Salient to Investors: Harry Dent writes: The first wave down in a bubble tends to happen in a few months or less. Every major bubble back to the tulip bubble in 1637 did not correct in nice stair steps to a drop of 50% to 90%. We are in the “crash season”
READ MORE... →Salient to Investors: The Fed needs to be audited to determine if it has manipulated financial markets, which is not in its jurisdiction. Autonomy for the Fed ended when it started playing footsie with Wall Street. The bubble in stock prices was created by years of risky Fed policy. Even the
READ MORE... →Salient to Investors: Carl Icahn said: BlackRock have fueled a bubble in the high-yield debt market through the sale of ETFs filled with risky bonds, akin to the banks selling billions of dollars of faulty subprime mortgage bonds in 2007. The ETFs offer the appearance of liquidity and make the high-yield bond
READ MORE... →Salient to Investors: Paul Singer at Elliott Management said China’s debt-fueled stock market crash is way bigger than the US subprime mortgage crisis but may not be enough to cause a global financial market meltdown. Bill Ackman at Pershing Square Capital Mgmt said China is a bigger global threat than Greece by far, their stock
READ MORE... →Salient to Investors: David Stockman writes: Keynesian central banking has created a worldwide financial bubble. Soaring bond yields and the fear of losing debt market access are the one force that can cause governments to sober-up and acknowledge the facts. Reagan did not want Volcker to ease the intense upward pressure on interest rates and private
READ MORE... →Salient to Investors: David Stockman writes: Economists Piketty and Krugman are zero-sum anti-capitalists. Real capitalism cannot thrive unless inventive and entrepreneurial genius is rewarded with outsized fortunes. Massive central bank intervention is not necessary for capitalism to thrive. The free market does not perennially slump toward underperformance and depressionary collapse
READ MORE... →Salient to Investors: David Stockman writes: The Fed has generated a $50 trillion financial bubble and made money and capital markets to little more than gambling casinos. Speculative rent-seeking in the financial market has replaced entrepreneurial innovation and supply side investment and productivity, resulting in a severe drop in real growth and a
READ MORE... →Salient to Investors: David Stockman writes: The financial carrying capacity of the developed market economies has deteriorated since the 1980s; due to aging demographics, declining competitiveness v. emerging market economies, declining productivity growth, and the big increase in the leverage ratio against public and private incomes. The US’s ability to
READ MORE... →Salient to Investors: Investors still believe that whenever stocks and risk assets fall, the authorities will act to limit the losses to ensure they don’t take economies down with them. Hans Redeker et al at Morgan Stanley said comments last week by Bullard and Haldane left markets with the impression
READ MORE... →Salient to Investors: JC O’Hara at FBN Securities said the spread between the Russell and S&P 500 is widening again and worrying traders who want to see small caps participate.” Jonathan Krinsky at MKM Partners sees a good chance of US equities declining modestly into early October, citing deteriorating breadth and seasonal weakness.
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