Don't count on the central bank to save the market! Bank of America warns that the combination of oil prices, credit, and central bank misjudgment has gathered the script for the crash of 2008.

Michael Hartnett, an analyst at Bank of America, pointed out that oil prices are soaring and concerns about the private credit sector are escalating. These phenomena are causing market activity to exhibit typical characteristics of the eve of the global financial crisis. Hartnett further analyzed that between July 2007 and August 2008, oil prices doubled from $70 per barrel to $140 per barrel. Meanwhile, signs of the subprime crisis began to emerge and quickly spread to institutions such as Northern Rock and Bear Stearns. The US-Iran conflict that erupted on February 28 has already pushed oil prices up by more than 60% this year. In his report, Hartnett stated: "The performance of various assets in 2026 is approaching the price trends between mid-2007 and mid-2008 in a foreboding manner." He further added that Wall Street is currently "ominously repeating the mistakes of 2007-2008." Currently, concerns about banks' exposure in the private credit sector are continuing to rise. This asset class is facing multiple challenges, having to deal with fund redemptions, underwriting standards scrutiny, and the impact of artificial intelligence on some borrowers. At the same time, the sharp rise in energy costs due to the Iran situation is fueling concerns about stagflation - the constantly rising price pressure is forcing major central banks to raise interest rates, while economic growth is stagnating. Peter Kazimir, a member of the European Central Bank's Governing Council, stated earlier this week that the Middle East conflict and its impact on inflation are likely to prompt the ECB to raise rates earlier than expected. Hartnett mentioned that in July 2008, the day oil prices peaked, the European Central Bank made a rate hike decision, which ultimately became "one of the most serious policy mistakes in history." Just 74 days later, Lehman Brothers collapsed, and oil prices plummeted to $40 per barrel. At that time, "the impact of the credit crisis far exceeded oil price fluctuations," and the European Central Bank was forced to cut rates by a significant 325 basis points. Hartnett also stated that the mainstream view in the market still tends to believe that the Iran conflict will not last long and that private credit issues are not systemic risks. This view has somewhat fueled the continued bullish position in the market, as investors hope that "policymakers will always come to rescue Wall Street." Hartnett's analysis suggests that the rise in oil prices and the tightening financial environment pose greater risks to the stock market, mainly at the corporate profit level rather than inflation. He gave specific operational recommendations: when oil prices exceed $100 per barrel, the 30-year US Treasury yield exceeds 5%, the US dollar index exceeds 100, and the S&P 500 index falls below 6600 points, one should sell stocks. Data from last Friday showed that the 30-year US Treasury yield reached 4.89%, the US dollar index hit 100.18, reaching a new high since November last year, while the S&P 500 index closed at 6673 points. Furthermore, Sebastian Ridler of Bank of America mentioned in an interview that he has noticed "recent movements in the credit sector and I think there are some similarities to the situation in 2007."