Episode Thoughts:
- Stocks have begun to signal widespread investor capitulation as key indices fall below support levels, potentially triggering forced sales.
- Long-term market and inflation trends indicate lower asset prices as inflationary forces skew the GDP compensation share back toward labor and away from asset owners.
- Record margin debt and credit card debt combined with low investor cash allocations and reduced personal savings indicate negative retail investor liquidity flows.
- Weak consumer and business sentiment, falling real incomes, poor Q4 bank earnings, rising initial claims, and China's economic issues point toward an economic downturn.
- Since supply-side factors support inflation, investors should not expect the Federal Reserve to bail them out again - meaning it could take decades for the stock market to recover if it crashes.
