The pandemic is bursting the bubble, it's not the underlying cause of the problem. The conditions have been building for several years.
In 2001, the bubble was burst finally by big shift in interest rates from the Fed, and some insane valuations which cause the smart money to run, causing a stampede.
Most analysts have been raising red flags for a long time now. The market has been operating on hype and irrational good vibes for at least a few years.
Warren Buffet started hoarding cash some time ago - long before the Coronavirus.
Listen to Robert Shiller's interview earlier this year on the FT concerning 'narratives'. I don't think it's a new concept, rather just a modern articulation of it. The mania we're seeing is just a more extreme form of narrative.
I've been looking at the Shiller PE Ratio [1] with raised eyebrows as much as the next guy, I'm just not seeing how discount brokerages specifically are at fault.
So far the S&P 500 has lost just one year of gains. I havn't done deep analysis but to me that still seems consistent with expectations that the economy will slow down for months due to sickness and lockdowns all over the world caused by the pandemic (+ this weekend's oil price thing).
The PE ratio of the S&P 500 is still 20, so there is still some way down to go before I would call this the bubble busting .I don't have to hubris to predict how much more the market will fall tomorrow or in 3 months.
