Tech Crash Redux?
Flecks latest points out why he thinks, as we do, that this is a redux of 2000. Key quotes follow...
In a continuation of the Fed-is-done/no-news-period rally of about the last month -- I was struck by the rather large disconnect between the stock market and the economy.
The more I reflected, the more it occurred to me that we are seeing a replay of August 2000.
About a third of the banking system's $9.3 trillion of assets is in some form of real-estate loans. And, that doesn't begin to touch on the financial dark matter in the collateralized-debt and credit-default-swap markets.
To see tech stocks rally so hard in the last three weeks -- with even the data from the no-news period being weak on a bottoms-up (micro) level and ugly on a top-down (macro) level --
I can only conclude that the buying had been by beta chasers (and perhaps uncomfortable shorts), as the risk/reward for stocks in general and tech in particular hasn't been this poor since the fall of 2000.
What we have is a recipe for enormous financial losses. I believe the countdown into when we start to see more data points in the form of bombs should be measured in days, not weeks.
In a continuation of the Fed-is-done/no-news-period rally of about the last month -- I was struck by the rather large disconnect between the stock market and the economy.
The more I reflected, the more it occurred to me that we are seeing a replay of August 2000.
About a third of the banking system's $9.3 trillion of assets is in some form of real-estate loans. And, that doesn't begin to touch on the financial dark matter in the collateralized-debt and credit-default-swap markets.
To see tech stocks rally so hard in the last three weeks -- with even the data from the no-news period being weak on a bottoms-up (micro) level and ugly on a top-down (macro) level --
I can only conclude that the buying had been by beta chasers (and perhaps uncomfortable shorts), as the risk/reward for stocks in general and tech in particular hasn't been this poor since the fall of 2000.
What we have is a recipe for enormous financial losses. I believe the countdown into when we start to see more data points in the form of bombs should be measured in days, not weeks.
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