PPCC: Pisitófilos Creditófagos. Primavera 2025

[sudden and sharp]

No. Los pobres se enteran ahora de que nunca fueron ricos. [Alguno acertó, claro, por casualidad.]

Si, pero dos cosas.
La primera, es que lo eran desde el punto de vista económico y social (consumo elevado, debt propelled economy)... y aun lo son, por ejemplo via alquiler, turidmo, etc, rompiendo el contrato social (meritocracia etc) , y también desde el punto de vista jurídico (lo mas grave) que es lo que Asustadísimos omite, porque pagaban impuestos como tal y por eso las haciendas NO van a hacer nada por la corrección valorativa.
Y esto nos lleva al punto dos:
Los gobiernos van a evitar por todos los medios los mecanismos automáticos de corrección, de tal forma que el "valor de catálogo" se mantenga lo mas arriba posible durante el máximo de tiempo posible.
Y eso desde el capitalismo.
Ahora imaginate desde el socialismo magico centralizado.

Van a engañar dos veces s todos con el mismo truco.

Os perdeis en los -ismos...

Ningun régimen se ha podido sostener en la historia sin el apoyo de una mayoría suficiente que le sujete en la cúspide. Por eso los egipcios construían pirámides, para dejarlo bien clarito.

Las mayorias los -ismos se los pasan por el forro-de-ahí-abajo. Para ellos es solo un constructo narrativo-literario que les da cobertura intelectual para callar la boca a los que "sacan" su dinero extra.

Por poner un ejemplo histórico que todos conocemos, el naz-ismo no inventó el antisemitiemo en Europa. Ellos solo se ofrecieron voluntarios para ocupar los cargos administrativos y dar cobertura legal a sus votantes para que se lanzaran a robar a los judios. ¿que se pasaron de frenada? Pues si. Quizá ni ellos mismos pretendían llegar tan lejos cuando empezaron con el naz-ismo, pero robar al vecino y "sacarte" un dinero extra es muy goloso.

El socialismo magico centralizado llegará cuando la narrativa popularcapitalista ya no de más de si, y toque buscar otra para que las mayorías sigan "sacando" su dinero extra.

Un ejemplo de como los personajillos a los mandos de las administraciones públicas tienen claro quién tiene El Poder:

INTERVENCIÓN DEL PRESIDENTE DEL GOBIERNO, PEDRO SÁNCHEZ

https://www.lamoncloa.gob.es/presidente/intervenciones/Paginas/2025/20250113-acto-vivienda.aspx

...Y porque dos tercios de las viviendas en alquiler residencial que hay hoy en nuestro país pertenecen a pequeños propietarios, a gente de clase media trabajadora, que ha trabajado mucho para poder pagarlas y obtener un dinero extra de ellas.

No. Para estamos nosotros. Los foros, en general.




Alguien tiene que hacer la prueba... Por eso no vale nada "centralizado".

El futuro es en Red. 




-----
...la prueba del algodón.

[asustadísimos]

[Sabemos que Palomera no cuestiona ahora los ladrillos como riqueza. Pero es lo que toca en la faena. Estamos aún en el tercio de banderillas. Ya llegará tácticamente que los ladrillos son pobreza.

Los ajustes valorativos a la baja consumen en sí poco tiempo, pero sus efectos duran una eternidad. La caída abrupta minimiza el número de transacciones, ahorrando recursos. Así, el nuevo nivel de precios gana tiempo y margen para madurar. Hace falta ser muy muy rico para aguantar mucho tiempo cayendo. Hay burbujas de ricos y burbujas de pobres.

Además el capitalismo es brutal por propia naturaleza, lo que significa que a la gente no le sorprende que todo pase de la noche a la mañana..

Es como cuando te pones a perder peso. Primero, plan de choque.

En España, no hay financiación para aguantar nada, y de tiempo, menos aún. Hidalguía de caldo claro.

