“We May Very Well Be Past Peak Optimism”: Here’s What Comes Next

If you really know markets, then you know that last week's biggest story was plunging German 2-year yields. To the uninitiated that sounds horribly esoteric and worse, terribly boring. But it's not. What you're seeing is a remarkable divergence between one of the world's safe haven assets par excellence and risk assets. The disconnect is readily apparent in the following chart: How can risk (stocks) be buoyant amid such a massive Schatz bid? One explanation, as SocGen wrote on Friday, is