Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Veteran analysts from Wall Street warn investors that we are at the brink of the next economic recession and it could be possibly worse than the 2008 financial crisis.
The coronavirus spread has exacerbated over the last months thereby severely impacting markets worldwide. On Tuesday, the Federal Reserve pressed the buzzer by offering rate cuts amidst rising concerns of the U.S. economic crisis. While the Fed is attempting to boost the crashing markets, analysts think it is not enough.
Nouriel Roubini Predicts Dow Jones Fall
If the virus spread continues at this rate, we can expect a major market crash to the tune of the 2008 financial crisis. Nouriel Roubini, who correctly predicted the 2008 market crash, said that Dow Jones can crash 40% due to the Coronavirus outbreak. Famously known as Dr. Doom, Roubini thinks that Down can crash below $18,000 levels.
Until Feb 13 last month, Dow Jones was soaring massive high hitting its all-time high above 29,000 levels. However, in less than a month’s time, Dow Jones has lost 3000 odd points to trade below 26,000 level on Tuesday. If the situation continues to tailspin, we can see a massive bloodbath in the global markets.
On Tuesday, the Federal Reserve announced emergency rate cuts as the 10-year Treasury bond dipped below 1%. This fall has been a record-low with unprecedented lower historic levels. If this is anything, this could be a strong indication for an impending global economic crisis.
Besides, the issue with the coronavirus doesn’t seem to be stopping anytime soon. The number of global infected cases and deaths continue to increase every single day. So far the coronavirus has reached 70 countries. However, it has reportedly claimed fewer deaths fo far than Ebola or SARS.
Monday’s short-lived rally was indicative more of a bear market instead of bulls, say experts. Quantitative easing measures by the Federal Reserve can have little impact.
Peter Schiff Says Stock Market Bubble Will Burst
In his latest comments, Wall Street veteran Peter Schiff said that the Fed’s Tuesday rates cuts decision is the last nail in the coffin of a raging stock market bubble. Speaking to MarketWatch publication, Schiff said:
“The problem isn’t the pin, the problem is the bubble and once the bubble is pricked, the damage is done and the air is coming out of this bubble. If it wasn’t the coronavirus, it would have been something else”.
Moreover, with Tuesday’s market reaction, Schiff said that the bond market will collapse along with the stock markets. “We are going to have a collapse of the bond market and the financial crisis that’s coming will be much worse than the one we had in 2008,” he said.
It looks as if it’s not the right time for new investors to do any bottom-fishing currently. One might end up burning their cash big time.