rsei, Whether or not Brinker gets it right or wrong, we are curses by living in interesting times, for sure.
I personally find Brinker's methodologies interesting, but a time fallible. His views are only one factor in my ongoing go-forward conclusions about the economy and the markets.
After Helicopter Ben's QE announcement today, it certainly appears more likely that we get to your S&P 1505. But if they keep on printing up those $3.00 bills, we'll have to beware of how much they really buy for us in the future. I'm getting the increasing sense that the view we can print our way to prosperity has been adopted by the FED. So the congress spends $1.40 for every $1.00 GDP and issuing new debt to finance the $.40 added deficit which is stimulus. Then the FED buys 66% of that new debt in exchange for the shortest-term debt there is, Fiat U.S. Currency - the currency of the current regime. The debt is a liability on the Treasury Dept books, and, an asset on the FED Balance Sheet - in otherwords an intergovernmental asset/liability which cancel each other out in consolidation. What remains is Government spending of U.S. currency being put into circulation. Of course governments all over the world are doing this. At some point all of those new $3.00 bills chasing too few goods and services produced translate into higher prices.
And to add insult to injury, if the FED Chooses to buy back bad mortgage loans and put them on its balance sheet, and those loans become uncollectable from deadbeat borrowers; then in effect, the taxpayers have ended up financing the home purchases of such deadbeat borrowers! Thank you Jimmy Carter for eliminating Bank Redlining of areas they would previously not extend loans to, thank you politicians pandering for minority votes of the 1990's for presuring financial institutions to make bad loans under threat of descrimination lawsuits, thank you politicians for repealing regulations prohibiting loan originating financial institutions from selling their loans into the market, thank you for passing regulations enabling financial institutions buying such loans to bundle and resell them all over the world, thank you politicians for elimination strict borrower loan file documentation requirements so deadbet borrowers could easily get loans, and thank you politicians for repealing the Glass-Steagel Act protecting depositors from risks taken by investment banks that could as a result of such repeal merge with deposit institutions. There's a special place in HELL waiting for all of those who made all of this possible!
Yes, we are cursed by living in interesting times!
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