Submitted by Gordon T Long via MATASII.com,

President-Elect Trump may have just unwittingly sowed the seed of an equity market draw-down which will send even more protesters into the streets of America. Donald Trump’s stated economic policies are clearly pro-growth and if he manages to implement his pro-business, anti-regulation agenda, in  the longer term they have the potential to surpass the bold and successful initiatives of Ronald Reagan. However, in the near term he has already unknowingly just shot himself in the foot.
To understand this we need to look at some charts from the FRED system which we unearthed in trying to understand what the future presently entails for corporate stock buybacks and dividend payouts. Shown in the chart below we see how Corporate CEO / CFO’s have increased their debt loads by historically unprecedented levels of 20-30% Y-o-Y since just after the GFC (Great Financial Crisis). You will notice that in the last year that rate of growth has gone negative.

Non-financial Corporate Business – Click to enlarge
The next chart we found astounding regarding the degree of correlation of the above corporate debt growth (primarily being used for buybacks and dividend payouts) compared  to the movement of the S&P 500 on a Quarterly Y-o-Y change basis.

Submitted by Gordon T Long via FinancialRepressionAuthority.com,

A FALLING MARKET CANNOT BE ALLOWED – at any cost!
The Central Bankers have clearly painted themselves into a corner as a result of their self-inflicted, extended period of “cheap money”. Their policies have fostered malinvestment, excessive leverage and a speculative casino approach to investments. Investors forced to take on excess risk for yield  and scalp speculative investment returns, must operate in an unstable financial environment ripe for a  major correction.  A correction because of the  high degree of market correlation that likely would be instantaneously contagious across all global financial markets.
Any correction more than 10% must be stopped. As a result of the level of instability, even a 10% corrective consolidation could get quickly out of control, so any correction becomes a major risk. What the central bankers are acutely aware of is:
If Collateral Values were to fall with the excess financial leverage currently in place, it would create a domino effect of margin calls, counter-party risk and immediate withdrawals and flight to areas of perceived safety.