A crash is way past due. From Charles Hugh Smith at oftwominds.com:
Generations of punters have learned the hard way that their unwary greed is the tool the ‘Smart Money’ uses to separate them from their cash and capital.
The game is as old as the stock market: the Smart Money recognizes the top is in, and in order to sell all their shares, they need to recruit bagholders to buy their shares and hold them all the way down. Once the catastrophic losses have been taken by the bagholders, then the Smart Money slowly builds up positions amidst the wreckage.
It’s easy to become a bagholder; all you need is greed. Been there, done that, for the siren songs luring bagholders to their ruin are compelling and numerous. The Smart Money doesn’t have to mislead anyone; all they do is let the strident super-Bulls talk up the riches to be had by all those who buy today and hold indefinitely, and human greed does the rest.
Siren songs to lure the unwary greedy include these classics:
1. The Fed has our back, i.e. the Fed will never let stocks go down, so there’s no risk in buying more shares today.
2. Innovation stocks can only go higher as they create new industries that are the future of the economy.
3. Institutional buyers are coming in, and that means prices can only go higher.