An Obsessive Investor Focus…Naturally.


The Short Answer To The Title’s Question =

When EXPECTATIONS For U.S. Interest Rate Increases + Federal Reserve Balance Sheet “Run-Off” PEAK.

Because Higher Rates + Balance Sheet “Run-Off” = Reduced Financial Market Liquidity.

And Reduced Financial Market Liquidity = Universally Lower Financial Asset Prices [Equities + Fixed Income + Real Estate].


The Monthly Price Chart Of The S&P 500 [see above]…Especially Since The Spring Of 2009….Steeply Ramped…

Without Much Of A Meaningful Capital Draw-Down…As The Fed Frequently + Quickly Modulated The Quantitative Easing Dials…Whenever It Deemed Necessary…To Stimulate U.S. Economic Activity.


But Then…Without A Doubt + Collectively

…U.S. Domiciled Publicly Traded Corporations Are The Most:

1. Dominant +
2. Innovative +
3. Profitable Companies

…In The World.


But Do Not Confer A Company’s Equity Performance Strictly To Operational Acumen…As A Much More Explosive Element…To Share Price = Market Liquidity.

Because Since The Spring Of 2009…The Liquidity Hose Of The Federal Reserve Has…For The Most Part…Run At Close To 100% Capacity…

Toggling Between “Flow” And/Or “Stock” Of Printed Dollars…Without Much Of An Abolute Liquidity Draw-Down…

Versus The Current Federal Reserve Plan To Shrink The Balance Sheet At $95B/Month…Which Is Much More Dramatic Than The 2015-2019 Episode [see chart below].

Further Complicating Matters…A Challenging Inflationary Backdrop + Slowing U.S. Economy.


For Now…The “Flow” Of The Federal Reserve’s Balance Sheet Has Quickly Reverted To Zero…Soon Becoming Negative.

And The Balance Sheet’s “Stock” Has Most Definitely Crested.

Equity + Fixed Income Investors/Traders…Cower + Flee In Anticipation…As The Cliched “Wall Of Worry” Has Rarely Been More Fortified…

Hence…That “Wall” Could Be Climbed + Negotiated + Scaled…But Only…Very Carefully.


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