This could be the week in which bears claw back the narrative. Of course, that is highly uncertain, but at least the set-up position seems to favour the bears. One thing on the economy is a greater appreciation for the notion that the support from fiscal policy as heretofore been underestimated if one simply looks at the federal balance sheet. The ex-Dallas Fed dude, Kaplan was saying that a lot of the fiscal firepower is largely unspent, rests at the state level, but these states face a use or lose it by end of 2023 or 2024. Along with no obvious center for chaotic unwind of leverage positions that would trigger systemic risk, there is a degree of confidence that hiccups would be small. I would not be complacent on this or think this. I do not see where the leverage is but it does tend to make itself known after the party stops. Anyway, I am on board for a sharp sell-off to begin this week (I hope) and a more positive outlook for bonds---I almost feel as if I am channelling David Rosenberg...
This could be the week in which bears claw back the narrative. Of course, that is highly uncertain, but at least the set-up position seems to favour the bears. One thing on the economy is a greater appreciation for the notion that the support from fiscal policy as heretofore been underestimated if one simply looks at the federal balance sheet. The ex-Dallas Fed dude, Kaplan was saying that a lot of the fiscal firepower is largely unspent, rests at the state level, but these states face a use or lose it by end of 2023 or 2024. Along with no obvious center for chaotic unwind of leverage positions that would trigger systemic risk, there is a degree of confidence that hiccups would be small. I would not be complacent on this or think this. I do not see where the leverage is but it does tend to make itself known after the party stops. Anyway, I am on board for a sharp sell-off to begin this week (I hope) and a more positive outlook for bonds---I almost feel as if I am channelling David Rosenberg...