Have 'Investors' Reached Their Post-Panic 'Animal-Spirits' Peak?

Tyler Durden's picture

It doesn't get any better than this - or at least in the last 30 years we have not seen a post-panic rally in risk appetite extend beyond the current length of this move. Credit Suisse's Global Risk Appetite index, which is notably tracking lower with ISM New Orders data, has not extended beyond this time-frame from any of its previous 'deep-panic' peaks. While equity markets contonue to diverge higher, risk appetite is notably lagging and one has to wonder if that historical 'animal-spirits' trough-to-peak period (which is set to coincide with Jackson Hole, FOMC, and ECB meetings) will hold once again as hope fades and reality rears its ugly head.




Charts: Credit Suisse

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Hype Alert's picture

Is there anything but bullish?

HarryM's picture

What's the point of any of these articles anymore?

The only S&P worth watching anymore is Sports & Porn


ihedgemyhedges's picture

We also haven't seen in the last 30 years:

ZIRP, NIRP, QE1, QE2, Twist, LTRO, ESF, etc etc etc etc

Hence, your post panic "rally"...........................

francis_sawyer's picture

So based on that graphic, we can expect to see a 'rally' until day 360 as a reversion to mean? Right? Right?

Hey Credit Suisse... They pay you for this shit?

I mean, c'mon man... The squiggly lines could represent anything...

The first 3 (& their averages), could resemble my fucking DICK priapism after seeing naked fotos of Christina Hendricks, Jennifer Love Hewitt, & Alyssa Milano... Then the most recent, being Kim Kardashian (which is innately similar, but then fails in comparison, but then, u never know, she could do something REAL SLUTTY between day 240 ~ 360 to put her back on course on the 'Celebrities~ILF' meter)...

NaiLib's picture

Well from my desk I can see thatCredi Suisse is the one and only driver of the European indices. They do whatever it takes to Press, push crank etc Dax and OMx against all other participants. And its been going on for months.........

CH1's picture

Peak Denial.

Peak "I want to believe."

Assetman's picture

I'm having a little trouble understanding that "risk appetite" in this context really means.  I mean... how is it actually measured?

I think the reality is that the Fed is "force feeding" risk-taking  into the markets with the help of the primary dealers.  The Fed is ensuring that being "risk-adverse" is a no-win situation by setting real (inflation-adjusted) rates below zero-- for a period that is likely to be extended under ZIRP (and perhaps NIRP in the future).  More liquidity (via deposits and reserves) is being pumped into the banking system than has been needed-- but more liquidity is being pumped anyway. 

Sitting here as an armchair quarterback, I'm thinking that the Fed can maintain this divergence (between risk appetite and new S&P 500 highs) for as long as they possibly want-- despite the obvious 'unintended consequnces' down the road.  What's more troubling in my mind is that the Fed seems to be almost willing to throw away its stated target for core inflation (2-3%) to ensure that this forced risk taking stays in place.

So what exactly breaks this divergence?  Bond vigilantes???

caimen garou's picture

reality, a word not many people know the meaning of or do not live in the world of.

CH1's picture

Animal spirits are all that exist. I saw it on TV!!!

old naughty's picture

so bull-ish,

animal "spirits"

Racer's picture

It's different this time... tis only 'they' in the market now

old naughty's picture

so... eh,

they get all the credits then.

SWCroaker's picture

Do HFT algorithms have "spirit"?  Do PPT actions attempt to model the aggregate behavior of the near-extinct investor?

It seems a bit insane to use analysis based upon the movements of masses of individuals to try to predict the coming consequences of mindless computer code and a few flunkies madly tossing levers back and forth behind a curtain.

Probably I'm just being dense and that was the point of the article title from the outset...

Dr. Engali's picture

Investors...now there is a quaint word. Didn't they go by the way of the buggy whip?

Doubleguns's picture

Buggy whips are still here. What are you talking about? Check out bedrooms across America.

SheepDog-One's picture

Nevermind all this...who wants FREE MONIES?? :D

LawsofPhysics's picture

What "investors?".  Are we talking about trading robots?  WTF?

Freddie's picture

Hope and Change with America's islamist.

adr's picture

SO what the graph really means is that the Fed did an amazing job to make bullshit look like a recovery for as long as previous real recoveries. Now there is data to show that letting the market fall is just allwoing previous history repeat.

Then they can stage a new recovery and stretch an even thinner line of bullshit out as long as possible.

hedgeisforpussies's picture

zeroH perferct contrary indicator. at 1520 i will sell. path of least resistance is higher. 

scatterbrains's picture

It's checkmate, the markets have captured the fed.  Should the Berstank not announce something big then down the shitter goes the market, until he relents and gives the market what it needs.  Fed is completely out of control and held hostage to the "market"now.

Going forward then you can see how the only thing worth holding is gold and silver as the tug and pull between Berstank printing money, and the market tanking for more goes on indefinitely in a ripple pattern with larger and larger waves in the future. One needs to have a sense of timing for when Ben tries to force a break of this cycle (which I'm sure he'll try and fail) to short gold (or hedge your physical). As it is now it's a pure all in print mode. That said I still havn't taken my short gold hedge off yet but 1675ish is about as much as I'm willing fight over.



adsanalytics's picture

A lower ISM is not necessarily a bearish indicator - given the mean reverting nature of economic activity an overheating economy is due for a reversal which is bearish for equities. In fac, a historic forward return analysis suggests (after the jump) that the lower the ISM, the higher the forward equity returns.