Because the market was being driven by sentiment rather than fundamentals in the frothiest years, it’s easy for confidence to suddenly evaporate and take the market with it. Prices plummet, and people who are over-leveraged go bankrupt – triggering waves of forced selling, which pushes prices down even further. It’s impossible to pinpoint the exact moment when this is going to happen, but you won’t need to be told when it does: nothing sells newspapers like bad news, so the media will stoke the panic with endless horror stories. The recession phase seems like it will last forever, but it never
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