By Richard Russell
Normally, free markets allocate capital very efficiently. But the Federal Reserve has taken over the free market and as a result, money has gone mostly to the upper 1%. One of the results is that savers are unable to get satisfactory returns on their money.
In desperation, Americans have turned to junk bonds as a source of income. Long-term Treasury bonds sell at fantastic prices and provide yields in the 2-3 % range.
With the government backing student loans, these loans have gone crazy and now amount to over a trillion dollars. Most of these will probably never be paid back, leaving students with masses of debt that they can never repay.
Turning to the markets, I didn’t like two of my key indicators, the Dow Jones Transports and the Nasdaq, both closing lower. Furthermore, I didn’t like the NYSE closing below its big number of 10,000.
My conclusion is that the market is bearish and we’re ... Log in or subscribe to continue reading.