Economist Alex Krüger Warns US Stocks Could Repeat 2008 Bear Market Amid Trump’s Trade War
A broadly adopted economist thinks that President Trump’s commerce struggle can set off situations that would catalyze a repeat of the 2008 inventory market meltdown.
Economist Alex Krüger tells his 208,600 followers on the social media platform X that Trump’s tariffs are creating situations that would spark a brand new credit score disaster when debtors can’t entry credit score simply regardless of their willingness to pay curiosity.
Krüger says that when lenders lose the boldness to problem new debt resulting from an unsure macroeconomic backdrop, the S&P 500 might witness a 2008-style collapse.
“That is how the 2008 bear market seemed like, -50% in a single 12 months. Discover the in depth variety of extraordinarily constructive information from October onwards. Generally, rising liquidity just isn’t sufficient.
As soon as credit score markets break, it is rather arduous to cease the snowball.
We could also be two tweets away from getting in that path. Europe retaliating in sort, and Trump dropping it.
After all, [we] would wish greater than that to have such a protracted bear market. 2008 was a credit score crunch in any case, which isn’t the case now.
However a commerce struggle can set off a credit score disaster. Stagflation => client spending freezing => corporates blowing up => banks blowing up => lifeless.”
He additionally believes that Trump’s tariffs have increased the percentages that the US will witness a recession inside a 12 months.
“If this retains escalating, sure, something is feasible now, that’s what’s modified in my view, there’s nothing off the desk.”
As of Monday’s shut, the S&P 500 is buying and selling at 5,062 factors.
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