The Long Course on Why It's Time to Short or Sell Financials

(This commentary originally appeared on Real Money Pro at 9:16 a.m. ET today. Click here to learn about this dynamic market information service for active traders.)

  • There is no market sector that has been as embraced as heartily as financials
  • But, the domestic economy is slowing, the Trump regulatory and fiscal policy put may be waning, the yield curve is flattening, interest rates are contained, protectionism is rising around the world and bank valuations are back to pre-crisis levels.
  • Sell financial stocks.

"Skepticism is the chastity of the intellect; do not surrender it lightly."

--Richard Fisher's mother (Richard is the former president of the Federal Reserve Bank of Dallas)

Group stink has never been more conspicuous than in financial sector stocks -- banks, brokerages and selected financials.

A day does not go by in the business media that a talking head doesn't exclaim his or her adoration for financial stocks. That view is typically underscored by self-confidence and total disdain and lack of respect for the contrary view.

But financial stocks, despite their popularity, already are starting to weaken and potentially roll over in the face of growing threats that few are heeding. The weakness recently been most conspicuous in life insurance and brokerages; it now may be floating into banking stocks.

Source: Zero Hedge

The Economy Is Likely Weaker Than Many Believe

Forgotten by the bullish cabal is that zero interest rates have pulled forward a great deal of economic growth and a large amount of debt that is growth-deflating has been created over the last eight years.

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