Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you.
Posted on 03/05/2026 9:00:16 AM PST by Angelino97
I have argued that the current economic environment has a lot of eerie parallels to 2007. We have extremely high asset valuations, the economy is loaded up with debt, and monetary policy has taken a similar trajectory, with easy money blowing up these bubbles. We even have characters like Larry Kudlow talking up the economy just like they did in 2007.
I'm not the only one who sees these concerning parallels. JPMorgan Chase CEO Jamie Dimon recently said elevated asset prices and an increasingly competitive banking environment, pushing more credit, remind him of the pre-2008 financial crisis years.
"My own view is people are getting a little comfortable that this is real, these high asset prices and high volumes, and that we won't have any problems whatsoever."
But he warned that the cycle will inevitably turn.
"There will be a cycle one day … I don't know what confluence of events will cause that cycle. My anxiety is high over it. I'm not assuaged by the fact that asset prices are high. In fact, I think that adds to the risk."
Dimon is increasingly concerned about rising levels of debt. Even as government, consumer, and corporate debt are at record levels, the banking industry is scrambling to make more loans, feeding the growing Debt Black Hole. He said that he sees many lenders loosening standards in pursuit of profit, like the run-up to the 2008 financial crisis.
"Unfortunately, we did see this in '05, '06, and '07, almost the same thing. The rising tide lifting all boats, everyone was making a lot of money, people leveraging to the hilt. The sky was the limit."
The sense that everything is great incentivizes more risk-taking.
"I see a couple of people doing some dumb things. They're just doing dumb things to create NII (net interest income)."
Loose standards lead to bad loans. Bad loans create malinvestments. Malinvestments ultimately unwind, perpetuating a crisis. In 2006 and 2007, it was artificially low interest rates coupled with a government drive to increase homeownership that blew up a real estate bubble. Dimon said he wasn't sure what would precipitate the next crash, but there is always something looming on the horizon.
"There's always a surprise in a credit cycle. This time around it might be software because of AI."
Dimon conceded that it's easy to get caught up in market mania.
"You feel stupid when everyone's coining money and everyone's great … it does feel really good. And then when I think about all the factors taking place. I take a deep breath and say, `Watch out!'"
The Economy Never Reckoned with the 2008 Mistakes
On top of the similarities between 2007 and today, there are parallels to 2019 that should also raise eyebrows.
In the wake of the 2008 financial crisis, the Fed cut rates to zero and held them there for seven years. The central bank also bought more than $3.5 trillion in bonds via QE, bloating the balance sheet and injecting trillions of newly printed money into the economy. This fed the massive increase in asset valuations and debt that Dimon is worried about today.
The Fed didn't lift a finger to normalize monetary policy until 2015, and it didn't begin in earnest until two years later.
Even with only modest monetary tightening, the economy began to crack. The stock market tanked, and the economy got wobbly. It quickly became clear the central bank couldn't normalize interest rate policy without crashing the economy, so it gave up. The Fed was forced to cut rates three times in 2019 and resume QE, just like today.
The pandemic bailed the Fed out in 2020, allowing the central bank to slash rates to zero and take QE to unprecedented levels. This kicked the can down the road, giving the easy money-addicted economy a surge of its preferred drug, and keeping the inevitable crash at bay.
Were it not for the massive monetary injection during COVID, the economy would have likely gone into a deep recession to cleanse the monetary excesses of the Great Recession. Instead, the pandemic allowed the central bank and the government to double down with stimulus, delaying the inevitable.
The reality is that the economy has to have its easy money drug. Without it, the addict goes into painful withdrawals.
The Fed (the pusher) has begun to dribble the monetary heroin into the addict's veins. The problem is, over time, it takes more and more of the drug to maintain the high. Eventually, the druggie will OD.
No matter how this plays out, we're looking at an increasingly inflationary environment. The money supply is already growing at the fastest rate since July 2022, in the early stages of the tightening cycle, and the pace of money creation will increase as the Fed continues QE (without calling it QE). We will also likely see additional rate cuts. That means you can look forward to the purchasing power of your dollar declining even more rapidly.
