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What’s Behind The Rally? It’s The Liquidity, Stupid.

"And I think we ought to be sensitive to that".

"And I think we ought to be sensitive to that".
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7 comments on “What’s Behind The Rally? It’s The Liquidity, Stupid.

  1. mfn says:

    It is the liquidity, it is ONLY the liquidity, and as quickly as we rocketed toward 3,500 on the S&P is how quickly we could collapse to sub 2,333 (Grasso’s line in the sand) if the Fed — and other CBs decide for realz to yank away the punch bowl. And that is way too much pain for everyone…at least, everyone who counts. So the CBs will keep providing liquidity, with a wobble here and a wobble there, until they no longer can. How long? BoJ has been at it for twenty years and shows no signs of losing its enthusiasm. My best guess is that it will be generational: when close to the last boomer has finally thrown in the towel and shuffled off with whatever he/she could scrape together for retirement is when it will end. And then we’ll have what John Mauldin calls a debt jubilee…hallelujah, all is forgiven…or almost all. Methinks Bernie and Liz are are three, four election cycles early. But they’re laying the groundwork….

  2. Anonymous says:

    Liquidity allows for zombies which combined with secular forces hold inflation (as measured) at bay. The Fed’s bal sheet will be > $10tn in a decade. There really is no way out. Normalize and you will get a depression. Bank capital will prove to be inadequate. They know it, they fear it, so it will continue. And IF inflation shifts from assets to goods and services they have to let it run hot as a Volcker experience would doom the system. It is miles worse today than in 08 and will be even more precarious in 30. But if we all pretend everything is fine it will work out, right?

    Oh and the trump org will be bankrupt in 2030 I suspect as the Russian and Saudi money will not offer a lifeline as the party of trump will be relegated to the dustbin of politics.

    But all is good so let’s pay more for those future earnings (asset inflation). Glad it is shoring up pensions and retirement accts………………

  3. jyl says:

    Time for someone to say “as long as the music is playing, you have to dance”

  4. Anonymous says:

    They are too drunk to say it and the music is too loud. Everyone is Chuck nowadays JYL.

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