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From Risk-Return To "No Risk, No Return" Courtesy Of Central Planning
Central Banks have repressed the sovereign bond markets of the world's currency printers to extreme. This relative pricing makes stocks look extremely cheap on an equity risk premium basis (thank you Ben); however, everyone knows this and, as we have discussed many times, margin balances and net long positions are as high as they have ever been. A zealous belief in the power of the central bank has compressed the market's risk perception to near-zero - but at the same time, returns have been crushed as even junk bond yields are at record lows. In other words - there is no risk any more, and no conventional return. Or rather, the only "return" is in the wholesale herding of cattle into the "safety" of the equity beta butcher house.
Equity risk premium (relative to repressed bonds) make stocks look 'attractive'...
But everyone knows that...
leaving No Risk...
and no conventional return either...
This won't end well...
Source: Diapason Commodities
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I wonder if Moo Herrera ever contemplates QE when she pulls her SUV full of fat-faced kids into a Westchester gas station and has to "fork" over $110 for a fill-up...?
-"This won't end well"
Sure it will, it is different this time, Ben says so.
I would love to donkey punch that sloppy MILF in her Honda Odyssey in Whole Foods' parking lot
funny how you had no risk from 2004 right until 2008.............
That is what I keep telling people. VIX was in the teens in August 2008. 4 weeks later it spiked over 100.
Yeah ~ but then we elected Morgan Freeman, & the waters...... Receded...
~~~
Because he ws so smart to notice that 'PROFIT TO EARNINGS' ratios were out of whack... Amazing ~ that guy!... Got him another 4 years on the job, where, undoubtedly, the waters will recede even further...
a youthful morgan 'alfred E' freeman, pale'd by the hard times... yet still keeping up appearances-- earning them's freckles...
http://www.comicvine.com/mad-special-hard-times-survival-issue/37-167020/
,knowing hope and change will buy his daily does of, meworry, for a wonderbread of levitation?
New SP high for year for the weekend is what I anticipate. Why stop now?
Sounds like a bubble to me! When there is no perception of risk, then risk rises to unprecedented levels without being recognized! That's where we're at!
Unless we bomb out Russia / China / Iran etc and seize control of world oil prices (Brent), BB will have to halt printing for a bit.. or does that nigga welcome $150 oil ? Maybe he can buy a few more months of printing if he releases the strategic reserves.. but when do folks start selling stocks into his liftathon anticipating his hand being forced to suspend printing because of oil prices ?
Suspend printing? Riiiight!
They'll just grab a different bucket to fill in an attempt to keep all those monies out of commodity markets (with the exception of shorts).
"They'll just grab a different bucket to fill"
They sure are catching a lot of leaking water with all those buckets...suppose they'll miss one someday, and the ceiling/structure will just collapse?
The risk free rate of return has morphed into Return free risk....
Especially when you consider real inflation.
Has anyone considered what a proposed floating rate return on new issued Treasuries would do to a current Treasury's price?
Central Banks are privately owned. By the Rothschilds, Rockefellers, et ilk. They print our money and lend it to us! Deliberately saddling the World with debt. JFK knew, fifty years ago, that the Federal Reserve was destroying America with debt. He publicly vowed to abolish the Fed. He was assassinated. The private banks should be abolished. Global debt will be erradicated, instantly. The Illuminati cling to their rapidly diminishing power, but they know the Truth, and the Internet will defeat them. Not to mention a little help from the Galactic Federation. Pray like you never prayed before. God will answer your prayers.
spoken like a true tin foil hatter. good luck with that prayer.
Had to bring the 'Galactic Federation' into it... Jews have informed everyone that THEY are 'God's Chosen peple'... Also ~ Blankfein & Co. are doing 'God's Work'... So if you're waiting for God to answer YOUR prayers, you better take a number & stand on line...
mmmh... that's actually incorrect, most central banks are actually national banks, for example the Bank of England was nationalized in the 50's
yes, the FED is private, but Bernanke was appointed by the President of the USA and confirmed in congress, as per US law
if you really pray for a demise of the CBs, then you'd have to wait for a catastrophic hyperinflation bringind down the currency to zero, and then strike - since Ron Paul was not elected, that is
but on the moral side I'd have to ask one little thing: "...and lend it to us...": what was the root cause of that lending?
even simpler: why debt?
Why debt? So the populace can be taxed. They tax everything, reducing disposable income intended for enjoyment of life. And the taxes keep on rising. Rising. Rising. Untold misery is heaped upon mankind. They poison our food, poison our air, and try to poison our minds.
"Why debt? So the populace can be (taxed) controlled."
There, my take.
Plenty of empty lifeboats on the other side of the ship.
<And still no takers.>
Funny (actually just appalling, like everything else) how the central bank manipulation has supported dichotomy bubbles: dividend payers on the one hand, even if in some cases (especially utilities) they are paying the dividend out of growth capital; and on the other hand, ridiculous sky-is-the-limit valuation companies with only virtual earnings like AMZN, CRM, and today see LNKD. Sick and, yes, as the poster says, this will not end well.
OFF TOPIC but nowhere else close to related.
http://www.24hgold.com/english/news-gold-silver-fake-american-eagle-silver-coins-surface-in-canada.aspx?article=4226370308G10020&redirect=false&contributor=Charleston+Voice
after the 30s there was a generation who didnt take on debt, didnt invest in the stock mkt, barely saved money in banks. currently, while the msm opines on how main street isnt participating (they are, via 401k; just less marginal players), the reality is people are bullish that while the empty houses on their street, their constanct risk of job loss, lack of savings, friends/family/neighbors all underemployed if at all; will somehow work out since the stock market is up.
the fed thinks if assets are expensive the economy will get better. in reality, a good economy makes assets worth more.
this whole 2000 to present hasnt shaken a generation off the mkts. whe it 'doesnt end well' and young, old, bond people, stock people, commodity people all get creamed together, and as a society it becomes distasteful or embarassing to buy anything 'on time' (credit), will mark the end of this cycle.