Pardon me for being a dummy, but I feel like he left it hanging. In the 2nd last paragraph he says 'Let's look at how the mechanics typically affect stocks, bonds, and gold.'. I was expecting more analysis on the mechanics.

Anyway, does QE not just lead to more asset inflation, including stocks? Bigger bubbles?

I think the market is (rightly) viewing all of this as political theatre @TycoonTerry -- I highly doubt the shutdown will last long, or that we'll see any substantial permanent layoffs for furloughed workers. In fact, if anything, when push comes to shove, they'll do anything they can to avoid any substantial sell off in markets, or economic weakness. Of course, pumping in ungodly amounts of artificial liquidity (if that's what it comes to) doesnt do anything to address the root cause of the issues, but it does work in the short run to keep up the illusion of growth.

I can't give advice, but i'd be careful with going short on a leveraged NASDAQ ETF. Not that you're wrong about markets being stretched, if not outright ridiculous in some areas, but when there's so much interference/distortion by fiscal and monetary powers, the irrationality can continue far longer than you might otherwise think.

@TycoonTerry , although I understand the sentiment, I'm tending not to agree on a bubble, ie 80% down, can easily see a correction 10-20% down. since Y/e, I have seen a diffusion in the market, with the crap running, which is usually (i say usually) a sign to be on guard. Almost all my positions are quality growth, so they are the upper end of valuations, but not nosebleed. I'm not forced to buy them here, maybe trim, be patient. the trouble with shorting is we don't know the longevity and amplitude of any rally, and shorting it is saying you know this. irrational versus solvent etc

So I'm definitely not going out on the risk curve now, there are plenty of counters i can see being down 80% in a big pull back, i just don't think I own them. at our retail group yesterday there was a guy bragging about owning a certain PME beneficiary (even a ? mark over if it's a good deal imo).... let's see. So I have a bit of cash, lots of gold and no crap, and let's see what happens.

as for the US Govt shutdown......meh

thats my view could be wrong

Ha @TycoonTerry

I 100% agree with @Strawman and @Solvetheriddle

While I don't have a crystal ball, and I guess anything is possible, the likelihood of a bubble or material downturn in the short/medium term is,IMO, extremely unlikely. If nothing else, key metrics are bullish, not bearish: Examples include: The money printers are getting ready to go into overdrive, Trump will ensure interest rates will continue to full, and the employment side of the equation remains resilient. All of this is happening while the American Treasury General Account keeps rising (aka money is being taken out of the economy), so that money is also likely to enter the economy soon enough too.

BTW: If you like to geek out on this stuff, looking over the Treasury General Account is a great way to see where America spends its money. As they say, a billion here and a billion there, and pretty soon you're talking real money :)

So for me, I will keep buying in each quarter via a DCA approach (way too lazy to buy more often) and pretty much the last thing I would be doing is shorting the NASDAQ!

Agreed and agreed @Strawman @Solvetheriddle . Valid points, solid counters.

I have just found myself wondering at the bigger picture with tech layoffs, fed cutting rates (inflation higher, some fudging ? Around employment figures and then firing the guy writing the objective numbers). At a zoomed out level, I just increasingly find myself thinking there is so much manipulation going on to continue this party (inflation adjusted CAPE is now higher than dotcom) that my temptation is increasingly to just cash out and wait.

My issue, similar to @Solvetheriddle is that I have a concentrated portfolio after selling out IRL. So now I have 3 positions ( EOL, RUL, XERO) making ~75% of my portfolio and that after trimming all 3. Happy with the companies, happy to own them, confident in future prospects. But increasingly nervous about the broader picture.