Investors are now so desperate for yield they’re willing to (literally) pay for obscene golden parachutes…
How can a market “take into consideration all potential future events”? Obviously it can’t. That’s absurd. That said, stocks should be expected to discount what we might call “known unknowns.” That is, events that we know are likely to cause turbulence but that also admit of some indeterminacy regarding outcomes. Things that would fall into that category include the French elections and US tax reform.
“Stronger oil demand to end 2016 helps to accommodate slightly higher US oil supply, but we see downside risk to our WTI forecast of $55/bbl in 2018 if our upside case for US supply growth plays out all else equal.”
Morgan Stanley has been warning about richness in credit for months and I’ve often cited their analysis in my own posts. Indeed I’ve said repeatedly that when it comes to tranquil markets and rampant complacency, there’s no asset class that looks more dangerous than credit.
Well, it look like “what happened in Sweden” might well surpass “Frederick Douglass is an example of somebody whoâ€™s done an amazing job,” on everyone’s top 10 list of dumb sh*t Donald Trump’s said.
Tired of sticking around in OATs as spreads to bunds balloon and Marine Le Pen’s chances of becoming President tick higher taking us ever closer to a French redenomination event and subsequent â‚¬1.7 trillion sovereign default?