Here we go. My pal in Washington, “Reeko” is predicting a stock market crash in the very near future. He’s going out on a limb in making this prediction — it could be proven wrong within a week or two. But he could also be proven to be correct. Read and prepare as you will:
If you haven’t prepared financially, you may only have a few days left to do so. Next week after the Monday night destruction of the Hillary campaign – and I still have serious doubts that she will even make it to the show – the future narrative is already being written and waiting for marching orders: that the coming stock market “correction” will be crashing because of Trump’s headlock on the November election. That isn’t true, but it will be what is messaged and massaged into the civil discourse. It will be repeated often enough to become true even when it isn’t.
Most financial advisors are insisting that the current high Dow is due largely to the near-free money from the Fed’s incredibly low rate. The Fed shilling for the Obama administration has been hinting at an unavoidable interest rate hike soon. After any rate hike, the market will follow – downward – and most investors already know that. Trump himself has said so, repeatedly, and even advised folks to have little money in the stock market. Those words WILL come back to bite him though because of the fact that most new presidents’ first year in office usually results in a lower Dow. Steve Forbes just said the same thing on Neil Cavuto – which I am watching as I type this.
What is different now is that there are certain movers in the stock market that can influence its rise and fall. That isn’t a new revelation and it certainly isn’t a conspiracy theory but in fact that is exactly how investment companies make money – they predict the rise and fall of stocks and sectors of stock by watching certain large movers. I don’t mean insider trading or anything else specifically illegal although, in the context of this political season we shouldn’t rule illegalities out. (!) And while manipulation of a stock exchange is still an illegal enterprise, that certainly doesn’t stop it, neither here nor overseas in foreign markets. For example, if a large investor suddenly started selling off or buying up any certain stock or sector of stock, a rather large number of investors will follow, sometimes stampeding the market into a freefall or a zoom climb. That is just normal business as usual, but it can be – and sometimes is – done to influence elections. Imagine the leading headline on a legacy news channel only after it becomes apparent in the polls that Hillary can not overcome the polling deficit:
“DOW Tanks As Investors Fear Trump” will be read gleefully by a bubble-headed bleach blonde, as Don Henley of the Eagles said, “with a gleam in her eye.” Of course, in our current Age Of Apps, it will most likely be the scroll across the bottom.
Ergo, my prediction: the DOW will lose 35 percent and stabilize near 12500, the majority of that drop in the remaining months of 2016. Are you ready for it?