El anglo está jugando a que aguanta más que tú. Pero la economía de EE. UU. no es tan poderosa como parece. Es un tigre de papel. El anglo es un imperio crematocrático... impresora y poco más. Es dólar y cocacola. Aviones y tanques que no le duran ni segundos a Shukoi, a oreshnik. Ahora, además, las humillaciones DeepSeek y SpaceX. Su milicia está solo para liarla, no para ganar nada. La guerra de Ucrania, que es 'de desgaste', 'de atrición', ha revelado que tiene poco aguante en el campo de batalla a poco que se organice el enemigo. Y ahora andan disimulando, echándole la culpa a lo woke, yendo de poli bueno, de falso mediador con toque de loco atrabiliario.

La superación del sabotaje de Nord Stream revelará que este poco aguante también lo es respecto de la economía alemana, motor de la UE, que recordemos que es una economía republicana mixta 'Federal-Democrática'. La economía de la UE es mejor de lo que se cree en la misma proporción en la que se cree lo buena que sería hipotéticamente la de EE. UU.

España, sin la UE y sin el euro en particular, estaría muerta. El euroescepticismo y la eurofobia prodólar son frontalmente contrarios a nuestros intereses como Nación. Parece mentira que tengamos que escribirlo. Esta es la esencia de la fractura irreconciliable que está habiendo en la derecha española entre angloidentificados y españolistas. Y este, también, es un fenómeno general de la UE que explica cosas como la neutralización de Weidel, Le Pen y Ayuso, o la reciente traición de Meloni al imperio anglo.

Esto va a deprisísima.

¿Era o era en 2025? Le hago la pregunta especialmente a los gradualistas de este impagable blog, que siempre acierta con las previsiones no solo 'grosso modo', sino ¡¡¡con las fechas!!! Da hasta miedo.]

[asustadísimos]

['Dinero extra' es lo que se saca trapicheando con drogas después de salir de la oficina, ¿no?]

[tomasjos]

Entendemos por ahorro el ahorro del pobre.
En este foro es eso. Siempre lo ha sido.
La corrección valorativa implica destrucción del ahorro -del pobre-.

La bola esta ahi para el que quiera rematarla.
(Pero nadie lo hará).

Venga, va, lo hago yo
¿Corralito? ¿Inflación de dos dígitos mensual? ¿Las dos?

Porque el pisito " no me lo toques"

Es que no falla.... siempre es lo contrario de la que diga Tomasjos.

El pisito es el ahorro del pobre. La destrucción valorativa del ahorro del pobre es que el pisito ha muerto. Los pobres pierden? No. Los pobres se enteran ahora de que nunca fueron ricos. [Alguno acertó, claro, por casualidad.]

Sudden, la referencia al pisito iba porque la resistencia de los propietarios a qué sus viviendas bajen de precio es numantina - se lo han jugado todo ahi-. Habia un punto de sarcasmo en ello.

Respecto a lo de Ucrania, estoy convencido de que es usted quien se equivoca, y que el planteamiento de Hungtinton - que no me lo he inventado yo- de la división en zonas de influencia basadas en lo cultural es el que va a triunfar, y eso pasa por el Dniéper y Transnistria como frontera entre Rusia y la UE - los rusinos de Lvov se los queda la UE-.

De todos modos a esta película de Ucrania le queda poco, o eso parece, y ahí veremos quién tenía razón.

@Tomasjos
¿Qué Huntington? Si se unen acreedor y deudor se soluciona el problema. La Unión es la solución.

@AlosDemás
Veis cómo se cumple la regla.   

Samuel P. Hungtinton, Sudden. Choque de Civilizaciones, 1993 creo

Aquí no hay unión de acreedor y deudor, en tanto en cuanto unión política. Aquí hay o habrá un espacio de interrelación económica común de Lisboa a Vladivostok - si eso le vale como unión acreedor deudor por mi sin problemas, de hecho para el Kremlin tampoco lo hay por lo que ha dicho sobre la entrada de lo que quede de Ucrania en la UE- pero dejando claras las fronteras políticas y las zonas de influencia, y lo que es más importante, que Europa es un apéndice del continente euroasiático y no - ya no- su cabeza pensante o su núcleo hegemónico, como lo quiera expresar.

