David Stockman: It's 'Damn Near Impossible' To Avoid A 30-50% Market Correction

To better understand the current economic environment we find ourselves in, it helps to better understand how we ended up here.

And few have as detailed an understanding as today's guest, who has been a true insider in both Washington DC and Wall Street for his extremely long & accomplished career.

We're fortunate today to speak with former Congressman, economic policymaker & financier, David Stockman.

He warns that "everything is overpriced" that it will be "damn near impossible" to continue the current high levels of deficit spending without restoking inflation.

It would not surprise him to see a 30-50% downwards correction in financial asset prices begin next year.

#federalreserve #debtcrisis #deficit

00:00 Why Today's Debt Load & Deficit Spending Are Totally Unsustainable
13:55 How The Correction Will Progress
27:28 Why The Fed's Hands Are Tied
31:30 2025 Will Be Rough Year For Markets
38:45 Liquidity Challenges Will Increase From Here
45:48 David's Recommended Positioning For Investors
49:00 The Next Bear Market Will Last For Years
_____________________________________________

Thoughtful Money LLC is a Registered Investment Advisor Solicitor/Promoter.

We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.

We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor in good standing with the Financial Industry Regulatory Authority (FINRA) who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.

IMPORTANT NOTE: There are risks associated with investing in securities.

Investing in stocks, bonds, exchange traded funds, mutual funds, and money market funds involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.

A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.

Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.

Copyright © 2024 Thoughtful Money LLC. All rights reserved.

[GaryNicka]

The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?

[Elliott]

For the Newbie if you are actually trading in the crypto space and you don't have a sound mentor. Then you are certainly going to get liquidated in 90% of your trades. Yeah that's sad truth. I remember when i just got into crypto back in 2019 but later in 2020 i ended up selling it because i have lost alot trading all by myself without a guide. Got back into crypto early in 2023 with $100k and I'm up with $732k in a short period of time. Thanks to Seren Wintersun.

[janejohndoe]

Stockman forgets one thing: Bernanke got the Nobel for figuring out how to print $$$ without causing inflation. (1) Use the printed only to buy assets. (2) Define consumer inflation such that it excludes asset inflation as much as possible. The only place where asset and consumer inflation meet is housing, that's why they invented the "super-core" inflation which excludes housing. Therefore, it is perfectly possible to print insane amounts of money without causing "inflation" (wink, wink).

[icucmerc]

Don't simply retire from something; have something to retire to. Start saving, keep saving, and stick to investments

[randyosborne]

Our Congress is for sale. On the take. BOTH PARTIES. They have replaced the Free Market.

[jaykraft]

Stockman talking about the market correcting 50% for 10 years now. He missed the run-up.

[WilliamLocke-ylon]

*Amazing video, you work for 40yrs to have $1M in your retirement, meanwhile some people are putting just $10K into trading from just few months ago and now they are multimillionaires*

[David_F]

He's been bearish for years - was calling for a 40%-50% decline .... when the markets were 60% below where they are now.

[DevanAsher]

Given the current volatility of the stock market, I believe investors should concentrate on undervalued stocks. This is because 20% of my $75k portfolio is made up of once-respected stocks that are now in decline, and I'm not sure where to turn.

[gofish]

Stockman.. use to be a member 10+ years ago.. he has been wrong for ever since I can remember. If you followed him you would have missed the entire move since 2009.. he is an extreme perma bear

[simmonds]

Wow! This guy talked for 10 minutes straight right out of the gate without even a question posed.

[AW-umjg]

Please bring a bull on the show to add a different perspective. A lot of bears lately, who are probably right, but be good to hear from someone who can present a different perspective.

[curtgomes]

It seems like every time we get predictions of a stock market correction the market goes to new all time highs. It's become a contrarian event in reverse....

[HieouyaAgnèsDoyo]

!!!I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $2m+ before retirement

[michaeljacobs]

I was a around 13-14 but precautious about this stuff and remembered Volker clearly, and also the inflation and subsequent recession that followed V-man as it was a major factor in tanking my dad's business. We have to take serious as a heart attack the anger of the public over this, it is one big factor fueling Trump, and short of a depression these prices and anger level are not coming down soon. Thanks DC and Fed!

[robertbender]

Excellent assessment by David. Bring him back again

[tatersquad]

More taxes? Great, that'll help. The problem isn't that we're not taxed enough, it's the spending. How is this even a debate?

[johnminichielli]

The central banks are the buyers of last resort, and like Japan which has over 2X the debt to GDP of the US, the FED will buy everything in sight to keep rates low. If they don't, as Stockman points out, the country goes bankrupt.

[Johnathan_Knowles]

Actually, news does impact the market (news events are what triggers the herd initially to react emotionally with predictable outcomes). Yes, just like the black swan was not known months ahead of time, but many are missing an important detail. The market crashed because, we failed to break the previous swing high. The reason we failed is specifically because of the black swan event. Had the event not occurred, we would have broken the swing high, and the crash would not have happened. Effect cannot actually precede cause, even if that is a useful heuristic when analyzing a chart to find patterns to focus I have managed to grow a nest egg of around 100k to a decent 432k in the space of a few months... I'm especially grateful to JinnyFranz’s, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.

[mountainpeople]

SP500 -30-50% would deflate the system. Therefore it will be fought at all cost. Deflation is no longer an option here.