THE US Wall Street is fast heading for a crash according to the Bank of America (BoA) as the huge speculative bubble on the stock market shows all the signs of exploding very shortly.
The BoA is worried about the results from its Sell Side Indicator (SSI), a measure of ‘investors optimism’ in the continued increase in share values.
This optimism has steadily increased month on month indicating that there is unbridled optimism amongst the financial speculators that they can go on continually hiking up share prices and making vast profits on paper.
However, as the BoA has stressed, such high degrees of speculator optimism inevitably precede a dramatic crash.
When it reaches this stage, it is a clear sign that investors should jump ship as quickly as possible and dump whatever shares they have.
The last time the banks issued advice to sell was in June 2007, just before the banking crash in 2008.
Savitaa Subramanian, a BoA strategist, said: ‘The continued pause in sentiment may reflect the mixed market data that includes a drop in consumer sentiment to the lowest levels since 2011, rising inflationary pressure posing risks for margins, and peak profit growth.’
In other words the Bank of America is warning that Wall Street is not just overheating but reaching boiling point as inflation in the US continues to rise to a 13-year high of 5.4%.
This will increase the pressure on the central Federal Reserve Bank to increase interest rates and start to unwind its trillion dollar handouts to the banks and speculators through Quantitative Easing.
Deprived of all this free money, the entire stock market would collapse overnight.
Indeed if the investors take heed of the Bank’s warning and sell, it will cause a run on Wall Street equivalent to that of 1929 as investors dump shares wholesale.
Entire industries and companies face collapse in the economic carnage, a collapse that, like the 2008 crisis, will not be confined to the US but will crash the entire world capitalist economy.
The working class will not passively accept bearing the brunt of this world crash.
Already in the US, there has been an intense sharpening of the class struggle as workers are rising up against the poverty level wages and exploitation by a system that creates a handful of multi-billionaires while consigning millions to poverty.
Yesterday marked the annual Labour Day holiday in the US but it also coincided with the end of enhanced federal unemployment benefits of $300 a week.
It is estimated that 11.2 million American workers will lose benefits.
The bosses clearly hope that this will drive workers back to low paid jobs but on the contrary it now appears that many US employers are struggling to find enough workers to fill vacancies.
This has forced companies including McDonald’s, Walmart and many others to announce minimum wage increases to $15 an hour.
These increases are paltry when compared to the vast billions in profit made by these companies who have ferociously fought back against all attempts by workers to unionise and strike for $15 wages.
However, it is clear that the US working class is not prepared to be driven back to work for poverty wages and unsafe working conditions in a country where the deadly Delta virus is rampaging virtually unchecked across large states.
Yesterday, American workers celebrated Labour Day, a federal holiday in the US, that has its origins in an 1894 strike by workers at the Pullman Palace Car company in Chicago that made railroad carriages.
The strike over low pay and for a reduction in the 16-hour working day spread across the entire American network causing rail traffic to grind to a halt.
Today, the working class will not be content with a national holiday to celebrate past struggles but will enter into a decisive struggle that will pose point blank the issue of workers overthrowing bankrupt capitalism and replacing it with socialism.
The urgent issue of the day is building sections of the Fourth International in the US and across the world prepared to lead this struggle for the World Socialist Revolution to victory.
