It's best we just say that we have fundamentally different views on the way the world works. For you to say things like stocks don't reflect a companies financial figures is mind boggling to me. I'm confused with your entire response. You're talking about sub-prime mortgages, you're all over the place. Do you know what happened in 2008 exactly?The stock market has nothing to do with economic success. If it did, each stock price would reflect the company's financial figures. They don't. The stock market runs on rumor, fear, greed, and a herd mentality. It has nothing to do with economic fundamentals. How is it sound financial practice to borrow enormous sums of money to purchase your own shares? In the short term it drives up the stock price but in the medium term it creates debt that can never be paid down. That isn't a problem for the CEO or CFO because they will have moved on to the next job with hefty bonuses, leaving the new CEO/CFO to carry the can.
The bursting of one of the debt bubbles is the usual cause. Last time it was the sub-prime property market but it was precipitated by one company - Lehman Brothers. There are plenty to choose from this time. Auto debt. Student debt. Stock market debt. Retail industry debt. Credit card debt. It could even come from overseas; China and Europe are massively in debt. When a large enough institution has trouble fulfilling its obligations (like Lehman Brothers), that instigates a rout that flows through to the rest of the market. Many think that the junk bond market will kick off the next one. The recent inversion of the bond yield curve supports that argument.
If you think the US is doing great, then consider these:
77% of Americans are living paycheck to paycheck. No savings at all.
US auto loans are at a record $584 billion and are still rising. A record 7 million of those loans are more than 90 days delinquent.
US student debt has doubled since the last recession to a record $1.56 trillion and is still rising. A record 5.1 million of those loans are more than 90 days delinquent.
US credit card debt is over a trillion dollars for the first time ever and is still rising.
Retail sales last quarter saw the biggest fall since the GFC.
A record number of retail chains closed last year (over 3,800 stores) and even more are predicted this year.
Mortgage rates are at record highs yet housing demand has fallen 10%. Despite that, the number of properties on the market continues to rise and prices continue to rise.
Chapter 11 bankruptcies are at record highs.
Chapter 12 (farming) bankruptcies are at record highs.
For the first time in over a century the average US life expectancy has fallen.
I don't think there is anything left to discuss. You can have your opinion. We can revisit this next April when the economy has crashed. I'll remember to remind you, don't worry..