Financial collapse - The Russell 2000 index is a barometer of a sick economy!

Looking at the gyrations of the stock markets in the last weeks you would think that we're going from crash to boom and back again.

One thing's for sure is that the stock markets are very nervous. However, it would be prudent to notice that when the Trump administration mentions 'trade wars' the markets go down and when the 'Fed' looks like accommodating the stock market, the loses are wiped out.

What has been ignored here is that the 'stock market' is NOT the total US economy. It is purely a reflection of future anticipated values of stock at a price today.

To us, here, at Strategian, whilst the stock market is important it is only one facet of a huge economic melting pot where the Fed's distortions are visible BUT not recognized.

The 'cheap' debt is ravaging the 'competitiveness' of companies and banks in particular. The 'funding' anomalies that I have touched on in this video on the Russell 2000 shows that the market is constantly ignoring downside risk as long as there is a FED Put to be had.

This can only end very badly when the debt overhang becomes too much to bear when the US economy follows the global GDP downward trend. By then it will be too late for many investors to get out. The warning signals are there. Look at the Treasuries market and the increasing prices! There is a rush to safety - yet the market is going up on 'more' cheap money. Fundamentals, don't matter anymore to some - BUT there is always a minsky moment and we are very near it!

Видео Financial collapse - The Russell 2000 index is a barometer of a sick economy! канала Strategian