With all due respect Albert Edwards has been bearish his whole career, he has made a career out of being wrong, so I struggle to believe much of what he writes. Make no mistake, I am very concerned about the economic backdrop and confess to find it challenging to distinguish between what is happening in the U.K. (a complete mess) to what is happening in the States. We only have to go back a few months though to your view (a view I shared at the time), that the Fed would be "one and done", because they had little to no precedent of being anything other than dovish. The government's balance sheet has enormous liabilities and as discussed by you months ago, they can ill afford to roll this over at much higher rates. That dynamic has not changed.
Thank you for raising this important point. In defense of Albert Edwards, he has been wrong about the stock market more often than not but was right about yields failing to break out on multiple occasions over the last decade. I was wrong in opining the Fed’s interest rate policy would be one and down. I underestimated the lag between tighter policy and its effects on government finances. I also addressed these issues in the Service when I started shorting the Nasdaq in March.Click HERE to subscribe to Fuller Treacy Money Back to top