Judging by all the bearish commentary unleashed in recent weeks, one would think that the S&P has lost half of its gains since the artificial central-bank driven levitation was unleashed in 2009. Instead it is just over 10% below its all time highs. Still, for many the lack of the low-volume, low-vol levitation they have grown to love so much over the past 7 years, is making them nervous.
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
If we collectively choose wishful thinking, catastrophic consequences are guaranteed.
Wishful thinking has been an integral driver of the "recovery" 2009-2015: asset bubbles aren't bubbles, central bank policies are brilliantly successful, unemployment has dropped to levels of full employment, and so on.
The problems with wishful thinking that I describe in my book A Radically Beneficial World are becoming more apparent by the day:
Something strange is going on. Heading into the Friday open, in his daily letter to "clients", Dennis Gartman said that in his "retirement portfolio" he was short the market and long gold, to wit:
With investment grade credit risk soaring, it's now or never for many firms to lever up at "relatively" low costs and two of the biggest buyback-ers are stepping up to the debt issuance window this week. Perhaps helping to explain the carnage in Treasuries at the end of last week (as rate-locks are set), Apple has unveiled a 10-part deal which could price today and IBM a 7 part deal. No size is indicated yet but Apple's previous two issuances were $8bn and $6.5bn.