What’s the concern? Debt. But not the national debt or even deficits, which are topics themselves. In this case we have already shown how dependent the stock market is on corporate buybacks of their own shares, says Gene Inger of The Inger Letter.

Dismissing liquidity as a concern is so commonplace that analysts celebrate the Senate trampling some banking reform rules that followed our projected Epic Debacle (financial crisis) beginning a decade ago.

It is likely inappropriate (or naive) to remove stress tests and more though of course temporarily that buttressed bank share performance. (Other of course than Wells Fargo, where the FBI is looking into deeper, as on-top of other egregious behaviors, clients were allegedly pushed to certain investments, that managers knew were not suitable risk assumptions.) 

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However, for now we should not dismiss risk concerns, even as analysts generally maintain fully-invested postures for clienteles.

Periodically I’ve mentioned that if the new tax and most rules reforms are not reversed by any future Congress, we could see a protracted economic long-cycle for years, regardless of current slowing or even an interim recession.

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That is very important for growth, essential for price stability. (Inflation is not as desirable as even some Fed-heads seem to think; however there is little doubt we’ll get more especially if the trade tariffs really expand or bite.) All in order to perpetuate the revitalization of the U.S.

We’ve got a bit of that achieved already, and the bullish super-long-term possibility. I know it departs from the typical negativity of just demographic studies or the like on the economy, is part of why I speak of bear markets within a context of the long cycle, or at least severe corrections not catastrophe.

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That may be faint praise for a forthcoming market decline that gains lots of traction, but it’s a reality that comes from viewing markets as leading, rather than lagging, indicators; nor viewing the equity market as focused just on immediate earnings, especially if the prior year advance fully anticipated (discounted) those achievements. 

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So, since we made our point about how the market, at least temporarily, what’s the concern? Debt. But not the national debt or even deficits, which are topics themselves. In this case we have already shown how dependent the stock market is on corporate buybacks of their own shares.

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To do that they’ve usually in the low-interest-rate environments gone to the debt markets. That’s something that might change under conditions either of higher interest rates which reduce the attractiveness of borrowing for buybacks, or conversely, an actual recession, which slows business to a degree where funds need to be hoarded by companies, rather than put to work in buybacks.

Besides making shareholders happy with the higher prices, buybacks largely function as additional executive compensation as a benefit they rarely mention being a motivation for doing the buybacks.

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In-sum: this was an expiration Friday: Quadruple at that. Hence we did not expect or require any particular resolution to a choppy ongoing battle around the S&P 500 (SPX) 2750 inflection zone (just above it now).

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