David Stockman

David Stockman comments on the change in the drivers of the US economy from an an earlier time.

Back then, Economy drove Finance: You therefore needed a main street contraction to trigger tumbling profits, which, in turn, caused Wall Street to mark-down the NPV (net present value) of future company earnings streams and the stock prices which embodied them.

No longer. After three decades of monetary central planning and heavy-handed falsification of financial asset prices, causation has been reversed.

Finance now drives Economy: Recessions happen when central bank fostered financial bubbles reach an asymptotic peak and then crash under their own weight, triggering desperate restructuring actions in the corporate C-suites designed to prop up stock prices and preserve the collapsing value of executive stock options.