Three major Wall Street banks are now issuing warnings to investors that global markets are in the final stages of their rally, and an economic downturn will soon hit stocks everywhere. Bloomberg reports:
>HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle. Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop. “Equities have become less correlated with FX, FX has become less correlated with rates, and everything has become less sensitive to oil,” Andrew Sheets, Morgan Stanley’s chief cross-asset strategist, wrote in a note published Tuesday.
Morgan Stanley’s model reportedly shows assets across the world are “the least correlated in almost a decade.” And, just as prior to the 2007 start of the Great Recession, investors are pricing assets based on the risks specific to an individual security and industry, and shrugging off broader drivers. The report also states:
>Oxford Economics Ltd. macro strategist Gaurav Saroliya points to another red flag for U.S. equity bulls. The gross value-added of non-financial companies after inflation—a measure of the value of goods after adjusting for the costs of production—is now negative on a year-on-year basis ... The thinking goes that a classic late-cycle expansion—an economy with full employment and slowing momentum—tends to see a decline in corporate profit margins. The U.S. is in the mature stage of the cycle—80 percent of completion since the last trough—based on margin patterns going back to the 1950s.
what does this mean for crypto? a bump for btc incoming?
Dylan Price
Our grass is looking greener every day.
Asher Bailey
I second this. What will happen to BTC and why?
Liam Cooper
Good, good...
Benjamin Gutierrez
Honestly, we don't fucking know. We've never had to face something like the 08 recession. The general theory of crypto says that we should do well, or even prosper as the fiat currencies lose value.
But it's entirely possible we could go the other way, as more and more people pull out of crypto to pay off their debts. It will likely spell the end of a lot of shitcoins and the market would consolidate around the useful ones, much like the dotcom bubble.
Either way, it's going to be an interesting ride.
Christian Sanders
not alot in the short term from the north american market, normies are slow adaptors, gooks will jump the gun ALOT quicker, the west will soon pickup after seeing the gooks/nips raking in money and THEN the west will pick up. will be fairly slow desu. buying crypto and exchanging is still hard for normies. we won't see people joining cryptos enmass even now, theres less than 1% who owns cryptos in the global population unless there is an app that is normie friendly. the "smart investors" ofcourse will go balls deep, we will make it big whenever this happens, but dont sell everything then, this will make normies want to get in, big guys will make a murder, i would start selling when the late percentile of normies enter the market tho.
Joseph Campbell
The problem with the idea of everyone piling into crypto to save their wealth is most people with wealth still don't even know how to buy a Bitcoin much less an altcoin. And when global markets are tanking and it takes 2 weeks to get your identity confirmed on exchanges as it is with even such a low number of users now, it would be too late for most to get Bitcoin except buying OTC.
Ian Moore
wasnt there some event in china that caused a bum for btc?
Carter Martinez
They will learn how to. When your wealth is at stake waiting for an identity confirmation isn't a big deal.
