RE:A contrarian viewAgree, Obscure about the fear of contagion over the fallout from Evergrande. That
combined with a general fear over a prolonged recession would be enough for
many retail holders to exit until things settle. By the time they do, it will be too
late for those same investors to buy back in because those same bank stocks
will have already started to move back up. That's usually how these things tend
play out.
I must be in an agreeable mindset today. With the amount of debt and deficit financing that the US and the rest of the world needs to do, central bankers are
trading on a knife edge and so will be very reluctant to push for more rate increases.
Its the law of dimishing returns. What you gain on inflation will be lost in GDP and
more expensive debt financing costs. Gov't sponsored entitlement programs
will only become more burdensome in a recessionary environment.
I think a pause here is warranted but its not easy to second guess the Fed. I didn't
buy more BK either but I did buy some DGS.