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Ep. 212 Trumped Up Irrational Exuberance… continues

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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

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