I wrote in quotes on Feb 22nd: on a vaca “I became more confident that corporate America and businesses around the world were well positioned for global economic growth but fearful that governments and central banks will screw it all up. The road to hell is paved with good intentions someone said someday. The gig of profligate fiscal spending and extraordinary easy monetary policy without consequence is up. As a result, the cost of capital is going higher, as the risk free rate (not so risk free anymore) goes up and risk premiums on everything else follows. In the short term, the tug of war between business and government will intensify…” The rebound in the markets in late Feb said “Business Will Overcome.” Now, with the Fin Reg bill about to come out of DC, China tightening trying to thread a needle, the German news today on top of the entire European bailout, etc…, governments are on the cusp of screwing this all up.
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