Friday, July 31, 2020

On My Radar: Shilling & Rosenberg on Deflation - CMG

On My Radar: Shilling & Rosenberg on Deflation - CMGj



 from  Shilling

...

  • Gary sees an L-shaped recovery with a downward-sloping lower leg. We are getting an agonizing reappraisal now.
  • A rally in bonds preceded stocks in January this year and it wasn’t until Feb.19 that stocks keeled over. Bonds were anticipating the recession, and he thinks the recent rally in bonds is telling a similar story.
  • Gary believes the rally in bonds is foretelling of a coming 40 to 50% decline in the S&P.
The Great Financial Crisis affected just a few people. Mortgage and housing and took out a few big banks. This event is much greater than that. This will overwhelm everyone, everywhere. The monetary stimulus is small in terms of overall economic impact.



from David Rosenberg

  •  If you look at industrials, consumer cyclicals, and financials, they are down 23% from their pre-recession peak.
  • Anybody long those stocks would be asking, “What sort of bull market are people talking about?”
...we are in a depression...You find that corporations are using the words, cash conservationbalance-sheet strength, etc. This is about survival of a business. 

...
  • When you have excess supply around the world, you get deflation.
  • Unless we cut off imports, we are going to continue to see excess supply

if you are an unaccredited investor and unable to access private investments, there are still ways to “explore.” We’ve recently added ARK Invest Disruptive Technology Portfolio a high-conviction top-ten stock ideas strategy to our TAMP platform. It will be volatile but I believe the rewards in ten years will outpace the S&P 500 Index. There are no guarantees, of course.



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