The investment world is horribly out of position.

That is my harsh conclusion after speaking to dozens of portfolio managers, financial advisors, and hedge fund traders around the world.

Virtually ALL are overweight bonds, or fixed income instruments of endless description.

American high net worth individuals are up to their ears in tax free municipal bonds. Many loaded the boat expecting a Clinton win which would lead to higher tax rates and boost the value of tax free investments.

Instead, we got a Trump win. This dramatically chops the value of any tax free instrument, especially muni bonds. If you don?t believe me, look at the chart below showing the sharpest selloff since the Great Crash.

The last time muni bonds fell this fast, analyst Meredith Whitney predicted that the number of local government defaults would explode to 2,000. In the end, I think, we only got two defaults, both in California.

I have spent the last half century watching professional money managers overweight market tops and underweight the bottoms. And you wonder why I manage my own money.

This is why global bond market losses since the November 8th presidential election now exceed $2 trillion. Next year they will grow exponentially.

So when the Trump euphoria runs out of gas, or at least takes a break, ten-year Treasury bonds (TLT) should rally five points. When that happens, sell the daylights out of them. It may be your last chance to do so with yields at the 2% handle.

Trump is certainly living up to his reputation as The Great Debt Destroyer right out of the gate.

And here is the big question for 2017.

Trump?s gargantuan tax cuts and monster spending increases should boost the Federal budget deficit from $400 billion this year to $1.0-$1.5 trillion next year.

How is Trump going to launch a trade war against China when he needs them to buy up to $750 billion of our new government debt?

This dilemma should certainly put his much vaunted negotiating skills to the test.

Less than three weeks after the election, Trump is already adopting Hillary Clinton?s business, trade, foreign policy, and trade strategies, one by one. He is, in effect, turning into Hillary Clinton.

But Wait! It gets worse.

Not only do investors lack adequate weightings in equities, they own the wrong ones.

They are loaded to the gills with high growth technology stocks, and almost completely lacking the shares of companies that were pariahs only three weeks ago, like financials, health care, construction, commodities, energy, and defense.

Call it the double underweight.

It will take many months, if not years, for institutions to rebalance their portfolios into the right asset classes and industry selections.

The good news is that the net push on the major stock indexes will be to the upside. That?s because managers will be selling stocks at seven-year tops and replacing them with those at five-year bottoms.

Technology is not dead for good. It is just resting. It will come roaring back after a long overdue three-six month correction.

Don?t throw away stocks today that you may have to buy back ten times higher in a decade.

Having said all that, all asset classes are now sitting on top of extreme moves, both to the upside and the downside, and are far overdue for corrections.

While stocks have been rising, so has the Volatility Index (VIX), (VXX) for the past two days which is never a good sign.

As they used to say on the eighties TV show, Hill Street Blues, ?Be careful out there.?

As for the week?s data releases:

Monday, November 28th at 10:30 AM EST, we get the Dallas Fed Manufacturing Survey.

On Tuesday, November 29th at 10:00 AM EST, we get a new update on the Q3 GDP Growth. We?ll see if the previously reported hot 2.9% annual rate can be sustained. November Consumer Confidence follows at 10:00 AM.

On Wednesday, November 30th at 2:00 PM, the Fed releases its Beige Book, the most current look at the state of the US economy. The three Fed speakers on Wednesday should all tilt hawkish.

It is also month end, so the window dressers will be out in full force, probably taking markets up to higher all time highs.

Thursday, December 1st, we learn the Weekly Jobless Claims at 8:30 AM EST. The PMI Manufacturing Index follows at 9:45 AM EST.

On Friday, December 2nd, we get the big number of the week, the November Non Farm Payroll Report. This month will be especially important, as it may give the first hint of real post election business activity. This could be our one shot at volatility for the week.

At 1:00 PM we get the Baker Hughes Rig Count. We?ll see if falling oil production puts a dent in US oil production.

Keep in mind that virtually all economic indicators will be useless for the next two months because they will only reflect spending and investment conditions prior to the November 8th presidential election, and will be for a world that no longer exists.

Will the economy improve, reflecting a new optimism for the pro-business administration?

