A reader left a long comment on the Seeking Alpha version of our post about the financial problems awaiting Generation X that included the following list of worries that could hold the equity market back.
- Russia taking back the original USSR and eastern Europe
- China going after Japan/Taiwan
- Israel and its ongoing escalation with Iran, Hamas, and every other mid-east country
- North Korea vs. anyone and everyone
- The Iraq fiasco and our stupidity to seek a potential alliance with Iran?
- Opening the gates to illegals, including cartel members.
I omit many of the minor potential military conflicts and, of course our own staggering economy.
Before one labels me a pessimist, let me say I do not have a pessimistic bone in my body. I am, however a hyper-realist.
My un-edited response (I didn't look up the proper spelling of Khodorkovsky):
You reasonably cite the current list of issues confronting the world and its capital markets, but from 30,000 feet none of these are new.
Today's problems with Russia are no worse than the real cold war and there have been problems with Putin for a long time (he jailed Mikhail Khordokfsky and shut down Yukos).
Worrying about China is certain not new, before they were going to stop buying our debt, now it is some islands near Japan.
Anything to do with the Middle East? That's thousands of years in the making and will never end.
North Korea; this just in, there is a nut running the country.
Illegals have been an issue for decades, is something changing now? Yes and no, some details may change but this will be a hot button issue for many years to come.
All of these have existed and the markets have continued to have bull/bear cycles. The bear phases have been worse, but markets have come back to make new highs so the people most hurt are the ones who panicked out and never got back in, which is more about human behavior, not market function.
One of the items you list (or some other thing) could end the world, but people have been betting incorrectly on that for centuries.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.