When did the economic bubble burst?

the economic bubble

In addition to the recent ups and downs in the stock market, a lot of things have happened in the financial sector, including a series of bail-out measures including major central banks, the liquidity test of the bond market, and even more, terrible data show that even Wall Street hedge funds, everyone Confused about the current situation.
The bubble-filled world of financial assets has triggered a domino effect. The Fed experienced a repurchase that began in September 2019. After a shortage of market funds, it has been printing money to save the market. The crazy bailout should be temporary. Until February 14, 2020, the Fed issued a statement saying that it will gradually reduce the bailout to the repo market from 120 billion to 100 billion per day, and will seize the market for 14 days of repurchase from 30 billion to 20 billion. This move may bring liquidity pressure to the market. In turn, it will cause turbulence in the stock market, I did not expect this day to be so fast!

In the single-day repurchase market on March 4, 2020, the Fed provided 100 billion US dollars of bailout funds, which is not enough. The main institutions have applied for 111.4 billion loans in the repurchase market! And in the 14-day repurchase market on March 5, 2020, the Fed provided 20 billion liquidity as planned to save the market, and major institutions applied for 72.5 billion loans. In other words, the number of liquidity applications, which is 3.6 times the amount of Federal Reserve assistance. By the way, the repo market requires a lot of liquidity from the Fed, which is very unusual in itself. Not to mention that the market is still short after bailouts. It started as early as February 25, 2020, so the Fed decided to lower the interest rate by 0.5%. Not only are there more ways to stimulate the economy and reduce liquidity pressures in the repo market, but the problem is that the shortage of funds in the repo market is not because banks have no money, and they dare not invest in the repo market.

Therefore, the impact of emergency interest rate cuts on this shortage of funds is the first time since the 2008 financial crisis that the Federal Reserve united the Central Bank of Australia and the Bank of Canada to jointly reduce interest rates. After the interest rate cut, the stock market reacted like this, because the emergency interest rate cut was different from 2008. The financial crisis in 2008 was to deal with bad debts and low-quality loans. This time, the emergency interest rate cut must be dealt with, from the supply chain to the supply chain. Two-way destruction.

JP Morgan’s latest global index report shows that the manufacturing index and the service industry index plummeted in February 2020 to the lowest point since the financial crisis in May 2009. The decline was the second-highest in history, and the first high point was in After the events of September 11, 2001, although the impact of the current event on global GDP has not yet appeared. However, compared with the composite index, GDP is usually delayed. If the composite index continues to fall, the impact of this event on GDP is obvious. And this 0.5% emergency interest rate cut cannot motivate people to get rid of the fear of spending and cannot solve the supply chain problem.

The Fed and major central banks have shown the true severity of the incident. The few Fed and Bank of Canada in history have lowered interest rates by more than 0.5% in the same month. What followed was the global financial crisis. Will this be a repeat of history? Has the economic bubble burst?

Comments

Coinbase stock forecast 2025: it's first quarterly report

After the trading hours on May 13 (this Thursday), Coinbase Global (COIN) will release its first quarterly report. Take this opportunity to give us a glimpse of the prospects of the first share of cryptocurrency exchanges. Actually, on April 6, before Coinbase went public, it had already released a forecast for the first quarter of this year. The core data are as follows: Revenue in the first quarter was approximately US$1.8 billion, a year-on-year increase of 842%; before the net profit was between US$730 million and US$800 million, the median was US$765 million, a year-on-year increase of nearly 23 times! Assets on the platform are 223 billion US dollars, accounting for 11.3% of the market share of encrypted assets; 56 million verified users, and 6.1 million monthly transaction users (MTU). It is worth noting that Coinbase's net profit margin reached a terrifying 42.5% in the first quarter, and the business model of “casino” is really profitable! ...

