Finding A Bottom

Alcoholics and addicts have a saying that says ” a bottom is reached when your behavior is deteriorating faster than you can lower your standards”.  The important thing about bottoms in the recovery community is that they represent the critical point at which the addict experiences real consequences.  If we use the well worn analogy that the Economy/Capital Markets are the addict and the stimulant/substance is easy money, the latest tax package combined with a proposed infrastructure spend would indicate that the addict is a long way from rehab. Such behaviors on the part of lawmakers, aided by Central Bankers, would  indicate that consequences are for another day, sobriety can somehow wait for tomorrow. Tomorrow is closer than one thinks however as we have mentioned on several occasions, the math simply begins to become onerous, even assuming only a return to trend-line rates of interest(interest on the debt triples). There is simply no way to grow your way out of the kinds of federal deficits that the U.S. is experiencing and will experience. But for now, we say to Capitol Hill and Wall Street, BOTTOMS UP!

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