Ask HN: How likely are we to see a financial crash this year?
This year? Im not sure. So many highly dynamic realities in play. Lets look at them individually.<p>&gt;Inflation out of control<p>40% is locked in over the next several years. It&#x27;s virtually impossible for the fed to stop this reality. This means the current ~7% for the next several years. This is very bad but people lived through the 80s with 20%. The problem is that far more inflation is lined up but not locked in. The problem is that the fed just revealed their plan to reduce but the rate in which they plan to do it means far more than 40% will be getting locked in.<p>&gt;cost of living crisis, energy crisis<p>This is just inflation. It&#x27;s complicated but debt = money. If nobody had any debt, nobody would have any money. These things are only problematic because of inflation.<p>&gt;house prices are in a bubble(?)<p>Similarly there&#x27;s lots at play. Housing prices arent in a bubble. Go move to detroit and there&#x27;s a 6000 sqft 12 bed 4 bath for $79,000. <a href="https:&#x2F;&#x2F;www.realtor.com&#x2F;realestateandhomes-detail&#x2F;1631-Glendale-St_Detroit_MI_48238_M33489-51961" rel="nofollow">https:&#x2F;&#x2F;www.realtor.com&#x2F;realestateandhomes-detail&#x2F;1631-Glend...</a><p>This is not a bubble. What you are seeing is housing that is normal in a normal state. Sure there are problems in housing. Your problem is that the $ that housing is measured in has collapsed. It&#x27;s not the current inflation numbers but rather more real inflation that hasn&#x27;t been put on paper yet. This is probably around 200% or more inflation coming.<p>&gt; war in Europe that shows no signs of ending anytime soon.<p>A putin speech at the world economic forum from years ago about the war of all against all. Has everything to do with economics. The war in Ukraine is economics. <a href="https:&#x2F;&#x2F;www.cnbc.com&#x2F;2021&#x2F;01&#x2F;27&#x2F;russias-putin-warns-of-a-fight-of-all-against-all-at-wef.html" rel="nofollow">https:&#x2F;&#x2F;www.cnbc.com&#x2F;2021&#x2F;01&#x2F;27&#x2F;russias-putin-warns-of-a-fig...</a><p>What&#x27;s not in the news is far more important. Russia&#x27;s military seems to be pathetic. However, it&#x27;s not Russia vs Ukraine. Ukraine isn&#x27;t what matters in this.<p>&gt;I read an article* that speaks of a Bretton Woods 3 like event, and Biden himself mentioned the beginning of a &quot;new world order&quot; (again).<p>What&#x27;s most important isn&#x27;t the new world order. Sure, China and their capitalist zones with tremendously low taxes are going to put them into power. Eventually they&#x27;ll finish migrating their country away from communism. This &#x27;new world order&#x27; isn&#x27;t so much a problem for anyone except the USA. Soon the American people will actually feel their tremendous national debt.<p>&gt;I feel like the stock market has stopped reacting to real world fundamentals in any sense and just seems to continue its upwards march forever. Every correction being instantly bought up by all the free money washing around.<p>Lets say everything is normal, nothing exciting going on in the world. Inflation is 2%. All stocks will be constantly at peaks. It&#x27;s just the nature of how it works. Not being at market peaks is news worthy. Inflation being &gt;7% and stock market not hitting new all time highs is extreme news worthy. That plus extremely cheap debt for years now? The stock market should be struggling to breath for how high it should be.<p>This actually has significantly more to do with Gamestop and crypto than it does with inflation.<p>What the USA has done is unique in the world it seems. They made an absolutely crazy rule that you can naked short a stock and you have 2 days to deliver the stock later on.<p>That&#x27;s not how a short works. A short requires someone at your broker or similar to have a stock and you &#x27;borrow&#x27; it to sell it and later have to buy to give it back.<p>The big thing about gamestop during covid said they were closing tons of stores. They were going to lose a ton of business. On top of that, they had just expanded and bought thinkgeek. They were going to take a big hit during covid. Shorting them made sense but they got shorted a little too much. There were more shorts on record than total stocks. It means you can buy the stock and short squeeze them. They would be utterly forced by law to buy at any price and lose bigtime. And they didnt... they basically said SEC come at me bro. The SEC didn&#x27;t seemingly do anything.<p>It broke the stock market. On paper the gamestop stock should basically be at infinity price. Right now, the stock market is in limbo. The SEC can&#x27;t move on it. Eventually it will break. Largely speaking the banks went around the exchanges and are completely screwed.<p>So what these large american banks are doing right now is robbing retirement funds. This is much larger than the reality of inflation being way over the bond rates. Which largely speaking means most retirement funds are not solvent right now in the USA.<p>That&#x27;s the point of gamestop. Gamestop the store doesn&#x27;t matter in the least. This could be happening to any stock.<p><a href="https:&#x2F;&#x2F;www.computershare.com&#x2F;us&#x2F;news&#x2F;computershare-acquires-wells-fargo-corporate-trust" rel="nofollow">https:&#x2F;&#x2F;www.computershare.com&#x2F;us&#x2F;news&#x2F;computershare-acquires...</a><p>This was announced today. Wells fargo&#x27;s dark pool basically just died to gamestop. But worse... computershare just got handed far far more than gamestop. People who think they are about to retire are in reality decades away from retiring.<p>This is not that unlike the bear sterns situation.<p>Here&#x27;s the thing. The people who are holding gamestop directly. They could sell. They could let the stock drop back to near $10. That would let these US banks off the hook, but they don&#x27;t care and don&#x27;t need to sell. Their stocks are currently worth infinity money. They dont have to sit on it forever. When the Federal reserves starts selling their &#x27;assets&#x27; and more people are drawing from those retirement funds. These banks will have their hands forced. This goes down within the next few years for sure.<p>This is a gamble for sure. I dont own a single stock in any of these meme stocks.<p>So where are we at here? Will there be a financial crisis again? 100% certain within a few years. Will it be this year? No idea.