Read full text: https://market-ticker.org/akcs-www?post=252304
 | <p>This is the kick-off in a new category, "47", which is intended to identify the areas that I have spoken of many times before <em>with an emphasis and focus, in all cases, back to economics.</em></p><br><p>It is my hope that <em>some market-ticker.org |
If you think we can avoid the impact of the rate cycle turn you are wrong. We cannot. That cycle turn will revalue downward all firms that have debt on, and in the last ten years corporations, despite having clear warning that this cycle was turning, have wildly increased leverage rather than take it down. They will have to deal with that and stock prices will adjust -- and not a little. The same will be true for real estate as it is frequently financed, and many who got in over their heads are going to be bankrupted.
That sounds horrible but in fact it is good -- if you need a building for some purpose, whether a business or a place to live, is it to your benefit to have higher or lower prices? Obviously you want lower prices. For those who own real estate without any mortgage debt on it you lose nothing in real terms because you get less for your current house but you pay commensurately less for the other one, just as was the case on the way up. Those who got in over their heads and refinanced, especially serially or took the funds out and spent them somewhere will go broke but that is unavoidable, just as it is with commercial real estate owners who did the same thing.
If we address the five points above then while the serious downside economic event that Harris and Biden baked into the cake will occur -- that cannot be avoided -- within the first half of Trump's administration the turning point will be reached and just like occurred in 1920/21 while the downturn will be painful the resulting recovery and re-shoring of both manufacturing and all other lines of business into the United States will be prompt, enormous and record-setting.
In other words come the 2026 midterms the result will start to be evident and by 2028 it will be obvious that not only was it the right and sane choice but America will stand alone on the world stage as it once used to in terms of both economic and political achievement.
We must do it now, and do it all, because if we fail then the essential services that everyone believes we should have will not be able to be funded and virtually everyone in the United States will be economically destroyed.
These are the stakes.