Just Two Charts

Both short-term and long-term, the large liquid US stock market indices have become massively decoupled from the bond and credit markets. Since the former is supposed to discount a combination of the latter (macro growth/de-growth from bonds and micro business-risk/cash-flow-sustainability from credit), one has to wonder which reality will come to pass...

 

Short-term...

 

Long-term...

 

Do either of these charts look 'normal'? Sustainable?

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Simply put - for American companies, despite the fall in Treasury yields, the cost of borrowing (i.e. interest rates) has already started to increase rather dramatically and that's not just energy names.

Charts: Bloomberg

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Don't worry though, it's different this time...