Reverend Jonathan Hansen has warned America of an upcoming stock market collapse since December of 1997. At that time he took out an advertisement in the Seattle Times giving the prophetic word to the American people about economic judgment. In 1998 he traveled extensively throughout the United States speaking in many cities in one-day conventions with the Prophecy Club advising people to get all their money out of the stock market and put it in a savings account. Few investors listened.Why at this time in American history would God use a stock market crash to get people's attention? The New York Times article by Floyd Norris on March 17th has some insightful answers to that question.
"First, this last bull market changed the way people lived and the risks they took. More Americans were dependent on stock market profits than ever before - few Americans put their money in a savings account which would only yield 4 to 5 percent, when they could see their money grow in a mutual account which would yield 19%. According to Mr. Norris, "the loss of wealth reflects the fact that in 1999, 60 percent of Americans investments and savings were in the stock market, double the proportion they had in 1982, according to J.P. Morgan Chase.... Never before in American History has the wealth of so many been tied to Wall Street's fortunes.
Secondly, employees at all levels were given stock options making them millionaires in companies that were stock market favorites. In 1999, when the bull market reached its zenith the net worth of American households rose to 14.1 percent. Douglas R. Chiggott a strategist at J. P. Morgan said, "It influenced the size of the homes we live in, the type of cars we drive, how we go on vacation. Because of the extraordinary improvement in the average America's net worth, it made us feel comfortable carrying what by historic standards would have been an extraordinary amount of debt."
The article goes on to point out, "Already the stock market's fall has put a dent in American's wealth. Household net worth fell 2 percent in 2000, the first such gall since the government began keeping track of this statistic after World War II. Household had experienced a small increase even in 1974, during the worst recession since the 1930s."
The NASDAQ composite, dominated by technology stocks, is now down 63 percent from its peak last March. The Dow has held up better due to its "old economy" concentration. But it is off 16 percent from its peak, losing 800 point or almost 8 percent last week.