Stock market

Chamath: The ENTIRE Stock Market Is Crumbling Down (And When To Buy)

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Over the past few months, a variety of fund managers and billionaires have been warning of an economic slowdown. One of these managers is billionaire hedge fund manager Chamath Palihapitiya, who has recently been warning about the implications of the Fed’s actions. We saw what happened when the Fed printed unprecedented levels of money into the economy. Inflation began to soar, the financial markets appreciated to all-time highs, and speculation increased to dangerous heights. The Federal Reserve has a substantial impact on the economy. The risk going forward lies in the Fed’s reaction to rising prices. That is what so many fund managers, economists, and retail investors have been worried about. This video will cover why Chamath believes inflation is no longer what investors should worry about. According to Chamath, investors should be looking at a totally different indicator.
In a frightening turn of events, the Federal Reserve is adamant about cutting its balance sheet and raising interest rates to combat inflation. Millions of people around the world have called out inflation as not being transitory, but it’s looking like those worries may be a self-inflicted prophecy. The popularity of that opinion is causing the Fed to be overwhelmingly hawkish. Just like the Fed’s reaction during March of 2020, the Fed may be overreacting again but on the other side of the spectrum. Chamath believes that inflation may actually turn out to be more transitory than people are expecting solely because the Fed may overreact. One famous investor named Jeremy Grantham has been warning of a market crash for America’s superbubble. Grantham explained how the market has been stabbed by COVID, money printing, unexpected inflation, and the promise for higher interest rates. He sees the market as a monster that has appeared to be immortal over the past couple years but will suddenly die down. The phrase superbubble is used because Grantham called 2020 a quote-unquote “epic bubble” and he also called 2021 another bubble. Therefore, we would currently be in a bubble squared or a super bubble. I personally don’t listen to Jeremy Grantham, because he is essentially a broken clock. A broken clock says the same time every day and will be right two times a day. In the case of Grantham, it’s unclear whether his money was where his mouth is. That being said, Grantham does detail solid points from time to time. The US economy is in a weak position by all means. Chamath believes that the Fed will likely overdo its retraction and potentially cause the US to go into a recession. The government printed $10 trillion and equities have corrected by $10 trillion. If equities continue to crash from rising interest rates, then it is possible that the net money outflow could eventually become negative. This is evident from the fact that growth stocks and cryptocurrencies have crashed significantly over the past couple of months. On January 22nd on the All In Podcast, David Sacks, a famous venture capitalist, explained why a recession is imminent, which Chamath agreed with.
The most important factor that is pointing towards a potential recession is the bifurcation, or in other words, the division in the global economy. You might think that interest rates are increasing around the world, but that’s not the case. While the US Federal Reserve has been increasing interest rates, China has actually been lowering interest rates. This is concerning for one reason. The Fed raising interest rates could indirectly crash China’s economy, which is currently in a weak position. Because China represents such a significant part of the economy, a crash in China’s economy would hurt America’s economy as well. This is problematic because China’s property sector is currently going through a major deleveraging. A deleveraging is when companies reduce their debt by rapidly selling assets. We’ve seen this happen not just with Evergrande, the second largest Chinese real estate developer, but also with plenty of other developers as well. At the same time that this is happening, China is also being impacted by Omicron, as the Chinese government has been extremely strict on shutdowns. The result of these two factors is China’s rapidly slowing economic growth, which is projected slow down even more in the future. Chinese policy makers are panicking in response to this and are quickly loosening their monetary policy. Yu Yongding, an economist who once advised the People’s Bank of China, told Reuters that “we need a relatively loose monetary policy. How much we loosen depends on economic conditions, but the policy direction is clear.” The People’s Bank of China, or PBOC in short form, will likely cut the banks’ reserve requirement ratios soon as well.

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56 Comments

  1. *The economic hardship, recession, unemployment and the loss of job caused by covid pandemic is enough to push people into financial ventures. Summer is here again with lots of activities to be enjoyed. Well, I’m taking a trip into investing because I lost so much during this pandemic. Multi creation of wealth is the best strategy to ensure financial sustainability!*

  2. 1 more thing, this move to so called green energy is going to guarantee high fossil fuel prices from now on, nobody is spending money expanding oil fields and adding to reserves, all that R&D money is being returned to shareholders. It is absolutely stupid the way governments and corporations around the world are diving into green energy while abandoning fossil fuel at a time when the world is still FULLY dependent on it, it’s a recipe for disaster.

  3. Chamath pumped and dumped Tesla, now he’s trying to pump and dump the entire market. The bottom is nowhere near.

  4. Really tired of you and other YouTubers who constantly prey on peoples fear, especially over the weekend when people don’t have access to the market. The amount of damage you cause trying to propel this self fulfilling prophecy of a market crash inspires people to take short positions in the wrong places. I’m sick of it. Bear market this, bear market that. Learn to read a chart and news and you can see very clearly where trends reverse. Nobody needs this constant FUD from here or anywhere else. If you’re new to this guys channel be warned: every video this guy and other YouTubers make is just garbage noise. Study yourself. Stay away from these “gurus”. The information you need is free and on the internet.

  5. Clowns.They even don’t know that money don’t disappear when stock market goes down. It just change hands. Dont listen to a single word of them. Grantham is right.

