Conspiracies Aren’t Conspiracies And ‘Fundamentals’ Are Malleable
I would wager that I am, more than anyone else who writes regularly about markets and economics for public consumption, averse to conspiracy theories.
Regular readers are well apprised of my disdain for the dissemination of misinformation, both related to markets and otherwise.
With that obligatory caveat out of the way, let me just say that I find passages like the following (from a Bloomberg article published Saturday) exceptionally disingenuous:
Dennis DeBusschere, Evercore ISI’s head of
So I guess Dennis would say that the Fed can shrink its bal sheet back to “normal” then (call it $900bn) and stocks will be fine except for the impact from higher rates, provable defaults, and a slower economy.
By the way, I actually like Dennis but agree it is not an argument I would be making.
The whole point of QE (bal sheet expansion) is to reduce the cost of capital and to get a consumer wealth effect.
If equities are telling us us if better economic times ahead what are 10yrs, Dr copper, small caps, etc telling us?
Oh, that is because of CB distortions, hedging, etc.
Did Dec 2018 tell us of future Eco weakness?
By this time one should realize that devining insights from “markets” has to be taken with large grains of salt. With quants, VaR, CBs, FOMO, TINA, illiquidity and other issues the disconnect between “market” prices and fundamentals can be quite significant.
Equity optimism seems at odds with economic outlooks to this observer.