There is No Worry

That is what we see today in the market as interest rates continue their move higher from Friday’s lows. Traders see no change in the big picture, they see a FED that has created this Bubble and is not expected to change course. Powell does not want to be seen as the person who exploded the 40 year asset growth story, albeit on the back of the population and its offspring that is paying for it through more funny money created debt.

So, the Crash is looming for a number of the following reasons:

1. Hot inflation that does not abate
2. Major tax law changes coming as the infrastructure bill passes
3. Covid or climate change repercussions
4. Action on monopolies by the justice department

And then you have a host of enabling factors:

1. Sky high valuations
2. Inequality pain
3. An evolving recession based around supply side low productivity
4. 40 years of compounding supply side inequalities

The market is not going to act ahead on any of these factors, it will all happen over a three day explosion due to some surprise. I continue to be of a hedger mentality.