I think we will keep seesawing for a while until capitulation is apparent. A downside is much more apparent than a new upside simply because profitability is dropping not gaining and the Federal Reserve have already artificially manipulated the economy with low rates and coercing TBTF banks to gamble by buying stocks.

Look for a fall this year but more like in the Summer doldrums. I'd avoid bios and tech. They are already pushed up and even though they are bets on growth more than profitability, even growth is looking weak.

With the ROW calming down the US's heyday of debt dumping is about to come to an end forcing the Federal Reserve to revisit a new round of QE since they have pretty much made it clear by now they aren't raising rates despite their continued lies saying they will eventually (maybe in a decade). The author is right China is not willingly increasing its US dollar holdings. China's doing all it can to make their currency tradable for oil etc. so they can avoid the transaction deflationary tax for having to hold obscene amounts of US treasuries with terrible yields.

The simple answer is no, as the author points out. As for Congress' attempt to balance the budget, it is better even if it is bad because the frog is already close to dying.

"At the same time, many of these developments are frightening – due in large part to where we are in the credit cycle, which I’ll explain next week.", agreed, people looking for increased rates from added risk are potentially in for a very bad surprise.

The dollar should weaken from its overvalued stature, but I don't see this being a big problem unless the Fed gets into more QE. The rest of the world besides Asia is still looking like a mess.

China pretty much has highlighted that this bank will be not a Asian global investment bank but a way for it to secure resources and garner influence. A truly Asian bank would have multiple interests from multiple Asian countries and be focused on investment rather than securing assets and power. Even so, many welcome the cash flow from the hoard of dollars and reserves China has been amassing thanks to the US's inability to create anything close to a balanced budget and the US' dependence on Chinese goods to keep inflation down.

"Only this is not the trial balloon for the indefinite postponement of rate hikes, those were never going to happen in the first place, but a trial balloon for what the real endgame is here: QE4" Great analysis. As for Goldman, no one listens to them for accuracy, just the most recent tragically flawed trend outlook the Federal Reserve is pumping. It's like looking at dog poo to see where the dog is leading. For the last 5 years it has been going in circles convinced the bone called recovery is hidden there not realizing they destroyed this the second they gave up on capitalism.

What was interesting was the pull downs of the prior overly reported job gains to soften the jobs downturn. As for the Fed, at least positive news the Fed will not raise rates is a bolster to the market, but as I said before multitudes of times, they never had intentions of actually raising rates. This only makes it easier to justify not raising rates. God help us when the next downturn comes and the Fed has already floored rates.

The main problem is not sweeping funds one way or another. The main problem is that the organization requires taxpayers to guarantee the loans and is not built to be solvent but to be used as a political tool to offer loans at too low a rate and to people who can't afford it to support overextended housing prices. Or better put, it socializes the housing market since no one can compete with them and they increased not decreased their size.

One should not talk about the profit end, one should talk about the mass losses that will soon result yet again.

Gee I wonder, with China creating a new global bank where the US refuses to join and with the Federal reserve backtracking on a rate rise for the umpteenth time. The only thing indicating a strong dollar is the Republican Congress that maybe will keep the US budget from going out of control.

In the meantime, what does it matter when the Federal Reserve supports zirpish rates to the banks who goes out and buys stocks, homes, and bonds to the nth degree to keep asset prices up and hedge out real investors too scared to buy more because they don't have government bailout protection. We have just created a intrinsically unfair market with participants who can do whatever they want without consequence. Given this, they should own the whole US. Or maybe they do already.