“I think the biggest risk in all markets right now is over-valuation. Real estate, stocks, and bonds are seriously over-valued, especially in the US. Investors who buy these asset classes at the top of the market risk the kinds of losses we experienced in 2007-2009”
– Mark Nestmann at The Nestmann Group
A lot of the experts listed below highlighted an overvalued stock market, bond market, real estate market and a few other risks related. At this point, nothing looks like an overvalued, ready to blow up risk. The most contrarian thing to do right now might be cash. Add on considerations like margin debt from individual investors, it all starts to add up to a very dark future.
To top off all those overvalued assets comes two political risks: 1) tensions flaring between North Korea and the US. Any break out of war would send shivers into the markets, 2) US shutdown as budget items like Trumps wall are hitting both sides of DC. To sum up the greatest risks across the markets, Bill Holter steps in to say:
“in one word …EVERYTHING!”
Bill Holter, Jim Sinclair
Sub Prime Auto is Overheating
Per Business Insider, Subprime delinquency rate for the trailing four-quarter period moved to 2% in the third quarter. The only other time it was 2% or more was in the immediate aftermath of the 2008 financial crisis. Subprime delinquency rate is creeping up while the subprime market is ballooning in size.
Liberty Street Economics blog explains, “The data suggest some notable deterioration in the performance of subprime auto loans. This translates into a large number of households, with roughly six million individuals at least ninety days late on their auto loan payments.”
Overvalued by Every Metric
“The trillion dollars of stock bought at record high prices with debt will be vaporized in the next inevitable stock market crash. But the debt will remain.” Jim Quinn, The Burning Platform blog
Margin Debt. The Shadow Market Time Bomb
Bond Market Bloodbath
“Bond market crash.”