The global financial markets are showing signs of concern as various indicators point towards a potential crash. According to a tweet by Mac10 (@SuburbanDrone), the market is currently two weeks ahead of last year’s schedule, as indicated by the oscillator and the 50 dma. The oscillator, which measures the market’s momentum, was one year oversold during the recent lows, but it has now swung back to being overbought.
There are fears that the situation could worsen in the coming days, with the possibility of a global crash starting this week. Mac10 suggests that the situation could spiral out of control by Labor Day, which is a worrying prospect for investors and financial experts alike.
Another tweet by Financelot (@FinanceLancelot) highlights the news that Goldman Sachs is selling its $29 billion wealth unit. This move could be an indication that the banking giant is preparing for potential market upheavals and looking to safeguard its assets. It is worth noting that such large-scale divestments by major financial institutions can often signify underlying concerns about the market’s stability.
Meanwhile, Peter Massaut (@PeterMassaut) draws a parallel between the current situation and past instances where rate cuts were implemented in response to a contracting manufacturing sector. This raises questions about the possibility of a “soft landing” for the economy, suggesting that further rate cuts may be on the horizon.
In another development, it was announced that the head of bank supervision at the Federal Reserve will be departing on October 1st. This personnel change, coupled with other recent departures, such as that of Azher Abbasi, the executive vice president overseeing lenders including Silicon Valley Bank and First Republic Bank, has led to speculation that individuals within the industry are jumping ship in anticipation of an impending banking crisis.
The departure of Niel Willardson, who will replace Abbasi on an interim basis, has raised eyebrows among market observers. Financelot (@FinanceLancelot) suggests that the rats are jumping ship before the banks implode on October 2nd, hinting at potential turbulence in the financial sector.
Additionally, concerns about the housing market are coming to the forefront. Wall Street Silver (@WallStreetSilv) highlights the rising costs faced by home buyers as mortgage rates reach their highest level in 21 years. These increasing costs, coupled with an already unaffordable housing market, could pose significant risks to homeowners if home prices were to decrease by 5%, potentially leading more than 200,000 households to fall into negative equity.
Don Johnson (@DonMiami3) questions the sustainability of the housing market, referring to it as a “mirage.” This sentiment is reinforced by a tweet from Win Smart, CFA (@WinfieldSmart), stating that US mortgage demand has fallen to a 28-year low.
In the midst of these concerns, Mish Talk published an article examining the US housing bubble. The article notes a massive divergence between home prices and real disposable personal income, indicating an understated bubble. The Federal Reserve’s role in creating financial bubbles through prolonged low interest rates is highlighted, contributing to increasing wealth inequality and a shrinking middle class.
Furthermore, a tweet by Otavio (Tavi) Costa (@TaviCosta) reveals that the US housing payment for new homes is now as high as 51% of the median household income. This is the highest level since the 1980s, indicating increasingly tight financial conditions for potential homebuyers.
In conclusion, various indicators are pointing towards potential market instability and a looming financial crisis. The concerns range from overbought market conditions, major financial institutions divesting their assets, personnel changes within the Federal Reserve, and growing risks in the housing market. These developments have generated unease among investors and experts who fear that the situation could worsen in the coming weeks and months.