This Is Why All Hell Could Break Loose At Any Time
KingWorldNews.com
March 15, 2018
With continued uncertainty in global markets, this is why all hell could break loose at any time.
“Whatever turns the Federal Reserve unfriendly would likely be sufficient to derail the US equity market. But for now, we continue to expect the Federal Reserve to remain friendly to risk markets for a while longer.” — Craig Drill, Craig Drill Capital
March 15 (King World News) – Here is a portion of today’s note from Chief Investment Strategist, Jeffrey Saut, at Raymond James: “A long time ago in a galaxy far, far away” there were two Wall Street gurus with the nicknames Dr. Doom and Dr. Gloom because they were the prominent interest rate “bears” on the Street of Dreams…
Their real names were Henry Kaufman, then chief economist at Salomon Brothers, and Albert Wojnilower, similarly situated at First Boston. While we have lost contact with Henry Kaufman, we still see Al at our friend’s office, namely Craig Drill. Craig is the eponymous captain of Craig Drill Capital and is one of the best writers on Wall Street. In his recent missive he writes:
“Regarding the first risk of problematic wage increases, current average hourly earnings are up year-over-year by 2.6%, relatively benign. But labor market metrics suggest wage inflation is poised to move markedly higher. Historical relationships, however, between wage increases and measures of labor market tightness have broken down. If reestablished, wage inflation would accelerate sharply. This would turn the Federal Reserve hostile, elevate bond yields, and raise the risk of recession…all bad for US equities.
The Rest…HERE
