Here’s What You Missed This Week on Economy & Markets

ECONOMY & MARKETS | July 30, 2016

It Ain't All Wine and Roses, But There's Some Love Left in the Market By Robert Johnson, Editorial Director, Dent Research It's been almost three months since I started here at Dent Research. For several years, I'd been traveling a lot as an on-location photojournalist and writer. It was my dream job, but it proved exhausting. That thrill of the hunt out there for the story, the perfect shot at the right moment, talking to the right people, the occasional spot of "danger"… it was nothing if not interesting. I thought I'd miss it, but I really don't. At my new job, I quickly learned that I work with some really, really smart people and they all bring to the table a largely unique take on markets and the economy. What they all have in common, from Adam to Rodney, is that like me, they love the hunt. The right story, the perfect trade at the right moment… talking to the right people. It's a blast and I learn something new almost every day. When Peak Income hit our inboxes on Thursday, I felt Charles' calm, steady demeanor slip away as he enthusiastically outlined his reasoning for an energy buy two-thirds into his newsletter, and it finally hit me. Our editors also love the thrill of chasing down a good lead and delivering it fresh to our readers. Trading may not be like dodging mobs and bullets in Tahrir Square, but I'm OK with that. It has its own thrills. And my wife, Jessica, isn't complaining, either. Not that I would have heard her above the groans and mad scrambling from the HRC news cycle last weekend, as Hillary's team took another hit by scandal that just keeps on giving. She accepted her party's nomination after another 30,000 hacked emails, pulled from her private server, got a new lease on life via WikiLeaks and Julian Assange. As the DNC went off beneath this fresh and fragrant cloud of fixed smiles and Pollyanna sound bites, all seemed about normal when Lance began the week explaining how it just might be worth beating bonds at their own game and overcoming those pathetic yields. The most extreme economic turning of the screw we can see at this point might be when central banks give up on the questionable benefits of quantitative easing and skip the intermediary by pumping fresh, hot currency straight into consumers' pockets. Or, well, at least into their bank accounts. That's the danger: when the unthinkable becomes plausible… the new normal. On Wednesday, the Hon. David Walker stepped in to explain our current Debt-to-GDP ratio is as much as 555%, when including unfunded obligations like pensions and healthcare. It's terrifying and definitely worth a read. On Thursday, Harry let us know that global corporate debt is on target to hit $75 trillion by 2020, an additional $24 trillion on top of today's record-high $51 trillion. Not an ideal scenario considering that just over a week ago, the Wall Street Journal announced corporate profits sat poised to shrink for the fourth consecutive quarter. And as another sweltering week ends here at Dent Research, Rodney closed the week off with some advice on municipal bonds: stay away from them. The craziness Puerto Rico is trying to pull in their default play is not encouraging and debt everywhere continues to mount to historic records with no end in sight. As Rodney said: "No one wants to wake up owning bonds issued by the next Detroit or Puerto Rico." No kidding. Play safe out there, Robert Johnson Editorial Director, Dent Research economyandmarkets@dentresearch.com

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RECENTLY Central Bankers Are Driving Us Into The Dirt Today's bond market is about to have its own Dust Bowl. Hon. David Walker Says U.S. Debt Is Worse Than Advertised $19 trillion-debt is just the tip of the iceberg… Central Banks Are In A Real Pinch But are they desperate enough to try helicopter money? Today's Bond Market Is Complete B.S. If you're not careful, you could lose money investing in sovereign bond debt.

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