The Abyss of Debt: How America's Financial Foundations Are Sinking Beneath the Surface
The Crash of 2025: One Chart That Will Flash a Final Warning
March 24, 2025 - The warning signs are flashing. A chart that's been quietly ticking up for months has reached a critical level, signaling a potential crash that could rival the devastating downturns of 2008 and 2020.
The chart in question is the "Bull-Bear Ratio," a metric that measures the relative strength of the stock market. Developed by market expert and Forbes contributor, John K. Wiley, the ratio is calculated by dividing the number of stocks trading above their 50-day moving averages by the number of stocks trading below their 50-day moving averages.
As of this writing, the Bull-Bear Ratio has reached an alarming 3.2, its highest level since the dot-com bubble burst in 2000. This is a critical threshold, as it suggests that investors are becoming increasingly euphoric, and the market is due for a correction.
The chart shows that every time the Bull-Bear Ratio has reached this level in the past, a significant market downturn has followed. In 2000, the ratio peaked at 3.3, just before the Nasdaq Composite tumbled by 78%. In 2007, it reached 3.1, preceding the global financial crisis that wiped out trillions of dollars in value.
The current market environment is eerily similar to those past episodes. Interest rates are low, and investors are desperate for returns, driving them to take on excessive risk. The market is also heavily concentrated in a few high-flying tech stocks, leaving it vulnerable to a sudden correction.
While it's impossible to predict with certainty when the crash will occur, the warning signs are clear. The Bull-Bear Ratio is flashing a final warning, and investors would be wise to take heed. It's time to reassess risk levels, rebalance portfolios, and prepare for the inevitable correction.
As the old adage goes, "the market can stay irrational longer than you can stay solvent." It's time to get rational, and get out while the getting is good.