The nex big fall is coming , here are the reasons why ?
global interest rates have remained low for a long long time !
global debt is astronomically high !
debt related instruments , and derivatives market is gigantic , some estimates at > 1 quadrillion !! Whoa , we may not no the actual number and it depends on the valuation method . Derivatives are major problem , as Whale street bankers have flooded the markets with derivative related products so much that before the gfc the market was valued at about $ 590 trillion !!! Now it's valued at over 1 quadrillion !!! FARK me dead !!!
the devil is in the derivative , here is a fact that will scare any investor ; global financial assets ( stocks , bonds , cash deposits etc ,ie the total market ) is valued at over $300 trillion and derivatives is almost 4 times as much , what does it mean ? Well , it means that derivatives which in essence gets its value from underlying assets , is way higher than those assets thereby creating a massive shortfall of sorts . Once the underlying markets takes a major blow like a GFC the derivatives market follows and hence the losses just multiply .
interest rates globally will have to be hiked at some point ... and other fixed income assets will become more attractive than shares , and a major correction will come !
last but not the least , geo political issues pose a bitch of a problem , war means many things to many people , and whale street needs a war so that markets collapse , billions are made as put options are excerised , and trillions lost by ordinary investors as we are always caught unprepared for such a disaster ! War is a business , and business will boom soon .
Any major collapse will cause a retirement gap that may cause extreme poverty for retirees on a global scale , the United States govt will be in danger of defaulting on its social security payments should this happen !
Thoughts? Image : google . 