US Inflation and What To Do About It Message Board

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Strategies & Market Trends : US Inflation and What To Do About It

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To: John Vosilla who wrote (1053)	7/24/2019 6:52:54 AM
From: RetiredNow	Read Replies (1) of 1504

Maybe we don't get a repeat of 2008, at least not exactly, but there are other problems elsewhere. I think the Fed will use QE and all their liquidity tools to backstop counterparts risks from derivative implosions like we're seeing with Deutsche Bank's decline. I think the Fed can use those same tools to combat bad corporate loans, when that bubble bursts. Basically, the Fed's balance sheet will double in size in the next recession, but maybe the market won't lose 65% of it's value like it did last time. I still think it could be a breathtaking dive in the stock market when the next crash comes, but it will be slow motion, over a couple years. it will be like a slow tide coming in that the break water can't stop. The Fed will try, but the free market will always have its way. So it will be a long slow malaise that brings PEs down over a couple years. That's my best guess. I want to be prepared to buy beaten down sectors and names during that time. For those with cash, the next cycle downturn will be a great buying opportunity. But right now, pretty much everything is very pricey, except Oil Equipment & Services and Auto Components sectors of the SP500.

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