World debt hit a brand new file of $224 trillion in This autumn.

That determine was $150 trillion in 2013 and $75 trillion in 2003, in response to BofA Securities strategist Michael Hartnett.

Prior to now 10 years, “authorities debt +60% to $83tn, company debt +50% to $86tn, family debt +40% to $55tn,” Hartnett wrote in his weekly Circulation Present word.

Fiscal extra and the “authorities bubble” stay huge explanations for U.S. development “exceptionalism,” he stated, noting that the fiscal deficit of seven.5% of GDP below President Joe Biden and the 6.6% deficit below President Donald Trump have been the largest because the Nice Despair/World Battle II.

Certainly, “governments & corporates issued extra debt in Jan than ever earlier than ($760bn … of which $410bn govt & $350bn company),” he added. The underside line is that the price of capital “ain’t falling” very a lot with an enormous recession.

Hartnett additionally famous that the standard narrative of “bonds grasp, shares servant” seems to be altering — and that solely occurs in instances of bubbles and deflation.

Treasure yields (TBT) (TLT) (SHY) (IEI) (IEF) have been down and the Nasdaq (NASDAQ:QQQ) was up “bigtime” in This autumn, “however script flipped to ‘Nasdaq up = yields up'” within the first 4 weeks of 2024, Hartnett stated.

That is price-action that happens both post-recession (2009) or with bubbles (1999),” he added.

Buyers positioning for “Fed cuts/AI-mania” say the optimum technique is barbell of bubble shares and really distressed property, which have been rising markets (EEM) in 1999 and sure China (MCHI) (FXI) (CQQQ) (GXC) or small cap (IWM) (SCHA) in 2024.