What The Bears Keep Getting Wrong – Mark Dow Talks With Alpha Trader (Podcast)

By December 10, 2019 Bitcoin Business
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Summary

The latest Alpha Trader features Behavioral Macro blog author and former hedge fund manager Mark Dow.

It's looking like goldilocks as the economy chugs forward without generating inflation. The Fed should be happy to stay on hold next year.

It's a solid economy and strong labor market driving stocks higher, not the level of interest rates. He's staying long the averages, and looking for another valuation boost on the realization of a "shortage" in stocks.

Bitcoin fits charts patterns as well as any asset ever, and those patterns say the move towards zero will continue.

Alpha Trader's ninth episode features Behavioral Macro blog author and former hedge fund manager Mark Dow.

Dare we say, "goldilocks?" The economy continues to move forward without inflation moving higher, says Dow. As for asset prices, lingering fear of the financial crisis is keeping animal spirits somewhat in check. Add it up, and Dow sees the Fed happy to stay on hold well into the next year even as short-term rate markets are (kind of) pricing in another rate cut in 2020.

Dow puts to bed the idea that central bank liquidity is driving the economy and the stock market higher. He notes both the economy and stocks surged from 2015 on even as the Fed was pulling liquidity from the markets (until the recent rate cut cycle). Instead, we can thank the big surge in growth to the big post-election fiscal stimulus package, and as that's worn off, the GDP numbers have come down to more sustainable levels.

Dow reminds that folks are more likely to take on risk when they're comfortable in their jobs and their situations. And we can add in a third factor - when they see people around them making money. Those three items - far more than the level of interest rates - drive risk-taking.

How is Dow positioned going into 2020? He's long for the reasons stated above, but also because he believes there's a "shortage" of both high-quality assets like Treasury paper, and stocks. If you think the permabears are upset now because of their failed macro call, says Dow, wait until valuations go even higher as investors look to put money to work in a stock shortage environment.

Bitcoin (BTC-USD) is the most "pattern-perfect" asset he's ever seen, says Dow, and what the charts are telling him now is that it's dying. Assets in bull markets typically don't make significantly lower highs, says Dow, and that's what Bitcoin has done.

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The latest Alpha Trader features Behavioral Macro blog author and former hedge fund manager Mark Dow.

It’s looking like goldilocks as the economy chugs forward without generating inflation. The Fed […]

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