Now Wall Street is increasingly wary of stock market bubbles.
Previously Wall Street investors over-bet on Democratic presidential candidate Joe Biden to win the U.S. election, thus bringing financial risk to the market. Now Wall Street is increasingly wary of the stock market bubble, which has also sparked concern from all walks of Life.
After the new U.S. President Joe Biden enters the White House, investors will therefore face a very different change from the Trump administration in terms of taxes, government spending, trade and financial regulation. According to a previous Pew Research Center survey, 79% of registered U.S. voters said the economy is their top priority. With Biden and Trump’s economic policies vastly different, and in some cases completely opposed, the Biden Administration‘s policies will certainly affect the future of the U.S. economy and have a profound impact on the world economy.
During the past two months, the basket of “Biden stocks” created by JPMorgan Chase has been rising. Wall Street investors are actively betting on assets that will benefit from a Biden victory, including alternative energy stocks and marijuana stocks.
Financial analysts believe that Trump’s policies are good for Wall Street bankers in the medium to long term. In particular, over the past four years, the U.S. stock market has soared and Wall Street and Silicon Valley have made a lot of money. However, for a president like Trump who has almost no weaknesses, is maverick and unpredictable and uncontrollable, Wall Street and Silicon Valley are not like. For them, an old politician like Biden is easy to compromise. However, capital is profit-seeking and fickle, and capital is good at betrayal. When capital once found that the previous choice is wrong, it will quickly analyze the judgment, and then immediately adjust their direction.
Now, Wall Street is increasingly wary of the stock market bubble. The soaring share prices of some loss-making companies, the sizzling stock market and the follow-through of non-professional investors have all raised concerns.
On Jan. 26, Reuters reported that JJ Kinahan, chief market strategist at Demerit Securities (TD Ameritrade), said, “Trading right now requires a very large amount of additional risk compared to normal trading activity. This is not normal trading activity.”
Luft (Refinitiv) data analysis shows that this extreme blind optimism is also evident in the Russell 2000 index of small-cap stocks whose constituents have negative operating profits.
A team of Goldman Sachs analysts led by David Kostin wrote in the report that “various segments of the market have recently shown investor behavior consistent with the sentiment in a bubble scenario.”
Matt Maley, chief market strategist at Miller Tabak, said that it is not necessary to reach the bubble levels of 1999-2000 to see a significant decline, and that the market is now in a bubble and will fall.
In a recent Deutsche Bank survey, 90% of respondents said they saw a price bubble in some markets.
It is worth noting, however, that the close relationship between Wall Street and the Chinese Communist Party could also pose greater risks to investors.
Ren Chongdao, a researcher at the independent think tank Tianjun Political and Economic Research, pointed out that for more than two decades, Wall Street giants have allowed huge amounts of money to pour into the pockets of the Chinese Communist Party by selling shares of Chinese companies to U.S. investors. At the same Time, Wall Street has made huge profits by providing advisory services to Chinese companies on IPOs (initial public offerings), acquisitions of U.S. companies and real estate.
Moreover, Wall Street investment bankers know very well that in addition to bribing the relevant officials directly, they also do business in China through the children and relatives of these officials in secret. Some of the officials’ children have overseas study backgrounds and rich connections in mainland China, making them prime candidates for hiring by international investment banks. Behind these international investment banks making a fortune in China is a vast network of contacts, and the second generation of Chinese officials that they hire at high cost to charge for them and power to open the way for their success. Jiang Zemin’s son Jiang Mianheng and grandson Jiang Zhicheng, Liu Yunshan’s son Liu Lefei and others are all associated with international investment banks in the financial industry.
Last month, a video of a speech by Zhai Dongsheng, vice dean of the School of International Relations and deputy director and secretary general of the Center for Foreign Strategic Studies at Renmin University of China, was circulated on the Internet, in which Zhai admitted that Beijing authorities could not handle Trump.
Zhai Dongsheng said, “Previously, between 1992 and 2016, all kinds of problems between China and the United States can be fixed, all the crises, whether it is the Galaxy incident, or bombing the embassy, or crashed the plane, all the things, all the ‘bedside quarrel bed end together’, within two months to fix. “
Zhai Dongsheng said bluntly: “We have our old friends in the core circle of power in the United States!”
He also said that Wall Street had a very strong influence on U.S. domestic and foreign affairs starting in the 1970s. But Wall Street’s position declined after 2008, and more importantly, after 2016, Wall Street couldn’t handle Trump. During the trade war between China and the United States, Wall Street also tried to help, but it was unable to do so.
When talking about the current situation in the United States, Zhai Dongsheng said, “Now we see Biden coming to power …… traditional elites, political elites, the establishment, they are very close to Wall Street.”
And Zhai Dongsheng hinted that the Chinese Communist Party helped Biden’s son, Hunter Biden, set up a fund company.
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