If CT, IL, and Puerto Rico Default: BUY STOCKS?!

Markets

"Bon Scott" of the Soren K. Group opines on the end of times, the repeal of math, and the resiliency of stocks in the way only he can:

The Case for Fang Stocks

Puerto Rico is the Petri dish of U.S. state default
Illinois defaults - then declares bankruptcy
CT declares bankruptcy - then defaults
NJ sells rights for Florida Vacation ad billboards to be placed at the Jersey shore - then defaults

Markets and People React

US Treasuries rally on flight to "safety'!
Muni market freezes in every state but Texas and Florida.
Chicago Rioting commences, Mayor reacts by rezoning the South-side to extend up to Skokie IL.
FANG STOCKS RALLY

Just buy the dip folks.

- Bon

Zombie States, Deflation and Why Bonds Could Rally

Realistic side note. Remember zombie banks? Zombie states are next. Zombie States will be those who are so consumed with servicing their debt that nothing will be able to grow economically. And that is deflationary.

Think about that. Preventing or delaying self-clearing events is deflationary.

Bankruptcy is also deflationary, but the market would at least get to correct the mal-investment cycle.

In Extremis : when no one can or will buy your debt, no debt is issued.

Bankruptcy is good. Or at least it used to be. Now it is all about "pot odds" , denial, and bucket kicking.

Zombie Nation next

Soren K.