I like to read Doug Kass, who gives me great arguments from the other side of the trade.
Here are his factors that could affect markets and the economy into 2016:
12 key “big picture” factors
- Multiple and unpredictable outcomes: There have likely never been in history more numerous market and economic outcomes some of which are adverse and most of which are being ignored by market participants.
- Stuff happens: Black Swans appear to be happening with greater regularity.
- Weak growth ahead: Central bankers’ aggressive monetary antics have only produced subpar global economic growth.
- Borrowing from the future: Zero interest rate policy (ZIRP) has borrowed past and present sales from the future, underscoring the challenge of future economic growth.
- Unknown consequences of policy: No one knows the consequences of an extended period of ZIRP “punch bowls,” often resulting in aberrant behavior and hangovers.
- Making no sense: Indeed, if there were no consequences to zero interest rate policy, interest rates could have been held at zero forever — in the past, as well as in the future.
- Stop looking up, start looking down: Monetary overkill (in duration and in the level of interest rates) may produce the adverse consequences of malinvestment. It has resulted in the hoarding of cash and reduction in spending by the disadvantaged savings class.
- Uneven and less dependable growth: The “exclusive prosperity” of the haves (vs. the have-nots) is politically unstable, leads to more uncertainty (and unexpected outcomes) and will likely have a negative and more volatile impact on our social system, on the global economy and on our markets.
- Tom Friedman has the ticket: Our world has never been more flat, more networked and more interconnected. As such, the notion of an “oasis of prosperity” is not likely rooted in fact.
- Trouble ahead, trouble behind: Terrorism and religious radicalism (political and economic) will be more of a threat in the future than in the past.
- Treacherous technology: In a paperless (and “cloudy”) world, investors and citizens are not likely as safe as the markets assume.
- Lack of coordination: Geopolitical coordination is at an all-time low and isolationism seems likely to be a mainstay in the time ahead.