The scariest projection is that of what might happen toward the end of 2019. Note that most “permabull” projections end here. Bridgewater’s forecast sees “an unsustainable set of conditions”…government deficits continuing to rise as the Fed continues to unwind…bond yields continuing to flatten. Who’s going to buy bonds under these conditions?
Here’s a pattern that repeats itself so consistently that it almost qualifies as comedy. When a Democrat achieves something in office, conservative media plays down the role that the president played in the accomplishment. When a Republican achieves something in office, liberal media plays it down as well. Neither side is right, as Washington DC is a huge machine. The US is not Oz, and the president isn’t the Wizard. If you believed the contrary–a myth; a fantasy–then…sorry.
Are you familiar with the Nine Circles of Hell from Dante’s Inferno? Well, here’s Ron Paul’s version of the same concept, updated to reflect geopolitical and economic Hell on Earth. Have we been here for some time?
It’s true that the Q1 earnings season was one of the best since 2011. But did Trump’s tax reform boost capital. To an extent yes, but not as much as stock buybacks. It also turns out that credit trends, according to BoFA, show that gross and net leverage is at record highs. Fine as long as interest rates are near record lows. But what might happen if rates keep rising?
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