Happy to give input. I’ll start big picture as to not overwhelm with excessive detail. But, to be clear, I established many of my shorts this year pre-Covid. My belief in a massive down cycle has very little to do with Covid. Market is way over focused.
We currently have several bubbles as follows:
-Car Market - seeing highest delinquencies in history - pre-Covid
-Credit Market - most over inflated and over extended in history. Corp and individual debt as a % of GDP are both at ATH and cannot be deleveraged
-Equity market - stocks still trading at ATH as a ratio of total market cap:gdp, 5 top stocks represent biggest part of SP market share in history.
-Commercial real estate - most outstanding commercial and industrial loans in history
-Residential real estate - largest number of workers retiring in history this decade.
-Pension system - $4T under funded.
The real core issue is the Fed has created so many bubbles, they can’t keep track. Now we have 50 M baby boomers retiring this decade and millennials haven’t really become a full earning class yet. Boomers have to draw on all of the resources mentioned above which will create a vacuum. There is no stopping cyclical recessions, but by trying to do so, the Fed has created the potential for a multi-generational depression. So either these bubbles burst (credit bubble already did, see Fed buying junk debt to try to prop it). Or, the Fed buys all debt then forgives it as it comes due. This creates massive massive hyper inflation.
Now add to all of the above Covid, 22 M unemployment and a shut down economy. Covid was not the bubble, it’s just the needle that popped them. When we look at valuation, the only thing comparable is the 1929-1932 depression, hence my target of SPX 1200 to as low as 600
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