Of course, this will also add even more fuel to the fire Dimon is warning about.
Plan accordingly.
|
|
Click here: to donate by Credit Card Or here: to donate by PayPal Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794 Thank you very much and God bless you. |
Interest rates should get cut....inflation is where it need to be.
Right on cue, elitist telling us how an improving economy can only be bad.
I am sure there is no deceptive bias in his prediction.
jamie is paid to worry: he worries that when things are good, they might sooner or later turn less good, and when things are bad, he worries how long it will be before they turn good again ... personally, i wouldn’t worry about it ...
Yeah.
The setup man.
Means they retreat into cash and then cause the fall.
Scoop up the cheep stuff from the wreckage, just like 2012.
The interest rate on a Series I savings bond changes every 6 months, based on inflation. The rate can go up. The rate can go down.
The overall rate is calculated from a fixed rate and an inflation rate. The fixed rate never changes. The inflation rate is reset every 6 months and, therefore, so is the overall rate.
Current Interest Rate
Series I Savings Bonds
4.03%
This includes a fixed rate of 0.90%
For I bonds issued November 1, 2025 to April 30, 2026.
https://www.treasurydirect.gov/savings-bonds/i-bonds/
All the while, telling his minions to short the market. He's a fckn con man IMO.
2008 was a manufactured crisis for the benefit of anti-American interests.
Somebody with a lot of investing acumen, and even more money, found a weak spot (mortgage backed derivatives) in the financial sector and wedged it into a crash.
That’s one way the Democrats win elections. They did something similar in 1992.
As of early 2026, Dimon’s estimated net worth is approximately $2.8 billion. Good gig Jamie.
There will always be risk in stock investment and uninsured bonds. The most fundamental strategy for reducing risk in the market is diversification, famously described by Nobel laureate Harry Markowitz as "the only free lunch in investing." Rather than attempting to pick a single winning stock, sage advice dictates spreading capital across various sectors, market capitalizations, and geographic regions. This reduces "unsystematic risk"—the risk associated with a specific company or industry.
Personally, a mix of low-fee ETFs (S&P500, Consumer Staples, High Dividends) plus CDs and govt bonds gives me balance and lessens risk. Right now, I need to rebalance to reduce market exposure, which is currently 70% of my investments.
Wow… such brilliant insight… especially as none of these top men saw 2008 happening.
But he’s got perfect hindsight now.
Never trust a person who makes money from others misfortunes.
Watch Private Equity. They’ve made some stupid loans.
bttt
I agree.
I think its pretty clear the market is going to correct, how much is the question... however, that’s not the same as 2008, where fraud was just rampant in Real Estate and many big players were exposed.
AI Bubble is going to pop at some point as well.
Though like I said a 2008 situation? I don’t think so, we shall see.
No, the crash was because the GREED for mortgage backed securities was so insane people who had no business getting mortgages were approved and the people making the loans didn’t care because they simply sold them to the greedy folks looking to buy them.
It wasn’t going to harm them when they didn’t pay, they never intended to service the loan, just get it made and sell it off.
It was insane, people who had never paid a bill on time in their lives with 500 credit scores could get into houses that were 5 times their annual incomes without blinking an eye.
Blah blah blah Trump bad
1. The article says nothing about Trump.
2. Just because Trump is president doesn't mean we must pretend problems no longer exist. This nation's economy has many structural problems that are decades in the making (e.g. national debt, unfunded entitlements, deindustrialization), and beyond the ability of any president to correct even in two terms.
Ah, manufacturing is up.
We are building non-government jobs.
I don’t see the parallels.
Frankly, the only thing I see is liberals telling everyone the economy is going to crash like a bunch of ‘Chicken littles’ believing if they say it enough it will happen. Fundamentally, the economy looks NOTHING like 2008.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.