If you’re wondering what’s holding up the longest bull market in history amid what in my view is a steadily deteriorating backdrop, as the 1-minute clip below demonstrates, it’s an amazing, and undying (until, that is, it’s too late) faith in the power of central banks.






Well, while I respect the gentleman’s opinion, that’s not my take. 


Interest rates are unequivocally not the problem, and lowering them here will not inspire fundamental economic growth. And the notion that if they’re going to fall that “you push the cycle out further” is the definition of cherry-picking history. 

Sure, the charts do show interest rates falling mid-cycle and inspiring economic growth in the process, but we’re talking from much higher levels, and of course they fall big time as cycles near their end. 


I don’t even have to mark up this 50-year chart of the fed funds rate to show you what I mean (red shaded areas highlight recessions):





Without a complete rolling back of all new tariffs (and an ironclad commitment to not go there anywhere else), the most Mr. Spencer can hope for is that the Fed aggressively reducing interest rates will put a bid under the manufacturing stocks he’s touting. But, alas, then (in a protracted trade war scenario) we’re talking nothing more than inflating an asset bubble that’ll make it all the more painful for the folks following his advice when his mid-cycle thesis doesn’t play out…