way forward anymore. The 2001 crash was bad, the 2008 crash worse and I think this one will be even bigger. We ran up huge deficits during good times, kept interest rates artificially low to keep things going. And most of the superstar businesses (unicorns) don't even know how to be a business that makes profits. |
|
|
Everything about this "boom" from 2012 on was, from a market perspective, about as artificial as you could get. At least the events leading up to the .COM and '08 crash there weren't central banks openly putting their thumbs on the scales by being an active market paticipant buying debt securities, the quality of that debt be damned, and making price discovery next to impossible.
The lesson investors took from '08 and certainly from 2020 was that the powers that be will gladly use moral hazard to protect asset prices. Profits are privatized and losses are socialized.