Our Three Scenarios

(1) What’s next: melt-up or meltdown? (2) Rational exuberance scenario remains our most likely. (3) Inflation remains a no-show in all three scenarios. (4) In irrational exuberance scenario, foreigners could pile into the US dollar, bonds, and stocks. (5) 30% up and down? (6) The secular bull survives in two of our three scenarios. (7) Are small-cap stocks signaling that the end is near? (8) Hard to see recession in US. (9) Not so hard to see recessions in Eurozone and Japan, and slowdown in China. (10) Focus on market-weightrated S&P 500 housing-related industries.