I think the most likely scenario is that gold skyrockets, stocks stabilize, and interest rates go back between 10-15% to satisfy China after we default on our debt. We’ll tie in the fact that to please our debtors we’re requiring the Fed to stop forcing liquidity and allow the YOLO debtors of the world to finally go bankrupt and the vicious SPAC spree of 2020 will capture all the value and prop up equity markets while the likes of Citibank/DB/Well-Fargo go completely tits up which will allow for a simultaneous victory declared by the progressives and for washington as we transition into this new era of a digital dollar wherby appreciation and grattitude are the new principles preached by congress in the wake of the “The great Debt collapse”
Taper, no tantrum, has already become the new narrative - which is funny, because I was telling my clients that a few months ago!
So yeah, I really do think you’re going to bleed yourself dry if your investment thesis is to short equity markets just because those two red lines are converging on each other. But for real homie, a one standard deviation move is a buying opportunity 99 out of 100 times. It’s in the math.
edit: and if you don’t take my word for it, take this rando Linkedin influencer post, where he says [ You Can’t Predict. You Can Prepare. 95% of all financial history happens within two standard deviations of normal, and everything interesting happens outside of two standard deviations.]
Edit 2: all that means is that you’re best off only using 2.5% of your portfolio to hedge against a 3 sd move and beyond, but probably better off not shorting altogether. Mind you I bought a bunch of put contracts expiring this week on S&P futures so take this all with a grain of salt.
Thank you for coming to my ted talk.