Y por supuesto, la Angloesfera fuera de Eurasia - no considero a los británicos Eurasia-. Disiento de quien diga que Canadá se irá con la UE. La geografía y la cultura se impondrá, y Canada - con Puerto Rico, Groenlandia y Quebec como estados libres asociados - y los Estados Unidos formaran una unidad política, y con GB, Australia y NZ volando en estrecha formación con ellos, quizás en plan Comunidad Económica Anglosajona

[Derby]

REALITY CHECK: Here’s the #1 problem with Trump’s tariffs

“The U.S. financial system is now so parasitic that it’s not going to allow Mr. Trump’s plan to work.” — legendary South Korean economist Ha-Joon Chang.

REALITY CHECK: Here’s the #1 problem with Trump’s tariffs

[asustadísimos]

[«Cuando las ranas críen pelo», es decir, «de a corto plazo, nada, monada» es lo que dicen los violadores de derechos, ¿no?]

[asustadísimos]

SACAR & SÍ, PERO AHORA NO.—

Qué mal andan cuando el poder político hace como que los ampara con dos argumentitos que en realidad son condenas (porque se trata de un bien básico de consumo obligatorio que hace vulnerable a la Nación):
• «sacar dinero extra» y
• «sí será, pero a medio o largo plazo».

Lo de sacar dinero extra es una chuminada. No merece la pena dedicarle ni un segundo.

Yo lo que quiero es que los gradualistas que escriben aquí expongan sus porqués.

¿Cuándo ha sido gradual el desmontaje de una e-s-t-a-f-a?

Pero, yendo más allá, ¿cuándo ha sido gradual una corrección valorativa fea en el capitalismo? Solo quiero que digan un solo ejemplo, uno solo. Siempre se aguanta sin financiación el máximo de tiempo posible con buenísimas palabras (como «sacar dinero extra» o «a corto plazo, no») y, de un día para otro, la quiebra, el 'crash' (en inglés no se dice 'crack' —que me corrija Derby—).

[Derby]

https://www.bloomberg.com/news/articles/2025-04-05/musk-hopes-us-europe-will-move-to-zero-tariff-free-trade-zone

Musk Hopes US, Europe Will Move to Zero-Tariff Free-Trade Zone


Elon Musk Photographer: Jamie Kelter Davis/Bloomberg

Elon Musk hopes for a “zero-tariff” system between the US and Europe that would effectively create “a free trade zone,” he told attendees of a League event in Italy, days after levies set by US President Donald Trump sent global markets into a tailspin.

“Both Europe and the United States should move, ideally, in my view, to a zero-tariff situation,” Musk told Italian Deputy Prime Minister Matteo Salvini on Saturday. “That’s what I hope occurs.”

Trump on Wednesday announced a 20% tariff on goods entering the US from the European Union as part of a global slate of trade levies. The bloc has said it would prefer to negotiate a settlement but is prepared to retaliate with countermeasures if needed, including with its own tariffs, taxing services and targeting American tech firms.

[asustadísimos]

[En...
https://vkvideo.ru/video-228615475_456239152
... hay una cosa que ya ha salido aquí: la política comercial proteccionista de verdad es silenciosa. Cuando hay una debilidad interior puntual, para corregirla, un día se modifica un poco la partida arancelaria correspondiente y otro día, un poco más. Cuando se hace un alarde como el actual es que no estamos ante política comercial.

No obstante, el vídeo incurre en el doble error de no querer ver la esencia monetario-cambiaria de la decisión y de imputar la medida al personaje no a la coyuntura, la estructura y el sistema.

