Is a 1987 Stock Market Crash Coming? THE SHOCKING FACTS

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Hello.

Jeffrey (0:31)

Look what TJ Maxx dragged in.

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Michael Zuber (0:51)

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Michael Zuber (1:02)

As we discussed earlier in the week, every time, at least the last 16 times, the 10-year note has ramped up this quickly, something has broke.

We need to think about the fact that we might be on the cusp of something like the 1987 flash crash, which was initiated by long-term capital management. Basically, a hedge fund that was levered the wrong way became a forced seller. This is something that recently happened at a much smaller scale by this social something hedge fund, Leopold, as I remember. It is just interesting to look at how short the market is, how much leverage is in the market. And I have to ask Dan, are we set up for another 1997 Black Monday crash event? What do you see in the data?

Jeffrey (1:54)

I haven't studied that lately, but you pretty much summarized it pretty well. I think there's always a chance that hedge funds get over levered, especially when the market goes up.

Michael Zuber (2:06)

In the wrong way, yeah.

Jeffrey (2:08)

In the wrong way when the market goes up, like it has been.

And then, something that breaks the market, like interest rates going, well, I'm not going to say interest rates going over 5% because that's actually normal. 5% is not high.

Michael Zuber (2:25)

Historically speaking, it's right around there.

Jeffrey (2:26)

You could argue that it's low, that it's still low.

So in 87, interest rates were, I think, much higher than that. I think the point is the rate of change.

Michael Zuber (2:36)

That's exactly the point, the rate of change.

Jeffrey (2:39)

So how quickly it gets there?

Michael Zuber (2:41)

Yeah, I mean, just think about the last time we saw rate of change in the 10-year move.

We don't even have to go back that far. We can just go back to the Jackson Hole speak by Powell saying pain is coming. And I think it was nine months later, we lost Silicon Valley Bank. Right? Same thing, right?

When the 10-year note rate of change accelerates and goes exponential like it did last week, Wednesday, Thursday, and Friday was a sight to be seen in the 10-year, something breaks. You never know what it is. And we could be on the cusp of the 10-year continuing to run. And we don't know what will break, but something will break, history says.

Jeffrey (3:19)

Yeah, that may be true. We'll look at the charts here in a second. We can actually take the 10-year and go back and see what it looks like going backwards in time. It definitely went up. It broke the 5% ceiling that's been hit in 2023

Yeah, and it went right through that, and no signs of stopping, actually. So they still continue to go higher. There's some really interesting correlations that I'll show you today also.

Michael Zuber (3:48)

Yeah, we can't wait to see it. I think the 10-year note is the story, certainly the story of the week may be in the story of the month. But don't worry, folks, we have some good news also. We will talk about S&P 9000

Obviously, we'll hit the 10-year inflation in jobs. So we'll talk about, dependent on a stock market crash, but also S&P 9000 in 2027 So right around the corner. Jeffrey is just an outset. Wow, we're talking 8000, and people are already at 9000

This is gangbusters territory. So let's start with the 10-year, show your website, all that good stuff. But we will also touch on S&P 9000, because again, just buy the F-ing dip. That's what people are saying.

Jeffrey (4:29)

BTFD, baby.