$Russell 2000 Index (.RUT.US)$ I mentioned this on TNA which...

$Russell 2000 Index(.RUT.US)$ I mentioned this on TNA which is the leverage Russell ETF and a few other places so I might as well just throw it here. Tom Lee is the one who started all this momentum going into the Russell he's brilliant he's got an amazing track record and the premise behind moving into the Russell is if you have just 5% come off of The magnificent seven companies and it goes into the Russell it's going to be about a 20% gain for the Russell and that's because a lot of these companies are small cap heavily shorted and there's a natural logic that when interest rates come down these companies will be able to refinance their debt and have access to Capital at lower rates so that they can grow.. so that's the premise the floor and I posted this multiple times elsewhere is if interest rates are coming down that means economy is slowing which contradicts the primary reason for buying a small cap because they need a strong economy to grow in not a weekend economy that's number one number two right now these small cap companies are borrowing anywhere from about 11 to 13% from Banks that's a very high interest rate because it's risked based. so what gets a quarter point going to do on a rate cut what's a half point going to do what's one full point going to do the answer is nothing because they're not going to save any money by refinancing at a point they need rates to come down significantly 150 to 200 basis points. considering we haven't even had one cut yet to get to 150 to 200 we're talking the back half of next year. and considering that the past 4 years the Russell earnings have declined in a weekend economy they're going to decline even further which means they're going to miss earnings which means the stocks will be penalized. 40% of the Russell are losing money 20% of the Russell or regional Banks everybody knows about the trillion dollars that has to be refinanced and commercial loans and the value of these properties have not been what's called Mark the market in many years so for property was 100 million and it's in 50% vacant it may be only worth 20 million right now. it's an 80 million loss to the bank that underwrote that loan which means they're going to miss earnings. now you compound this market sell off and historically people buy the biggest and the best companies when a market gets hit hard they don't buy small caps.