A Perfect Storm Is Brewing
29 October, 2018
So it boils down to this: Some stocks have gotten crushed, but the market overall has barely been dented – though the fundamentals are rotten, shares are still ludicrously overpriced, enthusiasm is still exuberant except on bad days, and blind faith in annually rising stock prices still reigns. And the fact that stocks like Tesla [TSLA] or Netflix continue to levitate beyond all reality shows that this downturn has a long way, and years, to go.
The recent market weakness seen over the past two weeks is nothing compared to what’s in store. As we’ve been carefully chronicling, bubbles burst from ‘the outside in’, starting at the weaker places at the periphery before progressing to the center.
Emerging market equities are now down -26% from their January highs and -18% year-to-date. China’s stock market is down -32%, even with substantial intervention by the government to prop things up.
The periphery has been weakening all year, and the contagion has now spead worldwide.
Wednesday, a white man with a history of violence shot and killed two African-Americans, seemingly at random, at a Kentucky Kroger store following a failed attempt to barge into a black church.
After mail bombs were being sent to people who’d been criticized by the President, a suspect was arrested Friday — a man who had railed against Democrats and minorities with hate-filled messages online.
And Saturday morning, a man shouting anti-Semitic slurs opened fire at a Pittsburgh synagogue, killing 11 people attending Jewish services.
At Pinkerton, a private security and detective agency founded in 1850, requests for executive security have increased 20 to 30 percent annually over the last five years, said its vice chairman, Tim Williams. And people are looking for safeguards in all areas of their lives that pose risks, experts say, including information technology and social media.
“People are scared right now,” Mr. Williams said.