Get ready for a rollercoaster ride in the financial world as three major bubbles – housing, debt, and the stock market – teeter on the edge of uncertainty. The U.S. debt clock is ticking towards a staggering $46 trillion by 2028, and Treasury Secretary Janet Yellen’s plan to borrow $760 billion in the first quarter raises eyebrows.
Simultaneously, tech giant Nvidia is soaring to new heights, surpassing the entire Chinese stock market. But NYU’s finance guru, Aswath Damodaran, warns that Nvidia might be riding the overpriced wave, drawing parallels to the Dotcom Bubble and highlighting key differences that make today’s situation potentially more precarious.
The financial landscape seems poised for turbulence with a significant portion of the Nasdaq Composite comprising penny stocks, record call option volumes, and the curious case of housing affordability. The big question remains – which of the three bubbles will burst first, shaping the financial future in ways we can only imagine.
Sources:
Biden Treasury Secretary Janet Yellen says the U.S. will "borrow $760 billion in the first quarter" pic.twitter.com/NZ9UQlcqia
— Win Smart, CFA (@WinfieldSmart) February 8, 2024
The US Office of Management and Budget has said they see a deficit at 5%+ of GDP through 2033.
This means that a budget deficit of $1.4 trillion is expected in 2024.
By 2033, projections show that deficit spending will equal 6.9% of GDP.
There have only been 5 times in US… pic.twitter.com/XNjzES9et5
— The Kobeissi Letter (@KobeissiLetter) February 9, 2024
— Win Smart, CFA (@WinfieldSmart) February 9, 2024
The Dotcom Bubble happened because GDP growth was strong, liquidity was ample, and investors got over eager about a transformative new technology: the public-facing Internet.
Why did it burst?
Very simply, investors started to realize that they had dramatically overestimated…
— RJR Capital (@RJRCapital) February 9, 2024
🚨JUST IN: Nvidia's now worth as much as the entire Chinese stock market (represented by the H shares of the Hong Kong stock market)
Incredible. pic.twitter.com/dft2YMhmYM
— Genevieve Roch-Decter, CFA (@GRDecter) February 9, 2024
Sound familiar? Company made no money but said asset prices were inflated due to interest rates.
until they weren't pic.twitter.com/gjCGNF6vJW
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) February 9, 2024
"US small-caps are extremely undervalued versus large-caps." pic.twitter.com/scW7qVmoCT
— Win Smart, CFA (@WinfieldSmart) February 9, 2024
Nobody:
Not a single damn soul:
Sam Altman:
I need $5-$7 trillion for my new AI chip project pic.twitter.com/926BH92Tap
— Genevieve Roch-Decter, CFA (@GRDecter) February 9, 2024
One-sixth of the Nasdaq Composite is now made up of penny stocks, per BI.
— unusual_whales (@unusual_whales) February 9, 2024
For those wondering how NVDA can continue going higher every day, consider that the top performing ETF year-to-date is a 2x futures-levered single stock ETF (NVDX). Combined with record call option volume.
Making Nvidia the most juiced stock in market history. pic.twitter.com/8P5IWrDoT5
— Mac10 (@SuburbanDrone) February 9, 2024
US housing occupancy hits lowest level since 2013
Buckle the fuck up, there was never a housing shortage pic.twitter.com/Dmubk0n1RP
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) February 2, 2024
Housing units per capita are at all time highs and increasing. There will likely be shortages in areas with constrained supply, but overall there is plenty of housing. pic.twitter.com/ASB4mIQghz
— David Van Voorhees (@FD_Van_Voorhees) February 19, 2023
Here's this modest starting home……listed over 2x higher than a MEDIAN income family can afford LOL pic.twitter.com/jjcRjMEzYX
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) February 9, 2024
Everyone ready for 30 years of rising interest rates 😜 t.co/WxRVwcUwKP pic.twitter.com/LCguIT968u
— Financelot (@FinanceLancelot) February 9, 2024
$VIX volatility rising 👀
— Jeremy (@_Jberg_) February 9, 2024