“We have these periods every six, eight, ten years, and there are plenty of excesses.” ~ Henry Paulson – before the 2008 stock market crash. (Too Big To Fail)
Are we seeing the beginning of a new stock market crash? While the last Stock Market crashed happened in the United States, back in 2007, there are more and more evidence that the next one will happen in Asia.
On Friday 16th of August 2013, while here in Mauritius we were getting ready to party, $91,324,230 was wiped out in one trading session in India. The Sensex dropped 4%, loosing -769 points, the biggest drop in two years on fears of Tapering from Ben Bernanke. The Shanghai Composite Index lost 8.16% since the month of May, on the fears of a new housing market bubble popping and new credit crunch.
A new market crash is supposed to happen within this year 2013. First of all we have this cycle of Bull / Bear market every six years. The last Bear market started back in 2007 and we are already six years from the last crash. The global stock market is like a patient under life support where here life support is Central Banks who is printing lots of money to stimulate the economy. The Federal Bank of the United States spends $85 billion every months to buy bonds and each time Mr Ben Bernanke starts to talk on one of these FOMC meetings, all the stocks market globally goes in a volatility phase, often loosing / gaining as much as 5% in one trading session. As we are getting closer to September and the fear of Tapering from the Federal Bank gets closer, we live in a constant fear that we are just days or weeks away from the next stock market Crash.
Secondly we have the year of the Serpent. According to the Chinese zodiac, during the last year of the Snake, the 2001, the Attack of the Twin Towers happened in America. Before that, during the same year of the Serpent, Pearl Harbor was attacked. So far this year, we had the Boston Bombings, but the Chinese Zodiac does not change until 30th January 2014.
I am in no way predicting a Stock Market crash. I am just an investor, I just buy lows and sell at highs. Not sure how a crash on a foreign market can affect the Mauritian market, but it happened back in 2008, it may happen again. Although evidence of a new stock market crash keeps popping every day, we just stand and wonder if the global economy can withstand another crash.