No solo no estamos ante política comercial, sino que además se quiere que haya un antes y un después, es decir, se quiere que haya susto. No se quiere negociar nada. Es un «truco o trato» en el que se quiere truco. Y algo me dice que va a fracasar, precisamente, por la inmensidad de intereses creados que hay. Pero, no se preocupen, ya saben que un servidor dice que estamos en la muerte del sistema capitalista tal cual y que lo que viene es un sistema socialista-de-derecha distópico «con características» capitalistas. Viene la cárcel de la mara salvatrucha. Viene 'Nineteen Eighty-Four'. Vienen Matrix y Mad Max mezclados. El 'fight, fight, fight' y el ademán del brazo en alto son señales. Cómo ha sido humillado el pelele (desamparo) y cómo ha sido la fetua arancelaria (suelta del nuevo modelo), también.

Esto va deprisísima. Y la verdad es que engancha.]

[Cadavre Exquis]

https://x.com/KobeissiLetter/status/1908256430118875174

Saludos.

[Derby]

Sería crash, sí. Un desplome súbito y abrupto...

https://www.businessinsider.com/stock-market-crash-recession-outlook-trump-tariffs-sp500-wall-street-2025-4

'The bull market is dead': What investing pros are saying after a historic 2-day stock market crash

[Derby]

https://www.ft.com/content/3436cd20-f09f-46dd-9e94-ba10b86de83f

How to make sense of Donald Trump’s tariffs, Gillian Tett

The new field of ‘geoeconomics’ offers a guide for the perplexed


© Efi Chalikopoulou

How can investors parse Donald Trump’s policymaking? That is a burning question right now, as markets tumble after the US president announced tariffs on Wednesday that exceed even those of the protectionist 1930s.

Viewed through the lens of mainstream 20th-century economic thinking — be it that of John Maynard Keynes or free-marketeers like Milton Friedman — such tariffs seem strangely self-sabotaging. Indeed, the so-called liberation day declared by Trump smacks of such economic lunacy that it might seem better explained by psychologists than economists.

However, I would argue that there is one economist whose work is very relevant in this moment: Albert Hirschman, author of a striking book published in 1945, National Power and the Structure of Foreign Trade.

In recent decades, this work has gone largely ignored, as Jeremy Adelman, a Princeton historian who wrote Hirschman’s biography, points out. No wonder. The German Jewish economist suffered such trauma in the Spanish civil war and Nazi Germany that when he arrived at the University of California, Berkeley, as an economist, he decided to study autarky.

More specifically, he used the disastrous protectionism of the 1930s to develop a framework for measuring economic coercion and the exercise of hegemonic power (the academic word for bullying). However, this analysis was largely ignored by trade economists, since it ran counter to both Keynesian and neoliberal economic ideas.

Instead, the book’s main impact was on antitrust analysis. The economist Orris Herfindahl later used Hirschman’s ideas to create an index measuring corporate concentration, which was adopted by the US Department of Justice, among others.

However, if Hirschman had been alive to watch Trump unveil his tariff strategy in the White House Rose Garden this week, he would not have been surprised. Neoliberal thinkers often see politics as a derivative of economics. But Hirschman viewed this in reverse, arguing that “so long as a sovereign nation can interrupt trade with any country at its own will, the contest for more national power permeates trade relations”.

And he viewed “commerce as . . . a model of imperialism which did not require ‘conquest’ to subordinate weaker trading partners”, as Adelman says. This is close to how the Trump advisers parse economics. But it is very different from how Adam Smith or David Ricardo saw trade flows (which they assumed involved comparably powerful players).

Some economists are leaning into this shift. Just after Trump spoke, a trio of American economists — Christopher Clayton, Matteo Maggiori and Jesse Schreger —  released a paper outlining the growing field of “geoeconomics”, inspired by Hirschman.

When the trio first started this research agenda, four long years ago, “hardly anyone seemed interested” in the ideas, since they were so at odds with the current frameworks, admits Maggiori. But interest is now surging, he says, predicting a looming intellectual shift comparable to that which took place after the global financial crisis. This year’s American Finance Association meeting, for instance, featured a novel session on geoeconomics, where Maurice Obstfeld, former chief economist of the IMF (and fan of Hirschman), delivered a forceful speech.

This work has already produced three themes that investors should pay attention to. First, and most obviously, the trio’s analysis shows that it is dangerous for small countries to become too dependent on any large trading partner, and they offer tools to measure such vulnerability.

