Those who do not learn from history are bound to repeat it.
The financial market history is replete with the boom and bust cycles. There are periods of exuberance when investors throw caution to the wind. Pursuit of gains becomes the primary focus as the investors are blinded by potential profits and ignore the growing risks in the markets. These periods are followed by a swift correction in asset prices and a period of time when the asset prices adjust to the reality. In many cases, the correction can lead to a recession when the economic activity declines and resets.
We are on the record stating that 2019 is one of these dangerous periods where the economic recession is very likely to start. Some economists now believe that the recession may have already started. In fact, in addition to the reasons we have outlined in the above mentioned article, today comes the news that the manufacturing activity in the US has contracted for the first time in 3 years. We also pointed out earlier how the trucking industry in the US is suffering a significant distress this year, after a very prosperous year in 2018. Transportation sector is a part of the value chain for manufacturing and is a leading indicator of the economic conditions.
At this time it is instructive to look back at the past financial bubbles we have seen around the globe, and perhaps learn some lessons from them. The following infographic comes to us from the website Fortunly (see the original article on the Fortunly.com) and is reproduced here with permission:
Reproduced with permission. Original at https://fortunly.com/infographics/historical-financial-bubbles-infographic/
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