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“Blind Faith” Isn’t A Strategy For “Late-Cycle” Markets

Summary:
Reversing these experimental policies initiates a new set of dynamics which will gradually reduce excessive liquidity from the financial system. Just as quantitative easing (QE) and zero interest rates were a grand experiment, the removal of these policy measures is equally experimental. Now, over 325 million domestic lab rats and the rest of the world wait to see how it plays out.  Importantly, if the Fed continues down this path, investors should carefully consider potential risks and the appropriate market exposure in this brave new world. http://davidstockmanscontracorner.com/?p=238871&preview_id=238871&preview_nonce=751f355392&preview=true

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Reversing these experimental policies initiates a new set of dynamics which will gradually reduce excessive liquidity from the financial system. Just as quantitative easing (QE) and zero interest rates were a grand experiment, the removal of these policy measures is equally experimental. Now, over 325 million domestic lab rats and the rest of the world wait to see how it plays out.  Importantly, if the Fed continues down this path, investors should carefully consider potential risks and the appropriate market exposure in this brave new world.

http://davidstockmanscontracorner.com/?p=238871&preview_id=238871&preview_nonce=751f355392&preview=true

David Stockman
David Alan Stockman (born November 10, 1946) is a former businessman and U.S. politician who served as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

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