Second, they argue that the source of America’s hegemonic power today is not manufacturing (since China controls key supply chains) but is instead financial and structured around the dollar-based system.

Trump’s tariffs, therefore, are essentially an attempt to challenge another hegemon (China), but his policies around finance are an effort to defend existing dominance. (The hegemony in technological power, I would argue, is still contested.) This distinction matters for other countries trying to respond.

Third, the trio argue that hegemonic power does not work in a symmetrical manner. If a bully has an 80 per cent market share, say, it usually has 100 per cent control; but if market share slips to 70 per cent, hegemonic power crumbles faster, since weaklings can see alternatives.

This explains why the US has failed to control Russia via financial sanctions. And the pattern may play out more widely if other countries react to Trump’s aggressive tariffs by imagining and developing alternatives to the dollar-based financial system. Bullies seem impregnable — until they are not.

Is this analysis depressing? Yes. But it shouldn’t be ignored. And if shocked investors and policymakers want to cheer themselves up, they might note something else: against all the odds, Hirschman was a life-long optimist — or “possibilist”, as he preferred to say. He thought that humans could learn from history to improve the future.

Trump is ignoring that lesson now, with grim consequences. But nobody else should.

[tomasjos]

[....Pero, no se preocupen, ya saben que un servidor dice que estamos en la muerte del sistema capitalista tal cual y que lo que viene es un sistema socialista-de-derecha distópico «con características» capitalistas. Viene la cárcel de la mara salvatrucha. Viene 'Nineteen Eighty-Four'. Vienen Matrix y Mad Max mezclados. El 'fight, fight, fight' y el ademán del brazo en alto son señales. Cómo ha sido humillado el pelele (desamparo) y cómo ha sido la fetua arancelaria (suelta del nuevo modelo), también.

Esto va deprisísima. Y la verdad es que engancha.]

Y da mucho miedo, Asustadísimos, porque esos regímenes que usted comenta son dictaduras que matan a la gente. A mí no me engancha nada, la verdad, más bien me impulsa a salir corriendo.

[Derby]

https://finance.yahoo.com/news/trump-tariffs-tip-america-recession-153226930.html

Trump’s tariffs will tip America into recession, warns JP Morgan

Donald Trump’s tariffs will tip the world’s largest economy into recession, America’s biggest investment bank has warned.

Investment bank JP Morgan has torn up its growth forecasts for the US, after global stocks tumbled and wiped more than $5 trillion (£3.8 trillion) off America’s most valuable companies in only two days.

The investment bank downgraded US growth by 1.6 percentage points for this year, while predicting far higher unemployment that could leave nearly 2m additional Americans jobless.

Michael Feroli, JP Morgan’s chief US economist, said: “We now expect real GDP to contract under the weight of the tariffs. For the full year, we now look for real growth of -0.3pc, down from 1.3pc previously.”

The bank’s warning came as America’s baseline 10pc levies on almost all countries, including Britain, took effect.

Other investors said the trade war ignited by the White House on April 2 threatened to plunge Britain’s debt-bloated economy into a Greek-style debt crisis.

It followed China imposing its own retaliatory tariffs of 34pc on all US imports on Friday, as the world’s two largest economies squared off.

Markets also took fright as Mr Trump vowed his policies would “never change” and “only the weak” would fail as the sell-off deepened.

Meanwhile Britain’s weaker economy coupled with the Treasury’s razor-thin headroom leaves the UK exposed to a “negative spiral” similar to Greece’s debt meltdown a decade ago, according to one of the world’s biggest investment firms.

Neil Robson, the head of global equities at Columbia Threadneedle, said Britain’s £2.8 trillion debt pile, which nearly outstrips the size of the economy, leaves it vulnerable as Mr Trump’s tariffs increase the risk of a global recession.

Mr Robson said: “We have had a Liz Truss moment here in the UK. Could we have a Labour version of that? Possibly. I think it’s quite likely.”

