George Soros is just another liberal who wants the economy to fail, for personal profit and to foment ‘revolution’ and class warfare, similar to past leftist upheavals such as the October Revolution, French Revolution, The Great Depression, and, to a lesser extent, the financial problem of 2008, which put Obama in power. Some on the right also want failure to usher in a new government, as well some to push bad gold investments (Peter Schiff comes to mind). Doom and gloom cuts both ways.
If Soros, who is a rabbinical leftist, wants failure, why do I want to join him? Why do I want to join Black Lives Matter, Sanders, and the rest of the failure-seeking, America-hating liberals? No thanks. I’ll take technology, wealth creation, capitalism, and western civilization over the caliphate, thank you very much.
If civilization falters or completely fails, what makes the right certain the left won’t take over, creating something worse than we already have?
However, influential, wealthy forecasters, whether it’s Schiff or Soros, have really bad track records. For example, in 2013 and 2014 , Soros was long $1.3 billion in SPY puts (a very aggressive bet that the market would go lower); the market has since rallied 20%, rendering those puts worthless. Since 2009, to no avail, Schiff has been predicting dollar collapse, a bear market, and hyperinflation. Any one of these videos of Mike Stathis is entertaining. Peter Schiff is broken clock and a fool, who is trying to peddle overpriced gold and other bad investments.
According to experts, the conditions for a bear market are still not present.
The most common factor was a recession, unsurprisingly, which has coincided with a bear market eight times. This was followed by extreme valuations (five times), commodity spikes (four), and surprising, aggressive Fed tightening cycles (four).
Currently, the chart doesn’t seem to indicate that Kelly believes any of the situations exists today. There is no official recession, commodities have crashed instead of spiked, and the Fed has only just begun to raise rates. The only debatable metric is extreme valuations, and that alone has only brought down the market once, in 1961.
We’re still in a slow-growth economic expansion with low interest rates. With the exception of large cap tech and some consumer stocks (Disney, Nike), the rest of the economy is sluggish, which means the fed will be dovish.
The PE ratio of the S&P 500 has risen from 13 in 2009 to 19 where it is today, but that’s still 50% lower than the 2000 highs. The PE ratio of the Nasdaq is only around 20 instead of >100 in 2000.
In 2008, there was a definite possibility of the baking system failing, but presently bank reserves are at record highs and lending standards are more stringent than ever. The conditions for a repeat of 2008 just aren’t there. A crisis, should one happen, could be something unexpected – it could be China – or nothing will happen. The fact Soros, who is considered one of the greatest money mangers ever, lost so much money with his puts betting against the S&P 500, is evidence betting on crisis is a losing game.
It’s foolhardy to think you are somehow privy to something, some crisis, that can override millions of people buying stuff, tens of thousands of high-IQ people innovating, and centuries of free market capitalism. As in the case of The Big Short, a few make fortunes betting on collapse, but most lose money.