"Everything is awesome" is the new narrative. How can it not be with stocks at record highs (just like they were in 2007 after Bear Stearsn liquidated two funds)? The only problem is, only 15% of S&P 500 members are at 52-week highs - less than half the 40% of names at a peak when the S&P 500 first breached 2007's record high in 2013.
And in The Dow
As we noted previously, in 2007, after Bear Stearns shuttered its two subprime funds there was the quaint theory that everyone should pile into simple stuff like the S&P 500 to avoid those misbehaving and suddenly not understood derivatives that had nothing to do with the broader economy. Remember the new all-time highs, or what happened after?
The irony is that central banks have embraced that logic. Let them “put” it to you this way.
It’s not only the gross distorting of markets through misguided monetary policy. Ever since the U.S. was downgraded there’s been no realistic appreciation and respect for risk; credit or geopolitical.