I'd also argue that the overall lack of healthy corrections during the QE era (say post 2011 and the Euro debt crisis) has a good deal to do with this. 2016 was a good correction, but Yellen then choked when she should have continued with the normalization of rates. Hence, we got this vertical ramp in a lot of individual names and to a lesser extent the indicies.
I second this. In my social circle there's now several market wizards and geniuses who's basically only been long equities for this entire bull market and happened to do their first trading ever around 2010. They felt very confident after the first drop in October and laughed at me when I suggested it was time to hedge their portfolio. Being long-only investors who's never experienced a correction or a bear market it seemed like they didn't even entertain the possibillity of this scenario. They're no longer laughing and even seem a bit worried.
i don't think it's so much that there's something ominous lurking in the shadows that hasn't shown its face yet like 2008. if we didn't have stupid president nagging like a child about how the Fed is ruining his economy (which he is still doing today on twitter btw...) and all the other reckless things he's done like tariffs, shutting down gov't over a fucking wall, pulling out of syria then firing Mattis 2 months early out of spite b/c he got his feelings hurt over a letter....etc., the swings wouldn't be as wild as they have been lately. think about how dysfunctional the US gov't is right now. we have no secretary of defense, no attorney general, no chief of staff with Trump currently wanting to fire the Fed Chair. the sec def replacement nominee is a military industrial complex corporate shill with no military experience at all which decreases confidence in the US's ability to bring order around the world. the mnuchin stunt today only fanned the flames that trump ignited. just enjoy the shitshow. the volatility those idiots are creating with their stupid actions only benefits us traders. it's pretty much a trader's paradise right now, esp as a futures trader. and there's no reason to feel bad shorting the US economy. the people most affected by a tanking economy here in the states are the people who voted for trump, esp the farmers with the whole soybean debacle going on right now with china. what goes around, comes around. just enjoy the show with trump supporters scrambling around like chickens with their heads cut off while we line our pockets. a democracy only works efficiently when the populace is well-educated. the US has some of the smartest ppl in the world but as a whole, americans are some of the dumbest in the world of developed countries. the electoral college will assure that the dumbest subset of our people will continue to have outsized represention, which will assure that we will continue to get black swan results like the one we're seeing right now. so what you're seeing right now is just a symptom of something that was a long time coming.
Let's say you didn't buy stocks around Dow 15,000 and missed that entire run of over 10,000 points to the upside, well guess what you may just have that opportunity soon as the markets will continue to drop...wait till unemployment numbers tick above 5-6% and gdp starts to drop quarter over quarter, you'll be able to pick stocks half off of what they are today.....this is what happens when you don't allow free markets to do what they are supposed to do....10 years long in the making and everyone thought it could continue, it's over. Bull market is done. New highs aren't coming for many years. Don't believe this is another blip in this bull market, it's not. This downward cycle will continue...yes will have mega rallies along the way that will convince you that the market is back but in reality it will be all a fake.. .if the markets do an about face and jump 8%-9%-10% in the first month of the new year it will be just another opportunity to add a plethora of short positions....
It's funny. Now every article on cnbc is more bearish than the next...a few months ago everyone thought s$p 3000, there was even a guy who predicted a 12% rally into the end of the year....that was a really funny joke....now the tide has shifted and everyone is calling for a bear market along with recession...completely amusing.....
I mean don't we usually have a recession when the fed raises interest rates? (albeit still low but we are coming off a practically negative interest rate era) Not sure why people are so surprised to see a bear just soon after fed pulls the plug.
Yeah at the rate of 25 basis points. I should have phrased that better, after Fed pulls the plug 'very slowly.' The way I see it, interest rate "JUST" hit about 0 (fed fund rate adjusted for inflation). https://fred.stlouisfed.org/graph/?g=6TK