WLS-AM 890 - January 22, 2022 Volatility, the New Normal?

Episode Thoughts: Stocks have begun to signal widespread investor capitulation as key indices fall below support levels, potentially triggering forced sales. Long-term market and inflation trends indicate lower asset prices as inflationary forces skew the GDP compensation share back toward labor and away from asset owners. Record margin debt and credit card debt combined with low investor cash allocations and reduced personal savings indicate negative retail investor liquidity flows. Weak consumer and business sentiment, falling real incomes, poor Q4 bank earnings, rising initial claims, and China's economic issues point toward an economic downturn. Since supply-side factors support inflation, investors should not expect the Federal Reserve to bail them out again - meaning it could take decades for the stock market to recover if it crashes.