What goes up must come down....?
It's been a long run for the stock market. That last 12.4% dip correction was nothing compared to the growth correction that is actually due for the market.
With the economy being strong right now, if the market takes another correction, it will be a battle between the bulls and bears. However, could bad debt and the inevitable show their ugly heads once more? Wall Street has repeated it's old antics, but instead with securities products based on business short term funding. The same crooks that raked in all the cash in the mortgage industry just moved over to less restrictive business cash advance and short term lending and the debt has racked up to 2008 mortgage levels. Some banks/lenders are lending up to 3X a business' monthly or annual revenue, with few restrictions or regulations, while allowing other loans stacked underneath (Businesses can sometimes take out 2-3 loans at the same time under the radar). Sound familiar? It should. The hard money and second mortgage lending market before the recession should ring a bell. Except this time, 24% of the businesses borrowing the money are already defaulting across multiple loans. How long can the economy sustain this slack?? We will have to see.
Already, household debt is almost at the levels of 2008. Also, businesses in the U.S. have borrowed more in short term funding than their annual revenue can produce. Many of these banks are requiring real estate as collateral for these short term loans.
Trump must have a stimulus card up his sleeve to carry his term, or maybe a war with North Korea is just the right cloud cover to distract everyone from the real reason the U.S. economy could take a nose dive below sea level.
This is just my opinion. Having worked with mortgage and business lending professionals for a few years, I recently (2017) saw that the same type of market conditions were occurring as 2007-2008 and the same type of bad debt is stacking up in the U.S. Ethically it just seemed wrong to work in the short term business loan industry when I really figured out what it was doing to businesses in the long run. I resigned. When you do the math, some of the banks were charging 75-150% interest on short term business loans and taking real estate from defaulting businesses left and right. The default rate was high and it turns out the overall default rate in last quarter of 2016 was 24% across the board for all lenders with these types of loans.
Is our economy really sustainable without major government injection of stimulus, bailouts, and the continued printing of currency, inflation, and increased interest rates? Time will tell. Until another signal emerges, possibly another dip, I'm getting ready to short the market.
***This is not financial advice or a trade signal. Do your own analysis, don't invest more than you can afford to lose.
#DJI
With the economy being strong right now, if the market takes another correction, it will be a battle between the bulls and bears. However, could bad debt and the inevitable show their ugly heads once more? Wall Street has repeated it's old antics, but instead with securities products based on business short term funding. The same crooks that raked in all the cash in the mortgage industry just moved over to less restrictive business cash advance and short term lending and the debt has racked up to 2008 mortgage levels. Some banks/lenders are lending up to 3X a business' monthly or annual revenue, with few restrictions or regulations, while allowing other loans stacked underneath (Businesses can sometimes take out 2-3 loans at the same time under the radar). Sound familiar? It should. The hard money and second mortgage lending market before the recession should ring a bell. Except this time, 24% of the businesses borrowing the money are already defaulting across multiple loans. How long can the economy sustain this slack?? We will have to see.
Already, household debt is almost at the levels of 2008. Also, businesses in the U.S. have borrowed more in short term funding than their annual revenue can produce. Many of these banks are requiring real estate as collateral for these short term loans.
Trump must have a stimulus card up his sleeve to carry his term, or maybe a war with North Korea is just the right cloud cover to distract everyone from the real reason the U.S. economy could take a nose dive below sea level.
This is just my opinion. Having worked with mortgage and business lending professionals for a few years, I recently (2017) saw that the same type of market conditions were occurring as 2007-2008 and the same type of bad debt is stacking up in the U.S. Ethically it just seemed wrong to work in the short term business loan industry when I really figured out what it was doing to businesses in the long run. I resigned. When you do the math, some of the banks were charging 75-150% interest on short term business loans and taking real estate from defaulting businesses left and right. The default rate was high and it turns out the overall default rate in last quarter of 2016 was 24% across the board for all lenders with these types of loans.
Is our economy really sustainable without major government injection of stimulus, bailouts, and the continued printing of currency, inflation, and increased interest rates? Time will tell. Until another signal emerges, possibly another dip, I'm getting ready to short the market.
***This is not financial advice or a trade signal. Do your own analysis, don't invest more than you can afford to lose.
#DJI
Comment:
Are we going to close 1000 points down in one day since I posted this? There's a rumble on Wall Street. Slow rumbling thunder. The sort of rumbling that happens before a coming crash.
Comment:
Touching the 200 EMA isn't really a sign of a crash. I'm only throwing fodder to the bears. the 200 EMA touch was a long overdue correction.
Comment:
Still slowly moving down. :(
