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No! The US Is Not 'Decoupling'
It's that time of year again... when sell-side strategists and status-quo narrative defenders aggregate en masse around the 'outperformance' of the US economy compared the rest of the world (which - they note - explains why US stocks are outperforming as the US is the cleanest shirt) and declare - unequivocally - the US has decoupled.
The only problem with that meme - it's total and utter rubbish in the increasingly interconnected world in which we live, wage currency war, and trade with one another... as the chart above shows, its simply a temporal issue, not a structural decoupling...
Charts: Bloomberg
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Every year. Getting tiring. MOAR propaganda and Perceptions Management. Works ever so well with pumping financial assets, no? Ah to be in Heaven now that Hell's Still Here.
PS Any chartist would look at that history and conclude that the correlation is amazingly high but the US Macro's Variability is significantly greater than the G10 Macro.
Lemme think about that.
OK I think
So what....
Oh, it's for the children and the Muppets
PSS Thinkin' 'bout the chill'en, Macro-oni's not on the lunch menus anymore... so ignore it.
Decoupling from what? We have the most corrupt Central Bank on the planet; but the competition is close.
Central banks should just send us tax free checks for fiat, and Gold and Silver and free healthcare if we show up for work.
it is different this time. this time we will surpass zimbabwe and go to the moon!!!!!
Whatever keeps the ideologically blind and useful idiot teat suckers bellying back up to the bar is what will be promoted. The oldest tricks remain the best tricks to tell people precisely what they want to hear.
"It's easier to fool people than to convince them they've been fooled." Mark Twain
The train has decoupled. The bankers cut the middle class cars from the engine and have sent them on their way over the bridge that is out.
Its better to decouple, than to couple alone!
Much of the boost to American markets may be coming from money that is fleeing other countries such as Japan. Cross border flows are often harder to detect than you might think. It is hard to imagine how much this is distorting the economy, markets, and reality in general.
Money has become so cheap to borrow that many people are now arguing that you must take it even if you don't know what to do with it. A total disconnect between life on main street and the financial world is occurring and it is putting the economy in a very dangerous place.
It is often hard to determine what is true, but a report on Bloomberg that 32 Trillion dollars in funds were held in offshore accounts around the world made me shutter. How safe is this money, and what exactly is it doing? Can you say Cyprus? More on this subject in the article below.
http://brucewilds.blogspot.com/2013/05/cheap-money-more-and-more-and-mor...
I think this comment is spot on. Folks with just plain old savings are "being terrorized" by inflation (Japan/China, Argentina, Venezuela, etc) or outright confiscation (Europe.)
This is not the first time this has happened in some of these places.
It's possible that the USA may default on its obligations (debt ceiling talk.). Ironically though it was the Dem's not the Republicans "throwing down the gauntlets" on the US debt being sacrosanct as repayable.
I always found it interesting that none of the political analysts pointed out the incongruity of this "view from the left." I can't think of a single Republican who wouldn't LOVE a huge shot of inflation and "debt debauchery."
Of course "they're shocked...SHOCKED" by what happened to Detroit (et al. And "no, don't look at our finances either Mr Nosy."!)
This whole dollar surge is not part of the plan folks. Exactly "who" or "how" planned (yes, we still have the penny in the USA) is really a mystery to me.
Could be one of those wrath of God things of course...
oops
It would be nice to graph the difference of the blue and red line.
It seems the peaks also signify the cycle peaks.
it doesn't matter.
Macro up; escape velocity achieved! e-minis to the moon!
Macro down: moar QE! e-minis to the moon!
blue line breaking out!!
Strap you seatbelt tight.
Hold on and hope you don't get sucked up when the aliens come..