Recently, the US stock market had been in a rally mood. Currently, with the North Korean nuclear tests just completed, we are not sure how the rally mood will turn out. But we smelled something very fishy about this recent rally. The economic news had not been good (and the good news wasn’t good enough), and the risk of a recession in the US economy is something that we believe is quite likely to happen. The US Federal Reserve chairman himself had warned of a substantial correction in the US housing market. Even the bond market believes that a recession is on its way.
Yet the stock market was incredibly optimistic. It?s simply beyond our belief.
We are getting out while we can.
Tags: Bonds, Federal Reserve, housing, North Korea, recession, stocks