AMZN stock forecast 2025： Amazon's main advantages

On July 6, after the US stock market opened, Amazon broke through $3,600, a record high. Amazon has been oscillating between 3000-3500 US dollars in the past year, and the stock price finally broke through. Amazon is a stock that has a high valuation from PE but is seriously undervalued by the market from the perspective of its development prospects. It is one of my favorite technology stocks. Amazon's main advantages are: 1. Amazon's current GMV is only half that of Alibaba. Looking at the current penetration rate of e-commerce in China and the future penetration rate of e-commerce in the United States, we will find that Amazon e-commerce has huge growth potential in the United States. Amazon e-commerce is far from saturated in the United States. 2. Cloud computing has unlimited potential. As the industry leader, Amazon's cloud computing can maintain a growth rate of 20%-30% for many years in the future. 3. The international ...

PLTR stock forecast 2025： Cathie Woods increased Palantir stock position

Software company Palantir (PLTR) released the latest quarterly earnings report, which performed very well. After the financial report, Palantir's stock price soared to 14.64% at the highest point. At the same time, the keen Cathie Woods also bought $140 million in Palantir stock. I won't talk about Palantir's specific business. If you don't know much about it, you can go back to my previous article. Let's talk back to the financial report. Benefiting from the benefits of the US government’s contract renewal, Palantir’s earnings per share and total revenue both beat expectations for this quarter’s earnings report. Among them, earnings per share were $0.04, beating the expected $0.01; total revenue was 376 million, an increase of 49% from the same period last year, slightly higher than the expected $361 million. Although the extent of beating expectations is not very large, the biggest highlight of the financial report is to broaden the business. ...

Bitcoin will eventually lose its king status! Replaced by Ethereum

Considering many factors such as real use, user base, technological iteration speed, etc., Ethereum is likely to replace Bitcoin as the mainstream cryptocurrency. In terms of market trends, the key difference between the current cryptocurrency market and the 2017-2018 bull market is the participation of institutional investors. However, with the recent slowdown in the participation of institutional investors, the inflow of cryptocurrency ETFs has decreased, alternative currencies have emerged one after another, and the market has once again been dominated by retail investors. This shift from institutions to retail investors is increasing the possibility of a market crash. The current high volatility in the market will continue until cryptocurrencies have potential real economic uses independent of prices. Etherfang has huge potential The Ethereum system supports smart contracts and provides developers with a way to create new applications. ...

Cloudflare's 4Q 2021 earnings report

Just took a look at Cloudflare's (NET) 4Q 2021 earnings report. Cloudflare is in an area that covers several hot spots, including content delivery networks, i.e. CDNs, cloud computing, and cybersecurity. For the Cloudflare quarterly report, here is a summary: 1) Revenue of $194 million (then expected 4Q revenue in the range of $184 to $185 million), up 52% year-over-year ($172 million in 2021, up 51% year-over-year). 2) The number of customers continues to grow rapidly, with the total number of customers has reached 1416 (1260 in the previous quarter). 3) Non-GAAP gross margin was 79.2% vs. 78.1% in the same quarter last year (vs. 79.2% in 3Q vs. 77.3% in the same quarter last year.) Non-GAAP net income has started to turn around, meaning it has started to be profitable. 4) Revenue is expected to be in the range of $205 to $206 million in 4Q. That works out to about 6% YoY growth. Cloudflare had good results this time, beating its previous guidance. Revenues are still growing at a...

Shopify stock forecast 2025：Is it worth buying?

In the last year, the stocks rose relatively well. Another sector is e-commerce. Whether it is Amazon, Alibaba, JD.com, Pinduoduo, SEA or vertical e-commerce platforms Etsy and Chewy, all of them have experienced huge gains, while another category has benefited from the e-commerce sector. The company is a website building tool company such as Shopify BigCommerce Holdings. Today I will talk about shopify, the leader of website building tools. First, let's briefly talk about shopify's business model. To put it simply, shopify is a fool-like website building platform. In the past, when a company wanted to build a corporate website, it generally needed to find a dedicated person to design and maintain the website. If you want to add shopping functions to the website, the cost of building the website will also increase. This is true for many small businesses and individual businesses. A very difficult thing. Shopify uses the SAAS model to provide websit...