He said Britain’s current financial situation mirrored the lead-up to the eurozone meltdown, when bond markets turned aggressively against Greece when investors suddenly realised the country could not balance its books.

He said: “If you think about the problem of being very indebted, you can be as indebted as you like as long as your nominal growth is higher than your interest rate.

“But if ever your nominal GDP growth stalls – not just on a temporary basis – below your interest costs then you’re in a real negative spiral and it can move really quickly. We saw that with Greece during the great financial crisis.”

Rachel Reeves, the Chancellor, had banked on faster economic growth to offset Britain’s rising debt bill over the next five years, but an expected economic slump from the US president’s trade war has left that plan in tatters.

Mr Trump slapped a flat 10pc tariff on all nations, rising to as high as 50pc for the worst off.

Although Britain escaped with the flat 10pc rate, its exposure to the global economy means growth forecasts are likely to be pared back and could trigger a crisis for UK debt, known as gilts, which are bought and sold by global investors.

‘Double blow’ for Britain

Bruno Schneller, the managing partner at Erlen Capital Management, warned that the bond markets could turn against the UK if investors lose faith in Ms Reeves’s economic plan.

“Mr Trump’s tariff blitz risks triggering a global stagflation shock – and for the UK, that’s a recipe for a gilt crisis,” he said.

“Slower growth, higher inflation and a jittery investor base could combine to push UK borrowing costs higher at the worst possible time. This isn’t just trade war fallout, it’s the kind of external shock that can crack already fragile debt markets.”

He added: “Trump’s tariffs could deal a double blow to the UK – stalling global growth while fuelling inflation. That’s a nightmare for any Chancellor trying to stabilise debt. If markets lose confidence in the UK’s fiscal path, a gilt sell-off isn’t just possible – it’s probable.”

It follows a dramatic week for the global economy after the scale of Mr Trump’s tariffs blitz caught markets by surprise.

The turmoil also prompted JP Morgan to raise the risk of global recession this year to 60pc from 40pc, as investor panic rattled stock markets around the world.

Although UK gilts have been boosted so far by Mr Trump’s tariffs, investors have warned this could soon change.

“If Trump doesn’t course-correct, this crisis will affect many different areas in global markets,” said Harald Berlinicke, a partner at Sarnia Asset Management.

Risk of more tax rises

The gloomy message comes shortly after the Chancellor slashed welfare benefits to restore £9.9bn of fiscal headroom at the Spring Statement.The Office for Budget Responsibility warned that in a worst-case scenario, a full-blown trade war risked wiping out all of the margin of error she had left herself against her fiscal rules.


This means that after a record £40bn tax-raising Budget in October, Ms Reeves may be forced to come back for more tax increases in her autumn Budget.

Mr Trump has vowed to persist with his aggressive tariffs despite last week’s market bloodbath, insisting “it’s going very well” and that the economy is “healing”.

The turmoil would be “something we are going to remember for a very long time”, Mr Robson said.

“Risks of recession have clearly gone up. I don’t see why there won’t be a recession at the moment. It’s difficult to see what the solution is unless America walks back on this,” he said.

Some of the world’s most important financial leaders have warned Mr Trump that his aggressive trade policies will wreak havoc by depressing growth and fuelling inflation.

Jerome Powell, the chairman of the US Federal Reserve, said on Friday that the president’s tariff increases were “significantly larger than expected” and so the same would “likely be true of the economic effects”.

Kristalina Georgieva, the chief of the International Monetary Fund, also warned: “Tariff measures clearly represent a significant risk to the global outlook at a time of sluggish growth.”[/color]

[Derby]

https://seekingalpha.com/article/4772720-the-reason-we-are-likely-in-a-crash

The Reason We Are Likely In A Crash

Summary

*The current market downturn appears to be a crash, not a correction, making it unwise to buy SPY and QQQ at this moment.

*Tariffs and potential trade wars, particularly with China, could lead to stagflation, combining high inflation with low GDP growth.

*Technical indicators show blue-chip stocks in a bear market and SPY/QQQ trading below their 200-day moving averages, signaling higher volatility.

