Without Central Banks this market wouldn’t exist. All the algorithms today are but spin off of linear regression. Boats rising with the tide.
Earnings can be replaced with Central Bank cash/credit, but not over the long run. And that day could be tomorrow, or in 10 years. Who could have thought that easy money would have created so many walking corpses.
Who? I’m not sure about “walking corpses” being explicitly predicted but there were many people who thought it was a really bad idea.
The lessons learned in the next few years will be remembered for probably a generation or so before “the new kids on the block” believe they are smarter and/or times are different. The best fix would probably be when the lesson is visible world wide as burned out ruins of cities for governments to be prohibited from trying to “manage the economy”. But I put the odds at 50-50 that will happen on even one continent.—Joe]