Soros Worries About 2008 Repeat
The billionaire investor George Soros has warned investors that the current market conditions are similar to conditions last seen in 2008. This of course is worrying to investors because 2008 and 2009 were such bad years for investing and for the economy as a whole.
There are two major things in the economy that are still bothering Soros about this market. One of the things is what is hitting the news wires every day. That is the Chinese economic problems. In the last few days the Chinese stock markets have tumbled so much in a single day that the operators had to use newly installed circuit breakers. These are measures that are only supposed to be used when there is a major run on the stocks within the market. As such, it is troubling to have seen those circuit breakers used twice in the last two trading days.
The other thing that Soros has said he is worried about is the Greek debt crisis. Bloomberg reports that Soros has stated that the Greek debt crisis is a worse situation than the housing market crisis during the 2008-2009 recession.
Other experts in the markets are not yet calling for a recession, but they rarely get that worried about how things are doing. You will see many so called experts say that they called for a recession after the recession is already over.
Organizations such as the World Bank have already cut the growth forecast for the economies of the world from 3.3% down to 2.9%. That may not sound like a big drop, but in terms of what that represents for the entire economy of the world, it is a rather large number. It goes to show that the World Bank is concerned with growth levels as they relate to this year.
Some important market indicators are pointing towards rough times ahead. Consider for example the manufacturing ISM indicator which fell to 48.2. According to The Economist, if this indicator falls below 50 it is a sign of trouble in most cases.
At this point it seems to be the consensus belief that the stock market is destined to take a fall in 2016. The main question is just how bad the fall is going to be. Soros has taken the pessimistic view that the market could well be set up for a 2008 style collapse. He has made billions of dollars trading in the markets and being directly involved. It may be worth taking some time to see what he has to say about what is about to happen.
There are no guarantees in the market, and it is not official that the market will fall just because George Soros believes that it is likely. However, it is one opinion that deserves more weight than some of the others out there. At least his opinion is based on real data and real things happening in the economy. He is not the only one who believes that this is the reality we are about to experience, so take note.