Name: Massive Crash Ahead - The Stock Market Will Crash Again
Uploaded: 2020-07-30T09:47:13.000Z
Duration: 10 min 56 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The 2008 crash was the most severe economic and financial meltdown since the Great Depression.

Millions of people lost their jobs, thousands of businesses declared bankruptcy, and the

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stock market crashed so badly that it was the largest point drop in history.

Luckily for us, the economy recovered, and we experienced the longest economic expansion

The next financial crash on a horizon, but the fed did a good job of postponing it; however,

The economy is officially in a recession, and it seems like it's going to be long and

In order to figure out how to prepare for it, we have to understand a few things.

Why is the stock market rising when dozens of millions lost their jobs?

And what can we do to prevent it from sliding into a depression?

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A recession is when there is a decline in economic activity or negative economic growth

for two consecutive quarters or six months.

At the start of the year, when COVID 19 hit the world, US GDP fell by 5 percent.

Now, since we are done with half of the year, the National Bureau of economic research officially

Many economist predict a double-digit decline, which we haven't experienced since the 1950s,

and if the year ends with double-digit negative growth, it's going to be a depression that

can be compared to the great depression of 1929 that lasted ten years.

In 2008, the housing market crashed because banks provided mortgages to people who did

At some point, they defaulted on their loans, which resulted in a crisis that took down

The government intervened and bail out many companies, and out of sudden, the crises was

But What makes this crisis different from all other crises we have ever experienced

is that the modern economy depends on consumption to keep running.

Even if the government injects billions of dollars into the economy, the effect is going

to be limited since businesses had to close down.

What most people find strange is that why in the middle of this Chaos, when GDP is hitting

a record low, why on earth the stock market is rising?

Shouldn't it be declining with the rest of the economy?

Yes, of course, all these companies that are listed on the stock market are an essential

Still, just because the economy is down doesn't mean the market should be down as well, and

The stock market is determined by what investors think is going to happen in the future.

The economy can be in a horrible position now.

Millions can lose their jobs, but if investors believe that throwing their fortunes into

the stock market will keep their fortunes safe, then the market will be rising.

Let's say you are the head of a hedge fund manager that manages 50 billion dollars.

Like everyone else, you realize that the economy isn't in good shape.

A logical option would be to liquidate your assets and invest somewhere else or just hold

But what if the government says "no matter what happens, we are going to bail out these

huge corporations as we did back in 2008".

All out of sudden, investing in the stock market becomes risk-free since someone out

there ( THE FED) with a printing press will print as much money as needed to prevent these

Secondly, we already have a testable vaccine in the process.

It's only a matter of time before the vaccine against this virus will be ready.

It might take us another year, maybe 2, but eventually, we will get over it, and life

will get back to normal, at least to a certain degree, so the future is safe.

And thirdly, today, tech companies make up the largest portion of the stock market.

The top four 4 US companies each valued at over a trillion dollars are all tech companies,

And the current pandemic isn't an obstacle for them amazon took advantage of it and rose

Just because there is a pandemic in the street, doesn't mean people will use google less.

On the other hand, if you take the total valuation of all airlines, it will amount to around

50 billion dollars, not even 1/10 of Microsoft.

So if the entire industry disappears overnight, it won't make a huge difference in the stock

What we are all waiting for is a vaccine.

There is so much misinformation happening on the internet that its difficult to find

out when we are going to have one exactly.

When the outbreak started, the world rushed to create a vaccine, and we beat the record

and created a vaccine in 62 days, which is mind-blowing.

But we cannot use it until its proven successful.

Typically the researchers start testing the vaccine on animals.

Once it proves to be safe after a wide range of testing on animals, we finally move to

stage two and start testing it on humans.

But before the public could use it, it must be tested on a large enough sample, people

from different age groups, genders, races, and so on to be confident that it is completely

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Massive Crash Ahead - The Stock Market Will Crash Again

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