The Problem With Competing Views….

Tyler Durden's picture

Submitted By Yves Lamoureux of Blackmont Capital

US dollar bears should take notice of the great correlation between global liquidity annual change rate and the dollar index.

We view this big drop as a positive development for the dollar.

It is tempting to get on board with talk of the greenback going into freefall. However if taking a look at the graph one can reflect as to the big picture in the making perhaps then you can arrive at a different set of conclusions.

We stand in the deflation camp and have been accumulating long term Treasuries since June .Our behavior is very similar to primary dealers. http://www.zerohedge.com/article/guest-post-observations-unusual-bond-deal-behavior

The problem with competing views is that the bond market looks out to
the medium and long term horizon while stocks today are mostly
concerned with the day to day fluctuations.If you were confused , you
were not alone. Investors needing to be protected are pushing managers
and advisers to invest at all costs if not beware. The fast move up in
equities makes you react the same way as when a drop occurs. You behave
out of fear. There is no doubt that a bull market of regrets will ensue.

And for an indication of what happens when you see a fear and confusion driven melt up such as the one we are experiencing in equity markets now, compare these two charts:

 

Yves Lamoureux, Investment Advisor, Blackmont Capital inc

The opinions contained in this report are those of the author and are not necessarily those of Blackmont Capital Inc. Every effort has been made to ensure that the contents of this document have been compiled or derived from sources believed to be reliable and contains information and opinions which are accurate and complete. However, neither the author nor BCI makes any representation or warranty, expressed or implied, in respect thereof, or takes any responsibility for any errors or omissions which may be contained herein or accepts any liability whatsoever for any loss arising from any use of or reliance on this report or its contents. BCI is an independently owned subsidiary of CI Financial. CI Financial is a Canadian owned diversified wealth management firm, publicly traded on the TSX under the symbol CIX. Blackmont Capital Inc. is a member of CIPF and IIROC.