You might have wondered about the past ~400 days in the financial market, especially in the US and Europe. Numerous commentaries and opinions have been shared across business-related media regarding interest rates, inflation, oil prices, war, etc. Trust me; you are not alone! Even the most distinguished economic Nobel prize winners have yet to learn why the economic indicators are still stable with so many factors in place. You might have heard of the recent banking failure in the US and Switzerland and that the banking system is so strong that nothing similar to 2008 would happen. But you have yet to hear that this time is expected to be worse!!
Milad opinion: In the next 40 days, till the first week of May, we will see multiple failures in the financial system and corporates with weak management, and we will see the tight unemployment rate finally cracking up. But this will be just the beginning of many failures to come.
To explain this more clearly, in the past 15 years, we have seen a secular bull market that has pomped the asset prices to a level never seen before, leading to an everything bubble. As a result, we have seen the tech sector and related assets grow to an unsustainable level, and housing prices soar. But this fast growth has come to an end, and in the next 40 days, we will see a downfall of significant indexes to at least 30% to begin with, resulting in a tough landing.
The bases are as follows: The banking crisis of 1907 and 2008 indicate a massive downfall of 30% or more, starting shortly after banks' failures. As the Fed Chairman touched on in today's Q&A, the credit market is falling, starting from Credit Swiss, and will be tightened further. This could threaten the housing market, which is already unstable. The 1974, 2002, and 2008 crashes indicate that the final drop should occur here. The downfall for SP500 shows 30% to 41% drop in the next 40 days. A historical unemployment rate study indicates a sudden jump in the following two readings. The bond market inversion (10s-2s) and (10s-3months) indicate that the recession is very close. Analyst Sentiment Measure of earnings among US companies indicates an extreme reading is coming, which means a significant drop in earning expectations. Leading Economic Indicator (LEI) alarms for immediate recession. ISM New orders Leading also indicates an immediate recession.
What's next? You can see in recent weeks, the SEC has been questioning different comaniyas, cryptocurrency companies, and people. The regulation of the cryptocurrency market has begun, next is the takeover or liquidation of private banks in favor of the central bank. Then CBDC - FEDnow Starts in June-July.
P.S if this prediction comes true, there will be a storm in cryptocurrency, and a drop below 16 is possible, I just keep it in mind. And it will look something like this
Write your comments, send them to your friends, I really want to know your thoughts.
CBDC (Central Bank Digital Currency) is a digital version of the national currency issued by the central bank. CBDC can be used to supplement or replace cash.
CBDC can have several advantages over cash, such as:
-Security: CBDC may be a safer option because it can provide better protection against counterfeiting and fraud than cash.
-Efficiency: CBDC can be a more efficient way to pay and transfer money because it can be faster and cheaper than paper money and wire transfers.
- Accessibility: CBDC can be a more accessible way for everyone, including those who do not have a bank account or cannot access financial services.
- Monitoring: CBDC can provide more accurate monitoring of cash flows and better compliance with rules and regulations.
- Cost reduction: CBDC can reduce the cost of printing, distributing, and storing cash.
However, CBDC can also cause some risks and challenges, such as:
- Loss of privacy: CBDC can provide the central bank with more information about cash flows and transactions, which can lead to privacy breaches.
- Risk of cyberattacks: Digital currencies are susceptible to cyberattacks, which could lead to loss of funds and security breaches.
- Risk of data breaches: CBDCs can run the risk of leaking users' personal data, which can lead to serious consequences.
- Implementation complexity: Implementing CBDCs can be a complex and costly process, which can make the transition from cash to digital currencies difficult.
Conclusion:
CBDCs can have many benefits, but can also lead to some challenges and risks. Some countries have already implemented CBDCs and others are considering future implementation.
Agree, had 2665 S&P marked in my chart for months.
Barrenbull
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Interesting. What would be a good hedge here? Short term bonds? Gold? Seems like this type of event could push everything down. What do you think? Thanks for the idea.
VAL_INVEST
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@MATURBO, buy money 😅
BonoboJoJo
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@MATURBO short or cash..
simplejoe1
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problem is there are so many millionaires/billionaires out there ready to buy every dip. huge amounts of cash made in past few years and propping up the markets
Tradersweekly
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The FED has been projecting recession since at least September 2022 (with its unemployment forecast for 2023 and 2024). Now, the reality is slowly sinking in.
illuminating_trade
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Bencosemans
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wrong...
Petrichor_
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I agree but (and sorry if this is obv to everyone else but me) … are you saying in the next 40 days or the next 440 days? I think you’re saying 40 but I triple check everything these days. Thanks again!
iaretheanimal
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It's already been proposed that the FDIC backstop all deposits for 2 years. That cry will gain rapid momentum and approval if there are any further runs on banks and that will stave off any major systemic problems. No sitting President, regardless of part, wants to be known as the one that let the banking system fall apart. Rest assured, there will be political favors traded left and right to keep the party going. In 2 years, rates will have lowered substantially and everyone will have forgotten there was ever a problem. Sometimes fear is worse than the actuality, this is an example of that.
Next concern will be banks that have large swathes of auto loans that will fall apart.