BB:
Completely agree.
The U.S. economy is 2/3rds consumer spending. And most of Joe Sixer's recent spending has been debt based. Now, his SUV costs a week's pay to fill, his taxes, utilities, insurance, child care, etc. costs are rising and his STOCKS ARE DOWN. He "feels" poorer, and is cutting back, especially on borrowing for consumption. Hello recession.
Bulls think that Big Al can solve the problem through rate reductions. Too bad that they don't do some homework. He's run out of room. Drop the rates much more and the buck craters, the treasury market becomes a one-way street, and an already (again) wincing bond market just wheezes to a halt. No easy corporate credit equals fast corporate debacle. Uncle Al has, at best, maybe another 1/4 point up his sleeve before he gets drawn and quartered by the bond pit boyz.
And about all those foreign holders of U.S. assets,....... not all of them are completely blind and some of them are already quietly getting up before dawn to pack their tents, not wishing to experience "crowded exit syndrome" yet again.
It is insane that the sheep see fit to drive the market up even as the economy de-rails, but of such stupidity is bearish opportunity made. Anybody who is bullish about this market is simply putting his head in the sand or some other warm, dark, and smelly place imho.
Best, Earlie |
