Consumer Maxed Out, Goldilocks Fading, 30% Stock Correction Coming

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Markets are pricing for Goldilocks but closer to Frankenstein, says economist from CNBC.

Steen Jakobsen, the often-bearish chief economist at Danish investment house Saxo Bank, cited several factors including growing credit loans, a widening fiscal deficit in the U.S., doubts over infrastructure spending plans and a potential trade war.

Investment chief of $250 billion firm says financial markets are on a ‘collision course for disaster’

  • Guggenheim Investments’ Scott Minerd warns clients that inflation and rate hikes from the Federal Reserve will lead to the next market downturn.
  • “With the huge fiscal stimulus coming online, the Federal Open Market Committee (FOMC) will feel obliged to play the role of creating economic headwinds,” the firm says.
  • Guggenheim has more than $250 billion in assets under management across its fixed income, equity and alternative investment strategies, according to its website.
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Global credit markets showing signs of danger

  • The 12-month Libor is hovering at nearly 2.7 percent and has been rising steadily all year.
  • As money bolted from the stock market late Tuesday, it flowed into the 10-year Treasury note, knocking the yield down to 2.78 percent.
  • Comparing the 10-year yield to the two-year Treasury yield shows a yield curve that has flattened to 51 basis points on Tuesday, a tick above the lowest level of the year.
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h/t David Stockman


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