Stock market on brink of bubble burst
CNBC video/Rebecca Ungarino/10-10-2016
MK note: As we enter the earnings season, stocks take a turn for the worse – down nearly 200 at the moment. In this video, Lombard Street Research economist Charles Dumas tells CNBC that the stock market is “on the brink of a bubble burst.” He breaks down the problem in the stock market to a simple, straight-forward cause and effect analysis. The market, he says, has been held up by company stock buy-backs which in turn have been financed by borrowed money at very low rates. As a result, any interest rate rise would likely put an end to that input source and put the stock market into a tailspin.
“When the Fed gets real and makes the necessary increases, this market could prove much more vulnerable than is traditional in the early stages of a rate-hike cycle.” – Charles Dumas, Lombard Street Research
