Economist david rosenberg predicts that the s p 500 will crash a further 17 and says we're currently reliving the summer of 2008.. The s p 500 will crash a further 17 to 3 300 as stocks enter a prolonged bear market. That's comparable to the run-up of 2008 financial crisis. I feel like i'm reliving the summer of 2008..

Where was i in the summer of 2008.? I guess i was going into ninth grade, maybe eighth grade. Maybe i was going into high school, something like that. So, probably not the most ideal summer. For me either the stock market is following a familiar pattern of a recessionary bear market by late tooth by excuse me by late may of 2008 before the extent of the problems of the subprime lending market were apparent.

The s p 500 had narrowly averted following into a bear market having dropped by 17 at one point from the previous october's record high before recovering. So that's what they're talking about the similarities, i mean we had a nice movement up to november and granted. We did hit an all-time high in january, so it's not like the exact same month, but there's you're, never gon na have a perfect repeat of history and in the market. The saying is, history doesn't repeat, but it often rhymes and that's kind of what they're alluding to here, having dropped 17 at one point from october, but it wasn't long before the market went into a near free fall, dropping a 40 by the end of the year.

So will this particular downturn, which i do think we are going further down this year, like i think we have more pain before things get better in the short term, i'm still leaning a little bit bullish just because of gamma related stuff in the options market, but Overall, have we seen the low of 2022? I would argue we have not. I want to be very very clear of that. I think we have to endure more pain, but i don't think that this sell-off is actually going to be fueled by the housing market whatsoever. Right now, the housing market real estate is still pretty strong.

I know some people are trying to say: okay 2008, we sold off, we knew that was housing. If you look at the data related to housing, it's a very different world right now, relative to 2008.. I think this sell-off is more of the fed is doing what it can to hamper demand they're, making capital more expensive with capital being more expensive. It makes business growth more difficult and, as we see continuations in earnings announcements such as snap but then apply that to some of the biggest companies, i think rightfully so the market just got a little bit too hot and it's necessary to take a breather.

Many economists have argued that the fed's pandemic stimulus package contributed to unrealistic stock market valuations and at their decision to start hiking interest rate risk leading to a crash. Rosenberg echoed those concerns and criticized fed chair jerome powell, whom he said myopically focused on job openings. A very soft data point so basically not focusing on the full picture and said maybe the fed came in a little bit too heavy-handed with their qe quantitative easing to get us through the pandemic and now to undo that situation. Maybe it's not enough a little bit too late.

An agreement with rosenberg is jamie. Dimon, the ceo of jp morgan diamond, says the fed's bond buying pullback is an unprecedented headwind for markets and no one know what its effects will be and his reasoning is basically we've. Never tried to unwind nine trillion dollars before. So it's not really like.

There's a game plan for this. Yes, the fed is pitching us that they're gon na do a soft landing. Don't worry we're going to do this amount of balance sheet normalization we're going to start on june 1st, then we're going to in september really get into the world of 95 billion and hey it's going to take three years, but we're not really that far behind the Curve, that's the rhetoric we hear from the fed, there's no playbook! I want to make this explicitly clear, unwinding a 9 trillion dollar quantitative easing package has never been done before so they're doing. I suppose what they can but to be that confident in it one way or another of like.

Yes, it's going to work or yes, it's 100 gon na fail, it's a giant unknown and remember the market does not like unknowns. Jamie dimon has said the federal reserve's plan to reduce its bond holdings is countervailing force against the economy, the likes of which investors have never seen before and added that the effects of it are anyone's guess. So me a stupid streamer him, the president of one of the largest banks on the entire planet, we're in the same boat. No one knows what's gon na happen, the next day in the market.

You don't need a fancy pedigree on your wall and you don't need a fancy monkey or a duck we're on the same fucked boat of i don't know like just shrug your shoulders and say i don't know what the hell is going to happen next. No one knows what's going to happen next, the u.s economy remains strong, thanks in large part to consumer savings, built up as activity was restricted during the rona era. That's actually one of the reasons as well that real estate is particularly strong right now, even though real estate's high in price super super elevated. The amount of saved money on average per household is actually close to a record level, but that strong economy is being met by two countervailing forces, both of which we've never seen before.

High inflation and qt, also known as quantitative tightening, which is the opposite of quantitative. Easing and it's them trying to undo the 9 trillion once again. This will start on june 1st and they're, going kind of like at half force for the first three months and then in september, they're gon na notch. It all the way up to full force and then we're gon na ride it out, ideally for three years and see how that all goes.

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