Signs of a Cyclical Bear Market Ahead? - FINANCIAL-24
Emmanuel Saez, an economics professor at UC Berkeley, showed in 2013 that the US income distribution had worsened since 1970, reaching levels not seen since 1928. Since 2013, the US income distribution has only worsened. We envision a further worsening in the income distribution if the proposal to finance a corporate tax break from 35 to 20 percent with an import (consumption) tax goes forward.
A worsening of the income distribution is in our view a major threat to the sustainability of the current bull market: Historic data shows that periods in which the capital to GDP ratio hits record levels precede bear markets.
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