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Stock Market “Crash” Unlikely: It’s the Debt, Stupid

Courtesy of Mish

Many people have been predicting another stock market “crash”. I have not been in that camp for reasons I will explain below.

Yet, I believe the stock market is at least 50% overvalued, and a 40% to 60% “net” decline is coming.

My view is the decline will be slow and miserably painful for all involved, but there will not be a “crash” defined as a 35% plunge or greater in a single year.

To understand my view, we first need to discuss corporate debt.

It’s the Debt Stupid!

Yesterday, Bloomberg author Sho Chandra wrote Corporate America Has Amassed a Record Amount of Cash.

Corporate America's cash reached a record of almost $2.3 trillion in Q2, up nearly 60% since mid-2009: Fed data https://t.co/6eITLmublI

— Lisa Abramowicz (@lisaabramowicz1) September 21, 2017

The idea that “Corporate America has never been in better shape to put its cash hoard to use on everything from investment to acquisitions, share buybacks and dividends. Or just hold on to it,” is preposterous.

I “politely” replied to Lisa Abramowicz‏ …

Pure bullshit

How much debt is behind that alleged cash? https://t.co/NJriwy67v0

— Mike Mish Shedlock (@MishGEA) September 22, 2017

I do not know if I inspired her or not, but today she accurately Tweeted …

Continue reading here…


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