Europe In One Chart

Tyler Durden's picture

How much is the 'promise' of a European Central Banker worth? As European macro data in the last month has plunged at its fastest rate in 6 years, equity markets have, of course soared back to near multi-year highs (EuroStoxx 600 up 5% in the last week alone). We only hope that the equity markets really do know something different this time - as opposed to the last two times we saw this kind of disconnect. The answer - Draghi's 'whatever it takes' promise is maintaining a 30% illusion of wealth in European equities over their macro reality.

It's different this time - the disconnect that we have seen twice before in the last 5 years is 'transitory'


as the last 25 days have seen the biggest plunge in macro reality in almost six years...



Charts: Bloomberg

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HD's picture

Think of a wonderful thought - any happy little thought....

...You can fly, you can fly...

markmotive's picture

How much is the 'promise' of any economist worth for that matter?

With Rogoff and Reinhart discredited by a graduate student, who are we supposed to believe?


HD's picture

Economists are worthless because they will not think outside the box. The adhere to their models and ignore any information that does not "fit" as irrelevant.

dunce's picture

I recently ran across a definition of an economist as someone that sees a functioning economy and wonders how it would work in theory.

BadKiTTy's picture

"in theory there is no difference between theory and practice. In practice there is"


DavidC's picture

Steve Keen is one economist I would always listen to and genuinely thinks outside the box.


Vuke's picture

You should put absolute faith in your financial advisor and his/her economist.  And, be sure to pay your taxes and credit cards on time.

spine001's picture

in markets like in nature you must let natural forces take over and cleanse the populations. Forest fires play this role. The more you avoid them the more likely they become until they finally happen, get out of control and you get a major disaster. There we learned to start the burns ourselves in a controlled manner and to plan and rotate the burns. Economists should stop their megalomaniac drive to autodestruction and accept the hard leasons learned from nature, about natural equilibrium and evolution and do the same before it is too late and it self burns out of control. Sooner or later nature has proven that it will find the way no matter what we do to try to prempt it.

Until next time,


white_guy's picture

great post.  An analogous way to point this out is through the principle of minimization of the Gibbs free energy of closed systems at equilibrium....which of course directly follows from the second law of thermodynamics.  The further we get away from equilibrium, the harder it is to maintain, and the harder the inevitable fall will be.  Even economic matters cannot escape the beautiful generality of the second law. 

Miss Expectations's picture

In my neck of the woods, the planned controlled burns get out of control at least half the time.  Even when it's windy, they just light the woods on fire anyway.

W T F II's picture

Let the markets clear is NOT in the lexicon of this generation of central bankers. We will ALL regret their folly...

A Lunatic's picture

These charts are looking more like sharts every time I see them........

e.blair's picture

What does that mean, "macro"?  What is the definition?


piliage's picture

To an economist, central banker, or trader? It means absolutely nothing.

q99x2's picture

Italy is supposed to get a new president that is aligned with the Troika.

That should extend the pretend for a while.

1eyedman's picture

check out consumer metrics....near cliff dive of daily econ acitivity....they'll wish for a 2.5% gdp miss in about 60 days.  it does push out any kind of 'official'  recession for another 7 months.    "this is not the recession you're looking for...."

vote_libertarian_party's picture's like, bullish???

CURWAR2012's picture

uh, that's 2 charts.

PubliusTacitus's picture

Draghi says uno.


Uno charta.


Is okay, see?

W T F II's picture

Please call me when Draghi buys his first post-"anything it takes" OMT bond...I am going back to bed now...

PubliusTacitus's picture



All your markets are belong to us nows