Over the last five to seven years, I consistently have seen articles talking about the end of the bull stock market.  My favorite Permabull is Tim Knight of Slope of Hope.  The stock market has continuously hit new highs.  The Federal Reserve’s easy money policy has really propelled it.

Over the course of years since 2009 when quantitative easing forever started happening, the market has rallied.  It took awhile, but risk preferences changed.  People abandoned “safe” assets for riskier ones.  One anecdotal piece of evidence is the percentage change in startup valuations.  They are up by large percentages as new money has filtered into all stages of the space seeking returns.

I have watched it and tried to keep my confirmation bias out of it.

In April of 2020, my wife woke up nervous and wanted to sell.  We sold some stock.  I reinvested after the market kept going up.

However, today is the first day I ever took a look around, put my finger in the air and thought, the bull is broken.

Why?  More importantly, why don’t I think there is anything the Fed can do about it?  Permabears have hated the Federal Reserve since at least 1997 when the Fed seemingly propped up the tech sector.  The “Greenspan Put” is not a colloquialism for nothing.

1.  Ramp up of Federal Spending.  We always spent way too much, but what they are doing and have done since Covid is unprecedented and stupid.  It’s irresponsible.
2.  Covid policy.  It’s not (Read more...)