Are we entering the BLOW OFF Phase?
- Housing bubble. The excessive growth in the housing market is a concern. People are paying more than asking in the US. Mortgage rates are cheap. And as long as the bank wont rise the rate they are all doing great business. What happens when the FEDs start tapering the economy or even start increasing their lending rate. Mortgages go up since the banks has to increase their own lending Prime rate. This will disqualify more prospects for a mortgage. Hence the housing market will cool off. Banks hugely depending on mortgage rates will lose customers over time.
- China Regulations. The Crack down on tech and education companies is ongoing and is a threat to the free market. Alibaba, Tencent, Didi, etc. There is a theft of capital going on and regulations about what they can do or not. Crackdown on free education without communist propaganda. Music is considered opium. China has 20% of the world business, 17% of their business is with the US and 17% with the Euro Zone. Due to Chinese bookkeeping and accounting Chines IPOs are currently banned from the NYSE.
- China Currency. The Yuan is not a free currency and hence it is set by the Communist Party. The Yuan could be lowered to drive exports higher and to content import taxes in the US. A lower Yuan will make China more aggressive. It is currency manipulation without adhering to world standard. I.e. having a free floating currency that can be bought and traded.
- Delta Variance. The increasing effect of the Delta Covid 19 variance. If it turns out that lockdowns will be implemented again this alone can bring the world economy to a halt. Further vaccines will be required. Pfizer only works in 46% of cases. Moderna is better but this could be the next pandemic 2.0. Not even recovered and here we get the second China Virus blow. Who pays for that?
- The FOMC, Feds are buying billions of Dollars in assets in order to drive the stock market up and higher. Billions of infused Dollars automatically pushes inflation higher. And the insider trading is continuing.
- The Warren Buffet indicator at 237% indicates that the stock market strongly is trading 237% above its historical Trendline! I is strongly over valued.
- Around 68% of the trading is within the 1st Standard Deviation
- Around 95% of the trading is within the 2nd Standard Deviation
- Around 99.7% of the trading is within the 3rd Standard Deviation
And this is were we are dwelling now. The expectations are too high. The market is in hysteria mode.