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It so happens that media in general, and financial, in particular, is biased toward negativity. Progress is slow, and efficiency gains are in the shadows, but alarmism attracts viewers and sells ads. It's easy to take a position on the market, bullish or bearish, and dig up supporting evidence. In the industry, it's called "talking your book". It's an intersection between wishful thinking and confirmation bias. Yet, every time one gets a conviction it's worth remembering that markets are what they are because of a wide range of opinions — often opposed ones.
The following are succinct points for each side.

Bearish:
-  Stubborn inflation. High and rising rates will eventually break something
- Monetary tightening by the FED.
- Elevated valuations. P/E, CAPE, or anything else.
- Extreme concentration of leadership in the market.
- High and rising public debt. Interest payments exceeded the DOD budget
- Strong dollar (DXY).
- Insurance liabilities for LA fires.
- Office real estate woes on balance sheets of regional banks.
- Higher mortgage rates reduce discretionary spending for new buyers by a sizeable amount. Big increases in home insurance.
- Risk of sizeable deportations.
- David Rosenberg.

Bullish:
- American exceptionalism. A strong economy, low unemployment, and healthy job growth.
- Salary increases outpace inflation. Even more so for skilled workers at the top. 
- High Normal interest rates.
- Continuation of high CAPEX spending, AI investments, factories, and data center construction
- $2T of deficit spending.
- Expected deregulation from the new administration.
- Onshoring.
- 20% of mortgages are below 3%. 55% of mortgages are below 4%. 40% of homes carry no mortgage.
- Population growth
- Jim Bianco (neutral)

Pick your poison.

#finance
January 2025



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It so happens that media in general, and financial, in particular, is biased toward negativity. Progress is slow, and efficiency gains are in the shadows, but alarmism attracts viewers and sells ads. It's easy to take a position on the market, bullish or bearish, and dig up supporting evidence. In the industry, it's called "talking your book". It's an intersection between wishful thinking and confirmation bias. Yet, every time one gets a conviction it's worth remembering that markets are what they are because of a wide range of opinions — often opposed ones.
The following are succinct points for each side.

Bearish:
-  Stubborn inflation. High and rising rates will eventually break something
- Monetary tightening by the FED.
- Elevated valuations. P/E, CAPE, or anything else.
- Extreme concentration of leadership in the market.
- High and rising public debt. Interest payments exceeded the DOD budget
- Strong dollar (DXY).
- Insurance liabilities for LA fires.
- Office real estate woes on balance sheets of regional banks.
- Higher mortgage rates reduce discretionary spending for new buyers by a sizeable amount. Big increases in home insurance.
- Risk of sizeable deportations.
- David Rosenberg.

Bullish:
- American exceptionalism. A strong economy, low unemployment, and healthy job growth.
- Salary increases outpace inflation. Even more so for skilled workers at the top. 
- High Normal interest rates.
- Continuation of high CAPEX spending, AI investments, factories, and data center construction
- $2T of deficit spending.
- Expected deregulation from the new administration.
- Onshoring.
- 20% of mortgages are below 3%. 55% of mortgages are below 4%. 40% of homes carry no mortgage.
- Population growth
- Jim Bianco (neutral)

Pick your poison.

#finance
January 2025

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Markets continued to grapple with the economic and corporate earnings implications relating to the Russia-Ukraine conflict. “We have a ton of uncertainty right now,” said Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors. “We’re dealing with a war, we’re dealing with inflation. We don’t know what it means to earnings.” Ukrainian forces successfully attacked Russian vehicles in the capital city of Kyiv thanks to a public tip made through the encrypted messaging app Telegram, Ukraine's top law-enforcement agency said on Tuesday. The next bit isn’t clear, but Durov reportedly claimed that his resignation, dated March 21st, was an April Fools’ prank. TechCrunch implies that it was a matter of principle, but it’s hard to be clear on the wheres, whos and whys. Similarly, on April 17th, the Moscow Times quoted Durov as saying that he quit the company after being pressured to reveal account details about Ukrainians protesting the then-president Viktor Yanukovych. So, uh, whenever I hear about Telegram, it’s always in relation to something bad. What gives? In view of this, the regulator has cautioned investors not to rely on such investment tips / advice received through social media platforms. It has also said investors should exercise utmost caution while taking investment decisions while dealing in the securities market.
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