Bull Market, that is.
The portents are starting to appear. Credit cards losses are falling. Mortgage delinquency rates are dropping.
Now is the first time for years that millions of people can refinance their home mortgages and either lower money payments or cut years off their loan maturity by getting a 15 year fixed rate loan for the same or similar payment as their existing 30 year loan. Don't let the endless gloomy talk hide this fact. Sure, unemployment is high and fears are rightly high. But 90% of the labor force is employed and much of the US did NOT go on a home boom-bust roller coaster ride. They can and should be refinance to profit from lifetime low rates.
They are doing that, based on the wave of refinancing applications and the huge backlog there now.
Corporations are doing this, too, by issuing huge amounts of long term, fixed rate debt. This low cost permanent funding will give them a financial base to eventually expand operations. A solid, well funded foundation is being built; a solid foundation can support a big building.
The US economy is going to grow strongly next year. Not this year. The stimulus was squandered by the P-O-R ring and that hive of knaves in DC. Battleship Ben at the Fed, however, is still shelling heavily and he's now eliminating that last bastion of resistance to strong growth: existing high cost debt.
The military analogy is The Battle of Normandy. Weeks of slogging through the hedge rows culminated in a carpet bombing of the last German defenses in Operation Cobra. Those were crushed and First Army broke through. Patton then led Third Army's 'right hook' swept through north central France and the Allies pushed the Germans out of France in one great rush.
Battleship Ben is doing the heavy shelling that is crushing the last line of resistance. In a few months, the battle will be over. The US economy will then have a strong financial base and strong growth can occur. People and firms can takes risks IF their home castles are secure. Low cost, long term financing makes peoples' homes and corporations' finances secure.
Get Ready to Rumble ... Put your Buying Shoes On.
But don't jump the gun. Let the selling peter out. Soon it will be time to buy. Cut back on long term bonds and TIPs to build cash. Some time soon we will have good prices and then Krypto will be buying stocks heavily.
Word of the Day
"Pusillanimous" - adjective [$10]
Pusillanimous means cowardly, faint-hearted.
Sentence: Pusillanimous people cannot be good investors; once must seize opportunities. The maxims are: Sell high, buy low ... and ... Buy low, sell high. Do this asset class by asset class and good, long term returns at low risk will be your reward.