Equities

“Professional investors are wrestling with four big concerns, what I call the Four Horsemen of the Investing Apocalypse:

The Fed keeps on raising interest rates and shrinking its balance sheet, ultimately causing a nasty recession in the US and an outright depression in emerging markets.

China drops the trade war atom bomb by letting the yuan devalue sharply, sparking a global credit freeze that makes the 1997 Asian financial crisis look like a mild autumn day.

Italy and its populist government play hardball with Germany and the ECB in a way that Greece could not, leading to a Euro crisis that dwarfs the 2012 crisis.

Inflation, particularly wage inflation, gets away from the Fed, as their monetary policy tightening forces corporations to increase their risk-taking.”

~Ben Hunt, “You Don’t Have to Dance Every Dance,” Epsilon Theory, December 2018