I keep thinking about that part in The Big Short when the investors were waiting for the housing market to collapse. Defaults were rising, the data was clear, but nothing was happening. The banks weren’t lowering the value of the mortgage bonds, and the credit rating agencies weren’t downgrading anything. The investors were sitting there wondering, why hasn’t this fallen apart yet?
That feels a lot like what is happening right now with the trade war between the U.S. and China. Tariffs are increasing, supply chains are clearly under pressure, and companies that rely on Chinese imports are getting hit. Still, the market keeps going up like everything is fine.
Back in 2007, the people in charge did not want to admit how bad things were because they were part of the system that would lose if the truth came out. Today, it feels like big companies, the government, and Wall Street all want to avoid facing what is actually happening.
I am not saying a crash is coming for sure, but it does feel like something is off. The numbers show stress, but the market is acting like it is not there. Just like The Big Short, the people paying attention are starting to wonder if they are the only ones seeing it.
Does anyone else feel this way? What signs are you seeing that the market might be ignoring? What would it take for the system to finally react? I would love insights from people who watched it happen in real time.