“…what more evidence do you need that the financial markets are completely uncoupled from reality and that these feeble bounces between the 50-day and 20-day chart points are essentially the rigor mortis of a dead bull?”
“And you would think that this might be bullish for bonds, but no, far from it. A Central Bank that is not willing to invert the curve and take the economic hit from forcing a recession is a bond investor’s nightmare. After all, apart from default, inflation is the absolute worse thing out there.”
“The younger of the anchors (age 32) thought the $1.8 trillion was not a problem because the soaring debt and the Fed’s balance sheet shrinkage plan have been well telegraphed and will shock no one. Yes, and as we were tempted to reply, parking on a rail crossing and knowing that a freight train is barreling down the tracks is not likely to forestall the carnage.”
“The Donald seems to think that the 37% gain in the stock market between election day and the January 26th high was all about him, and in one sense that’s true. Donald Trump is all about delusional and so are the casino punters.”
“The historic relationship between trends on main street and Wall Street to go absolutely haywire.”
“In that cyclical context, the historic record leaves little doubt about the foolishness of pricing the stock market at peak PE multiples during the final innings of the business cycle.”
Of course this “fundamentals-based” excuse will be couched almost entirely in terms of the assumed sugar high from myopic fiscal stimulus and deficit-funded tax cuts.
“That was fast.”
“Last week’s twin 1,000 point plunges on the Dow were not errors.”
“Can you feel the tension, in the air right now?”
Flush. Rinse. Repeat. BTFD!
Opinons vary…
Ok, I’ll say it: bless her heart.
“…the very idea that you would pay 26X EPS for the S&P 500 at the tail end of a 103 month long recovery cycle is truly ludicrous.”
“Even as a matter of economics 101, the forthcoming $1.8 trillion of combined bond supply from the sales of the US Treasury ($1.2 trillion) and the QT-disgorgement of the Fed ($600 billion) is self-evidently enough to monkey-hammer the existing supply/demand balances, and thereby send yields soaring.”
“That’s right. Heisenberg reminds us this morning that we are in undisputable record territory. It has been fully 395 trading days since the market had a 5% drop, and that’s never happened before in all of recorded history.”
“Such seasonality is truly remarkable and unlike anything we have seen before.”
“…we know of no melt-up that had legs of more than a few months after the point that irrational exuberance went full retard, as is happening at this very moment.”
“That refers to Wall Street, Washington, the Dems and the GOP, and all the far and near corners of the planet which are implicated in their collective follies.”
“How’s your 401(k) doing?”
“…it’s about to accelerate. Not only that, the tank is full of gasoline, and the car has been stripped of all the extra weight.”
“So when you ask what the big risk is, the answer is”…
“It could happen tomorrow given the extreme expense of US equities and the near universal consensus of a continued acceleration in the economic cycle despite the Fed also in the midst of a tightening cycle.”
“The dot com bubble had the internet. A constant theme of bubbles is the ability of speculators to shout that dreaded cry “this time it’s different.” Logical arguments against the bubble can then be disregarded as speculators declare that the doubters simply do not understand that the world has changed.”
“We are likely to be nearing a low point for major market bond and equity vol, and if the catalyst is policy it will likely come from positive volatility QE ‘flow effect’ being more powerful than the vol depressant ‘stock effect’.”
“The difference this time is that those macro pressures are being combined with a broad array of idiosyncratic negatives.”
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