Doug Kass compilation of concerns

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• The Fed Chairman seemed more hawkish in tone recently

• Rising interest rates provide an alternative to stocks and reduce the value of long-dated assets.

• Higher inflation (input costs) will pressure corporate margins and profitability.

• A pivot in global monetary policy towards constraint from easing.

• Policy risks.

• Midterm election uncertainties.

• Fiscal policy that has trickled up (not trickling down).

• Our Administration’s trade policy and (as expressed in my missives this week) reversing the post-WWII liberal order holds multiple social and economic risks.

• Increasingly leveraged public and private sectors.

• A leveraged and dangerously weak European banking system who’s left-hand side of the balance sheet is loaded with overvalued assets (like sovereign debt).

• Submerging emerging markets vulnerable to large U.S. dollar-denominated debt that will be difficult to pay off.

• China’s economy is faltering – and its financial system is too leveraged.

• Investor complacency – not a soul in the business media (save the Perma Bears) has warned of a large market markdown since the January highs.