NIO stock forecast 2025: 2021 Q1 report analysis

April 30, NIO announced the first quarter of the 2021 financial report. Revenue reached 7.98 billion yuan, a year-on-year increase of 481.8%, and a month-on-month increase of 20.2%; gross profit was 1.5548 billion yuan, a month-on-month increase of 36.2%, and last year was -167.5 million yuan; a net loss of 350 million yuan was significantly narrowed year-on-year and month-on-month. Various indicators show that NIO's performance in the first quarter of this year is very impressive. Gross profit margin exceeds 20% for the first time NIO’s Q1 car sales were 7.40058 billion yuan, a year-on-year increase of 489.8% and a month-on-month increase of 20.0%. The gross profit margin of automobile sales was 21.2%, exceeding 20% for the first time, a significant increase from -7.4% in Q1 of 2020 and 17.2% in Q4 of 2020. In addition, Weilai's Q1 comprehensive gross profit margin in 2021 will also reach 19.5%. The founder, chairman, and CEO of NIO sai...

NVDA Stock Forecast and Analysis: 3 opportunities and 2 risks

What are the 3 opportunities and 2 risks for NVIDIA? How to invest in NVIDIA stock? NVIDIA(NVDA) stock buy or sell？ NVIDIA Stock Forecast and Analysis 2021 First, because in the third quarter of 2020, NVIDIA's revenue and profit have set record highs. Among them, revenue was 4.73 billion U.S. dollars, an increase of 57% year-on-year, and analysts expected it to be 4.41 billion U.S. dollars. NVIDIA's revenue Earnings per share were 2.91 US dollars, analysts expected to be 2.57 US dollars. It can be seen that both revenue and profit have exceeded analysts’ expectations. NVIDIA expects its fourth-quarter revenue to be US$4.8 billion, in line with analysts’ expectations of US$4.42 billion. Second, the current market value of NVIDIA is much higher than the combined market value of Intel and AMD. From the beginning of the year to now, NVIDIA has risen by 123%, AMD has risen by 87%, Intel has fallen by 24%, TSMC has risen by 64%, and the Nasdaq has risen by 33%. It can be seen that bo...

What is a spac stock in the Investment market?

Let me talk about SPAC first. SPAC (Special Purpose Acquisition Company) means "Special Purpose Acquisition Company", also known as "Blank Check" or "Shell Company". As the name suggests, this company has no actual business, and its essence is a financial innovation tool that provides companies with listing services. More simply, SPAC is a shell resource company established by professional institutions such as investment banks and fund companies as promoters. The sole purpose of this company's listing is to find the target company, through reverse mergers and acquisitions, to achieve the target company's listing and financing. Most people pay attention to SPAC from 2020, but in fact, SPAC is nothing new. The SPAC structure was first born in the 1990s and was pioneered by David Nabers, who worked for the Wall Street investment bank GKN. However, in the past few decades, compared with traditional IPOs, the number of SPACs is very limited, and ...

The signal that the stock market has peaked?

the stock market Although I know how to judge when the bear market is over and when I should buy at the bottom, I still don't know how to judge the selling at the top. I'm afraid I don't know when to leave the market after buying stocks in the future. If you have also tried to avoid the crash, stock market crash, and even bear market, or always hold stocks at these times. These four tricks are based on my experience in the stock market for more than 10 years. They help me hold cash early before many market declines, so I suggest that you must see the end. It is likely to help you invest in stocks. Raise to another level. Because knowing how to go is more important than knowing how to buy, and knowing how to go is an important factor in determining how much you can earn or lose. The first trick, everyone needs to learn to identify the Distribution Day. As the name implies, the shipping day is a day of huge selling pressure. On that day, it may be that large account...

FinanceLinkway

Search This Blog