Or will it get worse, showing the rise of uncertainty pending a 180-degree change in US economic policies and a massive expansion of the national debt?

We shall see.

You would think having a real estate guy for president would be good for real estate.

That is not necessarily so.

Remember that Donald Trump went bankrupt four times with his property ventures. You may lack his skills in extricating himself from these misadventures, let alone reap a billion dollars in tax benefits.

Suffice it to say, it?s complicated.

This is important because most people's best performing investment over the past five years has been their home.

Depending on where you live, and the amount outstanding on your mortgage, the return could be as much as 1,000%.

There is no doubt that the initial impetus a Trump economy will have on residential real estate is positive.

The magnitude of deficit spending that Trump is talking about with jobless claims at all times lows is highly inflationary. Trump wants to throw gasoline on the fire and toss in a few sticks of dynamite for good measure.

Real estate is the best inflation hedge out there.

What?s more, rising incomes will increase purchasing power in what is already a supply constrained market.

As a result, home prices should break free from the current sedentary 5% annual increases to 10% or more, for at least the first couple of years.

The dark side of Trump?s economic policies is that interest rates have taken off like a rocket.

This was already a work in progress as the entire world was already expecting the Federal Reserve to raise interest rates at their December 14th meeting.

The Trump win put a turbocharger on this trend.

Yields on ten-year Treasury bonds have leapt from 1.33% in July to 2.30% today, a near record increase of nearly 1.00% in less than four months.

The initial phase of any rate hiking cycle creates a stampede, as buyers rush to beat interest rate hikes and lock in low 30-year rates.

This is a big deal.

For the past five years, I have been advising readers to refinance their homes with ultra low interest rates offered by 5/1 ARMS or adjustable rate mortgages.

The assumption then was that rates would remain lower for longer under a Clinton administration, and that you could always refinance again at near zero rates during the next recession.

That assumption has gone into the ashcan of history, so I changed my mind.

In the Trump world, you want a 30-year fixed rate mortgage. While the rates here have jumped from 3.45% to 4.01% since July, this will appear laughably low in three years.

Despite the recent pops in rates, they are coming off 200-year lows for the US, and 5,000 year lows for the rest of the world. They have a lot more to run.

Higher interest rates bring a stronger US dollar, so the inward flood of foreign investment from abroad, primarily from China and Europe should increase.

But it won?t go into New York penthouses, the kind that Donald Trump sells, because new anti-money laundering statutes have created a cloud over this market.

Instead, foreigners will flock to commercial real estate, or the McMansions that have recently proved so popular.

Trump has also promised to repeal the Dodd-Frank financial regulation bill. This will make it easier for banks to lend, especially to low income families with lower FICO scores.

Subprime is about to make a big comeback.

If you are planning to sell your home, definitely delay the closing into 2017. While no specifics have been mentioned (as with everything else), the reduction of long-term capital gains taxes has long been a Republican panacea.

Delaying a sale by a few weeks could cut your tax bill by hundreds of thousands of dollars.

That appears to be the new game -? avoiding taxes.

One potential threat to housing would be the demise of Fannie Mae and Freddie Mac.

These two quasi-governmental bodies recycle home loans from the private sector and went into receivership after the 2008 crash.

The United States is the only country in the world that engages in this kind of activity which has delivered a long term push on home prices upward.

Trump surrogates have promised to eliminate these two entities, or at the very least, privatize them. If that occurs the bulk of conforming mortgages will lose their de facto government guarantees.

That would bring much higher long-term interest rates, possibly 100-200 basis points, a definite buzz kill for residential real estate.

Unfortunately, this story does not have a happy ending.

While short-term stimulus will deliver a higher high in real estate prices, a lower low will follow when the stimulus ends.

Boom and Bust, that has been the never ending cycle since real estate was invented. Even Donald Trump can?t repeal the Law of Supply and Demand.

While the next bust is probably at least a couple of years off, the seeds of the next financial crisis are being sewn as I write this.

Rape, pillage, and plunder, that is the new investment strategy.

Just don?t forget to sit down when the music stops playing, as millions did in 2008.