The last time fiscal stimulus was used in a futile attempt to extend an economic expansion for longer than a decade, it didn't work:
Herein lies the problem and why the United States now has a Liar-in-chief for president: Because the expediencies of the day demand it. On average, 10,000 Baby Boomers turn 65 every single day. That is the "traditional" age for retirement, and the age at which many of them will begin to retire. Some earlier, some later. Which is the reason that the croupier-in-chief brags about his unique magic at making big, ugly, bubbles into beautiful buying opportunities. Because the level of the stock market now dictates the retirement date for millions of Boomers.
Decades ago, companies offered traditional pension plans and medical plans to all employees. Fast forward to the Banana Republic of America, wherein fewer and fewer companies offer medical insurance, and few if any companies offer traditional pensions. The advent of the 401k retirement plan shifted responsibility from the employer to the employee - for those lucky to have them. Millions of the hardest working people get absolutely ZERO retirement assistance of any kind. Those are the least paid workers in the sweatshop, of course.
All of which means that the stock market IS the retirement plan. Hence, stocks can "only go up", otherwise retirement will be delayed by years, decades, or forever. No surprise, speculation is rampant, because unfortunately the casino has a history of massive drawdowns. Stocks go down during recession when forward profit estimates inconveniently turn back into a pumpkin. At which point Wall Street analysts remember that they never could really predict the future, they could only extrapolate the past. Something they Microsoft Excel at.
Which means that recession is "no longer an option", so the Fed is actively trying to find a way around it:
"How good are the yields on government bonds at predicting recessions? If history is any indicator, the answer is very good. But with the economy strengthening, not weakening, some question whether looking at the yields on an array of government bonds is an effective forecasting tool"
For their part, the Financial Services crime syndicate is only concerned about AUM: Assets Under Management. The masses at large want to be told a happy tale, and the Financial Services industry is happy to oblige. Their Magic 8 ball extrapolations are as good as any at convincing the masses that they know what will happen 12 months from now.
Sadly, each assiduously "unforeseen" drawdown is more devastating than the last. Resulting in more destruction of the economy and larger Federal deficits, all to finance stock buybacks. The result of which leads interest rates lower for longer - meaning yield suppression - forcing investors to take more risk in the next cycle.
In other words, going ALL IN at the double top is an investor tradition. Why should this time be any different?
Right now, recession stocks are screaming recession, confirming the yield curve. As real earnings growth stalls, stock buybacks are the sole source of per share earnings growth. The lack of real earnings growth has created a massive growth/value premium based solely upon revenue growth. Which means that the riskiest stocks are leading the market.
"the proportion of companies reporting losses before going public in the United States is at its highest since the dotcom boom in 2000."
Looking at the Mutual Fund asset chart above, we see that the S&P 500 final peaked at the end of August, 2000. Which was the last time that Tech stocks were up as much as they were this past August.
How bullish is that?
The only upside is that those on the right who claim that tariffs caused the Great Depression - despite the fact that tariffs were implemented 8 months after the 1929 crash - get to be right this time.
No one will question that fact this time:
