Some overlooked financial indicators never make mainstream headlines. The secured overnight funding rate (SOFR) is one of them.
Maybe now it will – because it’s collapsing:
Overnight bank lending rates are collapsing. (Source: FRED)
SOFR measures the overnight rate – annualized – that banks pay to borrow cash. Plunging rates will make it easier for the financial system to lever up, take on and dole out more debt.
In plain English: there’s a new wave of easy money coming fast. We expect this will boost the already terrifying bull market even higher.
This is a perfect time to “panic now, and avoid the rush,” as we outline in our Plunge Protection Strategy. Sell ⅓ or half of your positions into the buyer frenzy. Let the rest of your winners ride.
~ Addison
P.S. For a great overview of where we are in the AI “industrial” bubble, check out last week’s Grey Swan Live! chat with Harry Dent. Harry raved about the benefits AI will accrue to society. But also warns investors should be prepared in advance for a crash and recession.
“Stock market crashes and economic recessions,” Dent says, “are a good thing!”
It’s what the government does to fight them that causes problems in people’s lives.
To fully understand Harry’s cold, hard point of view, watch the replay here:
Details on this week’s Grey Swan Live! coming soon. Stay tuned.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, send them here.
