The economy cannot read a calendar and does not own a watch.  Neither does the stock market!

There is much gnashing of teeth now that the current bull market has become the longest or oldest one since World War II.  Does that mean a crash is imminent?  No!  The current bull market does not know it holds any record.

Economic cycles and the stock market react to imbalances.  The only imbalances in the economy that worry me now are (1) emerging market debt, (2) the lack of concern about the national debt, and (3) the growing concentration of wealth leading to social unrest.  OK, now take a look at the three and tell me if any are going to blow up tomorrow?

The only stock market imbalance that worries me right now is the record level of shorts on US Treasuries.  Without getting too technical, if there is a “short squeeze” it might invert the yield curve, causing all kinds of problems.  Is it something to worry about?  No!  Is it something to watch?  Absolutely, and we do!