We’re Heading For The 1999 Crash All Over Again
They say history repeats itself—well, the market looks a whole lot like the 1998-1999 stock market bubble which led to the 2000 crash, and that’s history we’d rather not repeat.
To recap, in 1998-'99 a US recovery was interrupted by a crisis in emerging markets, leading policymakers to ease monetary policy. This fresh liquidity mixed with negative investor sentiment morphed into an equity bull bubble that pushed valuations and interest rates up until they popped, Business Insider reports.
Today’s market has eerie similarities: China’s slowdown sparked fears in emerging markets, the winter stock selloff led to some of the worst investor sentiment in years and interest rates are about as low as they can go.
But there are important differences—the emerging market situation isn’t as bad as it was in the late '90s and the Fed hasn't eased rates this time around. Let’s hope those differences are enough. [BI]
