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All The "Dislocation, Dislocation, Dislocation" Charts You Can Eat

Tyler Durden's picture




 

US stocks continue to breach record levels while highly rated government bond yields slide - - all with the prospect of continued support from the world’s central banks.

Indeed, expectations that the European Central Bank would unveil a package of supportive policy measures when it meets next week were bolstered by the release of select weak eurozone stats. It must be noted that all this cheap money is finding its way into various asset classes, most notably equities and debt products. Hence, record levels for Wall Street alongside historically low sovereign bond yields.

This wild euphoria is supported somewhat by signs of an improving economic environment, notably in the US, but remains way ahead of market fundamentals. U.S. government bonds are heading for a fifth monthly gain, the longest since 2006, as growth --- but not rapid growth --- underlined an appetite for long-term debt of all stripes. The new ranking of global competitiveness has just been released and underscores some of the key themes in these pages. The US leads, Europe struggles to recover, and big emerging markets grapple with some new realities.

Given the ever tighter spreads and the relentless march of markets, some, including the European Central Bank, have warned that investors' wild pursuit of higher returns could be creating new price bubbles, sounding the alarm as financial markets chase quick gains. In a strongly worded message they clearly underscored concerns that have been penned in these pages as well, There may be an ugly downside to runaway market enthusiasm. The ECB cautioned that the dash for higher returns could suddenly unravel, sending the investor herd charging in the opposite direction.

...

Easy money and the timing of the Fed’s policy shift continue to dominate across the globe. Recovery is widely assumed for the next two years. But deep-seated weaknesses have also become more evident.

 

 

Very obvious financial vulnerabilities, repercussions from various political stalemates and serious geopolitical concerns are aggravating the problems of clearly insufficient growth in the world economy. And let’s not forget that many of the challenges cannot be resolved easily...

Full Abe Gulkowitz The PunchLine letter below...

TPL May 29 14

 

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Sat, 05/31/2014 - 12:41 | 4812617 Stockmonger
Stockmonger's picture

That chart was even less informative than your average Krugman chart.

Sat, 05/31/2014 - 12:48 | 4812624 Groundhog Day
Groundhog Day's picture

what is considered high end these days? 500-700k, 700k-1m, 1m-1.5m+?  any real estate ppl on ZH

Sat, 05/31/2014 - 13:57 | 4812697 Colonel Klink
Colonel Klink's picture

Often times it's considered when you need a jumbo loan (417,000+ for most counties), others consider it to be 1M plus.  As with most real estate, it's by location.  What's high end in one market is small in others.

Sat, 05/31/2014 - 12:56 | 4812632 weyes1
weyes1's picture

The intrepid Zero Hedge journal has been covering the story extensively, as always on the leading edge...

Jim Willie and ZH.

It just doesn't get any better.

http://www.silverbearcafe.com/private/05.14/bulge.html

Sat, 05/31/2014 - 13:10 | 4812650 buzzsaw99
buzzsaw99's picture

ecb = jawbone of an ass

Sat, 05/31/2014 - 14:50 | 4812765 HaroldWang
HaroldWang's picture

Seems like I read these reports and same charts every six months or so on ZH. And, as usual, they never pan out. 

Sat, 05/31/2014 - 14:59 | 4812779 Jumbotron
Jumbotron's picture

"Seems like I read these reports and same charts every six months or so on ZH. And, as usual, they never pan out. "

It's called money printing and laundering by Central Banks worldwide.

You can only blow so hard into a popped balloon.  Eventually, the outlfow exceeds the inflow by such an amount that the whole thing collapses....catastrophically.  We are still in the blowing REALLY, REALLY hard mode.  But the blowhards are getting tired....and the balloon is deflating faster and faster.  We just didn't know how hard and how long the blowjob would last.  But Central Bankers seem to be exceedingly good and clever at giving blowjobs.  More than we could ever imagine.

Sat, 05/31/2014 - 16:37 | 4812969 Colonel Klink
Colonel Klink's picture

But Central Bankers seem to be exceedingly good and clever at giving blowjobs.  More than we could ever imagine.

Problem is there will not be a happy ending for the vast majority.

 

**Agree, click the blue name bar, tab, tab, enter.

Sat, 05/31/2014 - 17:15 | 4813075 ebworthen
ebworthen's picture

High end markets are frothy because that is where all the QE went.

Mon, 06/02/2014 - 00:00 | 4815946 AdvancingTime
AdvancingTime's picture

The economic recovery that the media and talking heads have been bantering around does not exist and is just a myth. A manipulated stock market distorted by recent economic policy hides and mask the real truth, in many ways it is ground zero in the war to convince us all is well.

The American people and Main Street will tell you they are far from convinced that it is smooth sailing ahead. Huge weakness in the economy has been shown by numbers that barely get by even after record amounts of stimulus. Fact is if QE or the massive government deficit spending that props up our economy is removed it will fold like a cheap umbrella.

Recent changes in how the GDP is figured , which boosted growth thus reducing the debt to growth ratio, and attempts to spin poor numbers regarding employment have been met with skepticism. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/10/myth-of-economic-recovery.html

 

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