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Table 5 · 12-10-2024, 03:57 PM

I'm probably misremembering the details, but a few days ago on a financial podcast I heard something along the lines of "the market could fall by 50% and we technically still wouldn't be breaking the long-term bullish trend that we've been on for 15 years". Apparently that's how much we're extended these days from the norm.

So technically there is potential for quite a retrace...the trick is of course timing it all, as this trend could keep advancing for years.

There's also the question of, if there is a sudden crash, how much pain will be considered too much. Events like the 07-08 GFC and Covid have taught us that if there is always a point where Governments/Fed will step in and subsidize a crisis. You could of course argue it was necessarily, but once that precedence was set with the GFC (and exacerbated with Covid), it basically changed everyone's behaviour and risk tolerance. At this point, people expect to be bailed out financially...which of course can stretch things to even more irresponsible levels.

What would be the pain threshold this time? I have no idea...but when everyone is invested balls-deep (especially the rich and government officials) in the current system, you can bet there would again be enormous pressure for action if there was a big enough drop (assuming it was a sudden drop...if it was more of a Japanese style slow burn towards economic mediocrity, that's another thing).

12-10-2024, 03:57 PM	#683
Table 5 Franchise Player Join Date: Oct 2001 Location: NYYC Exp:	I'm probably misremembering the details, but a few days ago on a financial podcast I heard something along the lines of "the market could fall by 50% and we technically still wouldn't be breaking the long-term bullish trend that we've been on for 15 years". Apparently that's how much we're extended these days from the norm. So technically there is potential for quite a retrace...the trick is of course timing it all, as this trend could keep advancing for years. There's also the question of, if there is a sudden crash, how much pain will be considered too much. Events like the 07-08 GFC and Covid have taught us that if there is always a point where Governments/Fed will step in and subsidize a crisis. You could of course argue it was necessarily, but once that precedence was set with the GFC (and exacerbated with Covid), it basically changed everyone's behaviour and risk tolerance. At this point, people expect to be bailed out financially...which of course can stretch things to even more irresponsible levels. What would be the pain threshold this time? I have no idea...but when everyone is invested balls-deep (especially the rich and government officials) in the current system, you can bet there would again be enormous pressure for action if there was a big enough drop (assuming it was a sudden drop...if it was more of a Japanese style slow burn towards economic mediocrity, that's another thing).