Bobby, re. bond yield chart, this would suggest a crash in yields will come soon...now i wonder what could eventuate that?
this seems a good opportunity to remind everyone that overheating economies sporting credit and asset bubbles usually do not experience 'soft landings'. they tend to fall off cliffs instead. the inverted yield curve, the sharp falls in bank, transportation , cyclical and consumer goods cos. share prices all convey this very same message: a sharp slowdown, probably a recession, possibly of the secular kind, may be in the offing.
if so, the message from the stock market will get a whole lot more pronounced...
it will be interesting to see if the Fed, like the BoJ before it, will be unable to turn things around this time in spite of printing a lot of money (which it is btw. doing right now. the way billions of dollars (17,5 thereof over the past 4 trading days) in reserve additions are pumped out, you'd think we're in the middle of a crisis already).
i also think that Warren Buffet made an extremely important point in his latest annual report about the likelihood of stock market returns for the next decade to be a lot less exuberant than is generally expected. of more immediate importance to the mania may have been the observation how stock buybacks make only sense when stocks are undervalued, while the current obsession with same actually hurts shareholders in the long run, as they are uneconomical.
more in the here and now, the CBOE total put/call ratio barely budged from record low levels, sell-off notwithstanding. the reading today was 0,43, the 10-day ma remains at a record low of 0,42 for four days in a row.
there's absolutely no concern out there. i guess that's the stage referred to as 'conviction'.
regards,
hb |
