Global Markets Moving Apart

The world's biggest economies are seeing a "decoupling," Bank of America says.
The US is showing surprising resilience, European growth is weak, and China is faltering.
Global stocks have reflected the shifting tides in trade and supply chains.

The biggest players in the global economy are on different trajectories, and markets around the world are reflecting the shifting landscape.

In Bank of America's view, the US economy continues to show remarkable resilience, European growth has faltered, and China faces the most challenging outlook amid real estate woes, deflation, and demographic headwinds.

"Signs of decoupling are present in global growth, trade, and equity markets," Bank of America strategists wrote in a Friday note.  READ MORE...

Only One Way Out of Inflation

Jerome Powell - Bank of America

Severe recession needed to cool inflation, Bank of America analysts say

Bank of America: 'Sticky' inflation could take some time to come down

FOX BUSINESS REPORTS...

The only way to cool down inflation is with a recession...  economists define a recession as a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

In this case, SEVERE means intense and longer than normal...  whatever normal is because in an economic sense normal is a flexible variable and difficult to define when situations occur that are different than expectations...

This means a recession could last for the next two years of the Biden Administration...  and, if our recession is this severe then you should expect lots and lots of layoffs, a reduction of goods and services to the marketplace resulting in much higher prices.  The Fed will continue to raise interest rates making it rather difficult for individuals, families, businesses, and corporations to borrow money.  These higher rates will apply to ALL LOANS and MORTGAGES.

Our Gross Domestic Product (GDP) will decline which means our economy will decline...  and, as our economy declines then the value of our dollar will decline as well.

• Businesses will spend less
• Consumers will spend less
• Banks will loan less money
• Unemployment will increase
• The Govt might extend unemployment benefits
• If the govt spends more our debt will increase
• Businesses will not expand operations
• Businesses will not invest in future technology
• Businesses will not be globally competitive
• States will reduce services
• Cities will reduce services
• Illegal immigration will deplete resources
• Crime and violence will increase

REMEMBER:  it was not Trump's policies that caused this to happen...  it was Joe Biden's policies that caused this to happen, starting with his attack on the OIL INDUSTRY...

What we are experiencing are the UNINTENDED CONSEQUENCES OF THE DEMOCRATS...

Living Off Paper Money

Rising stocks and rock-bottom interest rates have delivered a big perk to rich Americans: cheap loans that they can use to fund their lifestyles while minimizing their tax bills.

Banks say their wealthy clients are borrowing more than ever before, often using loans backed by their portfolios of stocks and bonds. Morgan Stanley wealth-management clients have $68.1 billion worth of securities-based and other nonmortgage loans outstanding, more than double five years earlier. Bank of America Corp. said it has $62.4 billion in securities-based loans, dwarfing its book of home-equity lines of credit.

The loans have special benefits beyond the flexible repayment terms and low interest rates on offer. They allow borrowers who need cash to avoid selling in a hot market. Startup founders can monetize their stakes without losing control of their companies. The very rich often use these loans as part of a “buy, borrow, die” strategy to avoid capital-gains taxes.

Many wealthy people are also borrowing against their portfolios. When Tom Anderson started at Merrill Lynch & Co. in Cedar Rapids, Iowa, in 2002, many of his fellow advisers had just one or two securities-based loans in their book of business. Over the years, he encouraged more clients to borrow and noticed peers doing the same. Now it is common for advisers at big firms to have dozens of these loans outstanding, he said. Merrill Lynch is now a part of Bank of America.  TO READ FULL STORY...  YOU MUST SUBSCRIBE TO THE WALL STREET JOURNAL

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