Who Is Preparing Market Crash For 2022?
The best financial theory I found on how the 2008 crisis will happen again, probably in 2021-2022. What should you know about the market crash? What reasons cause it? What will happen with crypto market bubble?
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The deep roots of the 2008 crisis was well explained in two movies that I highly recommend you to watch. The first one The Big Short (2015) and the second documentary movie that I like even more - Insider Job (2010).
It is a documentary with interviews of many people, including those who were involved in the Ponzi Scheme of the derivative market bomb that led to the crash of 2008. And all this story started even far before 2008. We have to look back in the 1990's when the Derivative Market was created. This was the opening of the literal Casino in the financial world. One such derivative many are familiar with are options (CALLs and PUTs). Other examples of derivatives are forwards, futures, swaps, and variations of those such as Collateralized Debt Obligations (CDOs), and Credit Default Swaps (CDS).
Attempts were made to regulate the derivatives market, but due to mass lobbying from Wall Street, regulations were continuously shut down. Bill Clinton passed something called the CFMA or the Commodity Futures Modernization Act of 2000 which made it impossible for anyone to properly regulate the derivatives market. The Derivative Market exploded in size once regulation was banned and de-regulation of the financial world continued. You can see as of 2000, the cumulative derivatives market was already out of control.
But why in 2021-2022 will this story repeat again? Why the market crash will happen again?
It's the same thing as 2008, but much worse due to even higher amounts of leverage in the system on top of massive amounts of liquidity and potential inflation from stimulus money of the COVID crisis. Now it may be happening again — this time not with residential mortgage-backed securities, based on loans for homes, but commercial mortgage-backed securities, or CMBS, based on loans for businesses. And this industry wide scheme is colliding with a collapse of the commercial real estate market amid the pandemic, which has business tenants across the country unable to make their payments. Delinquency (ДулИквенси) rates of Commercial Mortgages started to skyrocket when the COVID crisis hit. They even surpassed 2008 levels in March of 2020. Remember what happened in 2008 when this occurred? When delinquency rates went up on mortgages in 2008, the CDO's of those mortgages began to fail. But, this time, they can-kicked it because COVID caught them all off guard.
Just like Mortgage-Backed Securities from 2000 to 2007, the loaners will go around, hand out loans to businesses, and rake in the profits while having no concern over the potential for the subprime loans failing. And the cherry on the top of this overleveraged crisis is the Cryptocurrency market that was introduced after the 2008 crash. Did you know that you can get over 100x leverage in crypt0 right now? Imagine how terrifying that crash could be if the other markets fail. There is so much leverage the world. All it takes is one fatal blow to bring it all down - and it sure as hell looks like COVID was that uppercut to send everything into a death spiral.
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*None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partner websites. The video is accurate as of the posting date but may not be accurate in the future.
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