No Eggs Left Under the Fallen Nest
Even the last glimmer of hope has vanished. The most heard voice these days is that Bitcoin has decoupled from US stocks and is moving in its own risk-averse direction. My confusion at that time was that when US stocks crashed, gold also came down. It seems that this rate hike had a significant impact. Looking at Bitcoin and Ethereum, there was no fluctuation. I thought it seemed it couldn't fall anymore, but I still set a stop-loss just in case. However, because of this little bit of hope, that 'just in case' became real. What puzzled me was that my heart was calm, completely calm. Was I numb from the drop? Or did I get liquidated and come out of my shell? This rate hike reminded me of the previous ones. Let's take a look at the past stock market crashes!
2000-2002 Tech Bubble Burst
Time: March 2000 - October 2002
Decline: Approximately -49% (S&P 500), Nasdaq Over -78%
Reason:
Internet Tech Stock Valuation Bubble Burst
September 11, 2001 Terror Attacks Bring Uncertainty
Corporate Profit Decline, Confidence Crisis
Bull-Bear Turning Point:
Nasdaq Valuation Reset Completed, Federal Reserve Continues to Cut Rates
2007-2009 Global Financial Crisis
Time: October 2007 - March 2009
Decline: Approximately -57% (S&P 500)
Reason:
Real Estate Bubble Burst
Subprime Mortgage Crisis → Lehman Brothers Bankruptcy
Global Credit Freeze, Banking Crisis, Federal Reserve Forced to Rescue the Market
Bull-Bear Turning Point:
In March 2009, Federal Reserve QE1 Launched + Fiscal Stimulus
2018 Bear Market
Time: October 2018 - December 2018 (Trump's First Term)
Decline: Approximately -34%
Reason:
Trump Escalates China-US Trade War, Federal Reserve Raises Rates Four Times That Year, Conflicts Between White House and Federal Reserve
Bull-Bear Turning Point:
In January 2019, the Federal Reserve Turned Dovish, Paused Rate Hikes and Signaled More Flexible Policy
2020 Pandemic Bear Market
Time: February 2020 - March 2020 (Fastest Bear Market in History)
Decline: Approximately -34%
Reason:
COVID-19 Pandemic Triggers Global Economic Lockdown
Supply Chain Disruptions + Business Shutdowns
Panic Selling + Initial Policy Lag
Bull-Bear Turning Point:
March 23, 2020 Federal Reserve Unlimited QE + Fiscal Relief Bill Introduced
2022 Rate Hike Bear Market
Time: January 2022 - October 2022
Decline: S&P Approximately -27%
Reason:
High Inflation (CPI as high as 9.1%)
Federal Reserve Significantly Raises Rates (Benchmark Rate from 0 to over 4.5%)
Tech Stock Valuation Compression, Bond Yields Soar
Bull-Bear Turning Point:
October CPI Decline, Federal Reserve Signals Slower Rate Hikes (Q4 2022), Silicon Valley Bank Collapse
