• The Dow Jones is in record territory, closing above 19,000; they’re already starting to talk Dow 20,000 now
  • The markets are euphoric
  • All the traders who were so convinced that President Trump would be a disaster for the stock market, now think it’s a boom for the stock market
  • It shows you how fickle investors are, but also how quickly the narrative can flip
  • Personally, I don’t think it has anything to do with the fundamentals
  • I think traders are trying to push the markets in a particular direction, and they’re just grasping for reasons to justify it
  • Obviously, what they’re talking about now is all this extra economic growth and inflation (supposedly inflation is a good thing)
  • This is going to result from the the massive fiscal stimulus that we’re going to get from the Trump administration
  • Of course, everybody is ignoring the monetary drag that is already evident from the bloodbath in the bond market
  • And this is going to continue, in fact if you look at the trend lines
  • We’ve broken some trend lines now, which were down in yield and up in bond prices that have been in existence since 2007
  • So we have done some serious technical damage to the bond market
  • The 10-year yield, right now, is at 2.357, which is still low
  • But it has moved up by 32% in the last 2 weeks
  • That is a huge percentage increase in long-term interest rates
  • First of all, this is already decimating the commercial real estate market, which is the bulk of Donald Trump’s net worth
  • He’s going to be running his business from the White House while he is running the country; he says that’s perfectly legal
  • Clearly he doesn’t want to see a continuation of the collapse in the commercial real estate market
  • But believe me, these cap rates are moving up rapidly