December 18, 2018
Daniel Shainberg
“It would be very surprising to see the market stabilize and take off again from here. What’ happening now is there is a pronounced rise in real long-term interest rates. If you look through history compared to the past 15-20 years that is the key factor that brings the stock market down. Long-term rates are going to rise. We’re moving towards stagflation. That is a toxic mix.”
Daniel Shainberg
“It would be very surprising to see the market stabilize and take off again from here. What’ happening now is there is a pronounced rise in real long-term interest rates. If you look through history compared to the past 15-20 years that is the key factor that brings the stock market down. Long-term rates are going to rise. We’re moving towards stagflation. That is a toxic mix.”
When asked about leverage, he replied, “leverage is average. The leverage that occurs in the context of a toxic asset is a problem.”
The Fed is set to convene its interest-rate setting committee next Tuesday and Wednesday. Investors will closely parse their guidance on the potential for a 4th hike this year as well as any insights into 2019.
When Greenspan, who became famous (or some say infamous) for coining the term “the fed put,” comes clean with a bearish outlook, you know things are dicey!
Dan Shainberg
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