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One Bank Sees ‘Ominous Signs For The World’s Most Important Financial Institutions’

"We do not believe this decoupling will be sustainable. Either the rest of the equities must come under pressure or the financial sector must rally."

"We do not believe this decoupling will be sustainable. Either the rest of the equities must come under pressure or the financial sector must rally."
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2 comments on “One Bank Sees ‘Ominous Signs For The World’s Most Important Financial Institutions’

  1. It seems to me that a deficit-funded tax cut for America’s wealthy should have roughly 0 impact on growth or dollar liquidity (in the short term). The government returns money to wealthy taxpayers (relative to the previous baseline), and because those taxpayers are wealthy, they save the money. By…buying the additional debt issued by the government to fund the tax cuts. All that’s happening is assets are created on the balance sheets of wealthy households while liabilities are created on the government’s balance sheet. Now, obviously I’m ignoring cross-border flows and making assumptions about where tax savers will put their money, but I think once you walk through the ramifications of what happens once those assumptions are changed, the net result is essentially the same. Thoughts?

    Of course, the long-run effects are negative as the government has to issue additional debt to support interest payments.

  2. Time cash out of the market, buy some US treasuries at a discount, and then wait for another blowup-cum-QE event from the Fed to reinvest at another all-time market low!

    Inflation is coming my ass

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