  6. Am thinking of getting into crypto investment crypto is indeed the future

  7. Chamath “Let the Uighurs eat cake in concentration camps” Palihapitiya. That guy is a heartless bastard after what he said, I will never respect him again.

  8. If everything is
    in asset bubble, which asset you can sell fast and keep sitting on cash to buy other asset…..you hedge or sit on cash like Warren buffet who is out of sync , waiting endlessly for opportunities that arrive and depart .🤔🤔🤔

  9. Very interesting. Thanks for taking the time to make and edit the video and share your thoughts.

  10. your a short scam artist and i heard they are coming to take your cheeks in palm hall in a few months.

  11. Trying to make sense of cryptocurrencies can be a bit overwhelming for investors. < It's a nascent but promising asset class built on technology that has the potential to disrupt a wide range of industries. For investors, what's probably most attractive is the possibility of life-changing returns. Don't worry, you're not late to the crypto party. We're likely still in the very early innings, leaving you with lots of time to put money to work and learn about this burgeoning market. If you're new to crypto then my advise is that you trade with the guidance of an expert. I have learned from alot of Youtubers especially my mentor Brian Donald., who taught me how to make trade and increase my portfolio to 19 btc lately.

  12. Yeah that’s the same guy who thought his garbage SPACs were going to the moon and that shorting apple was a great idea

  13. If the velocity of money is the number of times the average dollar changes hands over a single year.
    Then the FED is unlikely to keep interest rates elevated with the velocity of money continuing to make historical lows.
    By definition if few dollars are spent.. then they are saved.. Higher interest rates will exacerbate that problem…
    In conclusion: too few people are spending money .. my guess is that this is because most of the money is concentrated with a few oligarchs.
    So Just in case its probably best to buy Gold bricks with bitcoin passwords microscopically engraved on them. =)

  14. Someone is still listening to this Chamst guy, especially after saying he doesn’t give a shit about crimes against humanity and human tragedie happening in places far away from his golden couch? Scam of a man. I wish hanno to go bankrupt and experience a bit of such hardship

  15. BUY BITCOIN NOW – FOR FREEDOM !!! !!! !!! !!! CANADA WE LOVE YOU !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!! !!!

  16. I’ve been following his predictions since 2020 and he gets it wrong 50% of the time if not more. Worse than a dice. “Bitcoin to 1 million$” guys

  17. The fed didn’t overreact. Inflation can go on forever and economic crashes are a myth perpetrated to get people emotional so they lose money…. stop worrying and buy the freaking dip!

  18. Hey Cas, I was out of the market recently, in November cashed out. Now I’m back in all greed mode. It’s certainly dippers mentality that will prevail over time.

  19. Videos like this are meant to influence viewers to react the way the investors have intended them to. Bill Ackman is not the only one who wants to profit off you, all of them are.

  20. Now Should Be The Best Time To Buy And Trade on Bitcoin Because Currently The Profits Are Good And
    Going Up To A Standard Rate

  21. 10: 55 Anytime you hear someone “serious” say “Trump Derangement Syndrome” you immediately know they aren’t a serious person.

  22. Chamath is the new Bill Ackman. He’s shorting all the pump and dumps he’s been trumpeting. Scam Artist. Giving him oxygen is tarnishing your brand CA.

  23. Excellent points. Agreed. All of the year over year inflation numbers are being compared to a post covid shut down.

  24. You could talk and analyse the situation for hours on end but we all know what the outcome is the rich get richer and the poor get poorer !

  25. The market has been pretty bad until today it decided to surge. Everybody was practically crying then. It kept dipping. That’s what you get when you feel you can navigate the process on your own. Big thanks to Mrs Alexis Caballero. I’m not bothered with how bad the market is because my assests are insured due to her advice and I still receive my profits.

  26. Every time you hear asian people say bubbo instead of bubble you have to buy a dogecoin. Go.

  27. There is no such word as deacceleration. Acceleration is a change in the velocity

  28. Mrs Clarissa is legit and her method works like magic I keep on earning every single week with her new strategy

  29. Energy costs caused a world crash in the 70s ( crude oil sky rocketed) its happening again , too many countries need natural gas to allow their grids to work through winter. This not short term because there is more customers than gas supply, its also needed for fertiliser production also, fasten your seat belts its going to be a bumpy ride .

  30. Its odd to see people fear recessions. The economy goes up almost all years and every bubble has to correct once in a while. You can’t inhale inhale inhale and never exhale

  31. When comparing stocks it’s obvious there is a huge difference in price between stocks with the same metrics or stocks selling well below what there given metrics and vice versa.Micron and navidia is an excellent example.The ETFs are far too powerful in determining price for individual stocks.

  32. I like you. But Jeremy G is a broken clock, but Cathie Woods isn’t, just in the opposite direction? Lol stay consistent.

    Also Chamath is a con artist, straight up.

  33. 🤦‍♂️ stock crash when sellers are cheap … cheap selling brings valuations down . Is not rocket science … however ; the markets are deeply manipulated , is why Buffett is holding cash mainly .

    The markets have turned into a Casino … which means , someone is acting like the Casino House ….

  34. Raise rates been too low for too long over two decades of absurd purchasing power theft. Stock market at 36k is rediculous and only possible w massive government intervention and money printing. Essentially driving hyper inflation. They spend the money first and the rest lose in higher prices.