Paul Singer is bracing for ‘all hell to break loose’ in the stock market

I find it interesting how rare it seems that people "analyzing the market" don't (at least openly) look at what is actually causing the market to grow.

They seem to focus more on the financial signals, as opposed the the underlying innovation, infrastructure, logistics, or even sales in some cases.

Overall, We've seen a pretty massive uptake, but we also only recently returned to pre-2008 valuations of companies. That's a decade of next to no growth in businesses (supposedly). However, I seriously doubt most businesses that survived the crash don't have more infrastructure today. Meaning, I'm confident they are actually worth more today (on average), regardless of what the financial signals say today.

That being said, I'm actually working on a project[1] which uses other signals (other than financial) to determine a companies worth. Primarily, we are focusing on identifying "experts" in a companies field, and determining the brand strength with those experts. We are also looking at financials, generally how often they are discussed, etc. but the real value comes from the experts opinion. Seems to work better than Paul Singer's approach.

Although, the one thing I will say about the potential for economic collapse is:

> Singer is among those fearing that very scenario. He is betting that an economic recession may be on the horizon and believes that, with interest rates already near ultralow levels, the Federal Reserve won’t be able to provide a sufficient quantitative-easing cushion, as it did during the 2008-’09 financial crisis.

He is correct about that :p, that's probably my largest fear in regards to the current fed policies.

[1] https://projectpiglet.com/

Market prognostication isn't generally good for your sanity or financial wellbeing, and MarketWatch is kind of a trash site, given to talking about technical indicators and support levels and other BS like that.

That said, there are a number of aspects to the current economy that I find deeply worrying - incredibly high housing/healthcare prices that are seemingly disconnected from reported inflation metrics and median wages, the US at record debt levels relative to GDP (if you count household+government debt), worldwide cash printing, with only assets growing in price to match, and a ferocious property bubble in China. If the last one pops, it seems likely that the money flowing out of China into US property markets will drop out, which would take out the upward pricing pressure, and probably ding US property values quite rapidly, since most people here can't reasonably support the cost of houses here on median wages with anything over rock bottom interest rates. This would seem to make existing secured loans a whole lot less secured than they were before. Also worryingly, banks are compensating for unaffordability by requiring less money down, and covering the difference with PMI (insurance). I think the US populace might simultaneously be nearing the breaking point in terms of the debt it can support due to years of easy money discouraging frugality. If spending dropped off due to an inability to spend more, that would ding the corporate earnings supported by credit, which would spike PE ratios, unless P dropped a lot.

In short, if these things come to a head in proximity to each other, it seems like we might really be in for a shitstorm, which may include a large dose of inflation and bond yields rising if central banks need to redeem a chunk of that US debt they've been gobbling up for its historical safety, in order to compensate for flagging economies to meet their spending obligations.

I really hope I'm wrong (and please tell me why, if I am), but our fundamentals don't seem to support the prices, unless the market is saying the dollar is worth a whole lot less than we think it is.

It seems like the economy is largely debt driven. The amount of personal debt that people can accumulate before declaring bankruptcy is finite, and when their credit drops, the economy contracts.

Yeah, I'd love to see it, and I definitely agree that it's impossible to predict the future with any degree of certainty.

One of the big reasons for medical bankruptcy is the loss of income without the loss of expenses despite having medical insurance, but I'm sure it's better now that we don't have lifetime max coverage limits and that sort of thing.