Latest / Winning With Winans! / Financial Storm Warning? Ken Winans Explains What Could Trigger the Next Market Crash
Transcript
- speaker-0: Okay, I want to talk about my other article that just came out. ⁓ And it's, you know what? I'm not a doom and gloomer. of you know me. You know that I'm a historian. Sorry about that. I had to lay my papers down. But you know what? We have to remember that where we are right now, we're on the fourth year of a pretty powerful bull market. ⁓ And at some point, you have bear markets show up. And so I wrote my last Worbs article called Financial Storms. And I wrote it because I wanted people to start thinking about while the markets are hitting record highs, all of us should be thinking about what's next. So here's the thing. ⁓ There are certain things in the past that ⁓ and I'm by the way, it was interesting. You'll see it in the article. I went back to 1900 and I looked at the things that always set markets off. So No surprise, over leverage, borrowing too much, and ill liquidity, meaning the inability to sell, kind of like what's going on right now with private equity. You can't get out, that burst bubbles, whether it's real estate stocks, you name it, they've all been guilty of it. Also, Wall Street has always liked to invent stuff. Okay. So a lot of these new inventions, they don't work. They blow up. I mean, stock index features in 1987 was a big cause of the crash back then. ⁓ Investors responding negatively to government regulations and policies and overregulation, you know, all that good stuff. Military conflicts. That's obviously been a big part of the volatility this year. And then also just themes. We talked about ESG earlier in this thing. There's always these new themes. Wall Street keeps coming up with it to sell new products and whether or not they work or they don't work. Folks, the simple fact of the matter is we have several things coming up that I think we all have to watch very closely. No, I'm Again, ⁓ my job is to look ahead. I'm, you know, it's almost like, you know, you're you're driving in the fog and you've got to keep your eye on the road to see what's going on. I brought it up before, ⁓ and I just think it's important. We live in a state that is very well run financially by both Democrats and Republicans. A lot of states aren't. And I'm gonna bring up what I will call blue states, and the ones that are fiscally reckless, the big three are California, Illinois, and New York. You have people leaving those states, taxpayers leaving those states. They're still spending money like drunken sailors on leave. ⁓ you know, they think that it's just going to keep going forever. But I think that we can start to see some real problems in these states: school districts, revenue bonds, smaller municipalities, ⁓ that you could start seeing municipal bonds that are largely viewed as, you know, never go down, never lose value. Well, guess what? That could be a trigger for the next big sell-off. The other thing I talked about, sorry, I have to look at my notes here. I was I was in a flurry writing it. We talked about the Federal Reserve contracting its balance sheet. Hey, a lot of people don't know this about the 1930s depression. It wasn't the crash of the stock market. It was the contraction of money all through the 1930s that really did cause the Great Depression. We're not gonna re I'm not by no means, I don't think it's gonna be a replay, but we do have to be aware that when the Federal Reserve takes away the punch bowl. Which is what they're doing now, and they did starting in 2022. That means that there's the easy money, the day of zero interest rates, all that's over. We're gonna go back to normal things. So let's hope the Fed's good at contracting its balance sheet. Okay, something that I'm real big on. This 24, seven days a week trading of crypto and token, you know, tokens now that are be basically tokens of stocks, these prediction markets. I think they're gonna move into the stock betting pretty soon. You know, if for those of you who remember, we had these little micro flash crashes in in in 2010, 2011. I remember one point in time, Procter and Gamble lost like 90% of its value in 30 seconds and it came back. When you have 24-7 trading and no circuit breakers like you have on an exchange, I think that's a problem. That's exactly what went wrong in 1987 when we had the stock market lose 28% of its value in about 30 seconds. So that's a problem. ⁓ look. White elephant in the room, all this AI stuff. To me, I've been around a long time. This reminds me identical to what happened with the dot-com era. Look, 21st century technology is important to all of us, but the reality of it is not every single tech stock's a good investment. And many of these, when we finally have a washout on these things, a lot of them are not going to survive. another big area that I concern with, ⁓ the idea that there is more ETF products out there now. Than actual stocks in the stock exchange. That is a problem, my friends. That means that a lot of these ETFs, when people think, ⁓ I've got 20 ETFs in my portfolio, I'm diversified. Well, guess what? Those 20 ETFs probably own a lot of the same stocks. So you a lot of investors don't know that under the hood, they have massively complicated ⁓ positions. Listen, now we're almost out of time. I just want to say thanks again to our guests for coming on the show. And listen, if you're interested on being on Winning with Winens or w watching any of our podcasts, please go to winningwithwinins.com. You can look at all of our past episodes. My books are available on Amazon.com. My Forbes articles are available on Forbes.com under my name. Anyway, hey, and if you're interested in my company, go go to wininsinvestments.com and look at our track record, see if it's a good fit for you. Anyway, we're almost out of time. Good luck this week with your investments. God bless America, and I'll see you next week.