Optimism And Fact

Just to drive in the point of what is really happening on the green shoots front, I present a housing starts and housing permits chart. Yes, those second derivative inflection points - they turned out to be smoke and mirrors. Just as will all other second derivatives, as the economy continues collapsing, albeit a little slower.

What is interesting is that the CBOE put/call has become a mirror image of economic reality, and the option optimism has merely increased in more or less a straight line not just since March, but from a low early in 2009, and is now at asymptotic levels again. Oddly, the futures were the best predictor of the shadow buying the S&P futures.