*Valuations are still high, with the Buffett indicator showing US stock market valuation at nearly twice the US GDP, suggesting more downside potential.


sefa ozel

Introduction

One of the most important assessments to make when the market falls by 10% is whether we are in a correction or a crash. If we are in a correction, it makes sense to use all your cash to buy the dip. However, investors should keep up their cash reserves to buy at far lower prices if we are in a crash. This article will show why I believe this might be a crash and why you should not buy SPDR S&P 500 ETF Trust (NYSEARCA:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ) at the moment.

Macro Environment

One of the most talked about macro themes at the moment is tariffs. With President Trump's announcement of retaliatory tariffs against almost all countries on “liberation day”, he might have started new trade wars and fueled others such as the one against China. While an optimistic scenario would be for others to slash their tariffs in the hopes that the US will do the same, it is rather likely that countries will enhance trading volumes with everyone but the US. Europe, for example, could simply buy more products from China and get energy from Canada. This might lead to an economic downturn in the US. Interestingly, one of the biggest reasons for the Great Depression of 1929 was the US government's decision to enhance tariffs. However, the biggest concern about tariffs is inflation. While Jerome Powell claims that this inflation would be transitory (we heard that before…), it is likely to stay should other countries not bow to Trump's pressure. Combined, there is a clear stagflationary scenario where tariffs increase inflation while less trade decreases GDP growth.

Another factor is the delinquency rates shown in Figure 1. As can be seen, they are currently higher than they were in 2008, which is alarming. However, while rates came down quickly in 2008, the FED might not be able to do the same at the moment due to the still-elevated inflation and the possible inflationary effect of tariffs. This also shows that the negative effects of interest rate hikes sometimes appear much later. As an example, the FED already stopped raising rates at the end of 2005. Nevertheless, the real damaging effects on the economy through the housing market were only seen at the end of 2007.


Freddy Mac Serious Delinquency Rates
Figure 1 - Freddy Mac Serious Delinquency Rates (Bloomberg)

Technicals

Figure 2 shows the performance of the Magnificent Seven until the end of March this year. As can be seen, they are down more than 20%, already entering a bear market. This is overall a common theme that blue-chip stocks are the first ones to crash, dragging all the other stocks with them. Even if a crash would primarily be caused by a decline in the mag-7, indices are vulnerable as they have those stocks overweight by a lot.

Additionally, both SPY and QQQ are currently trading below their 200d simple moving averages. This, in general, signals lower returns and higher volatility. Further on, as Figure 3 shows, the risk of recessions is far higher under this indicator.


Performance of Magnificient Seven
Figure 2 - Performance of Magnificent Seven (Financial Times)


Recession Chance Above and Below the 200d Moving Average
Figure 3 - Recession Chance Above and Below the 200d Moving Average (Michael Gayed - Leverage For The Long Run)

Valuation

A last point to consider is valuation or the question: “Have stocks already come down enough ?”. To answer this, let's look at the Buffett indicator in Figure 4. As can be seen, the US stock market valuation trades at almost twice the value of US GDP. Even when taking an exponential trend line, this is still more than 2 standard deviations away from the mean, showing that there might be more to come. Figure 5 also shows the spread between the yield of BBB-rated bonds and treasuries. As can be seen, the spread is historically low, suggesting that the market is not pricing in any trouble at the moment.


Buffet Indicator
Figure 4 - Buffett Indicator (Longtermtrends)


Yield Spread Between BBB Rated Bonds and Treasuries
Figure 5 - Yield Spread Between BBB Rated Bonds and Treasuries (Longtermtrends)

Conclusion

All of this leads to the conclusion that there are still severe risks in the market that are not accurately priced in. In contrast to a correction that is normally based on nothing fundamental, the current downturn might be based on the negative effects of interest rates, the risk of a new financial crisis, and the FED being unable to act due to Trump's trade policies. Furthermore, the crash might signal the end of the heavy premiums on US stocks as countries will decrease their trading with the US.