History is full of examples of debt bankrupting dominant superpowers, going all the way back even before the ancient Egyptians. This time is not different. Debt is a ticking time bomb. And in this case, given the widespread consequences across the world, the bomb is nuclear.
European stocks declined for first session in five ahead of Wednesday's Dutch elections and Fed rate hike announcement. Fed concerns also dragged down Asian shares and S&P futures, while the dollar rose. Crude oil has ended its six-day drop. The pound tumbled 0.8% to the lowest since mid-January in a delayed reaction after Theresa May won permission to trigger the country’s departure from the EU.
Investors are willing to pay more for a given level of risk than at any time since 1994 and short interest has collapsed to record lows..."if The Fed follows through on its convictions, look for a flat yield curve and a recession to wipe out 50% of equity prices for the third time in the past seventeen years."
"The economy looks to me like a type of Ponzi Scheme. It depends on both rising energy consumption and rising debt. Judging from the problems we are having now, it seems to be reaching its limit in the near term. Raising interest rates will tend to push it even further toward its limit, or over the limit. The world economy is operating at too close to 'stall speed'. The financial system is too fragile."
The Ides of March looks like the perfect storm just as the Trump Rally shows signs of tiredness. The debt-ceiling bomb, the Fed's next interest hike, and Dutch elections that could lead to Nexit all hit on March 15 just as oil prices are plunging again.
It is clear by now that we have four corners of American politics these days: the utterly lost and delusional Democratic party; the feckless Republicans; the permanent Deep State of bureaucratic foot-soldiers and errand boys; and Trump, with his promise to bigly re-greatify this suffering land.
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