Black Every Day?

Countries in Europe are seeing massive speculative inflationary prices. I wonder if the dominoe will go in the other direction this time? Where are my European CDS?





http://www.zerohedge.com/news/2015-...-paradise-quadruples-down-after-dovish-draghi

 

Roman empire crumbled under massive debt. British empire fell from grace due to enormous debt. Uncle Sam seems to either willfully forget about the past or is suffering from Alzheimer's disease. Either way, it requires hospitalization.

 

But did they borrow at negative interest rates?

 

I want to see the same chart I posted for banks around the worlds' exposure to China, but this time banks around the world exposure to Sweeden, Norway etc. Nordic countries.

I bet you U.K is numero 1 in exposure.

 

I wonder how many investors assume that they are fleet footed enough to get out before the big one comes?

One day, the ES is going to open locked limit down. Until then, keep drinking from Financial Engineering punch bowl!

 

Who? The government or the ones fooled by the government?

 

Well, I am assuming the entity that borrows is the one that eventually can't service the debt. My point is that servicing debt at negative IR, assuming you can keep it there indefinitely, well you only have to pay principle. I don't know what the IRs were in your historical example(s).

I am not disagreeing with you. I am just pointing out that zero/negative IRs are crack cocaine because they can't stay there indefinitely, and either you die or you have to cut the habit - both lead to bad outcomes. My guess is that is the real reason the FED can't raise IRs, and why guys like Schiff say that zero or even negative IRs will perpetuate until an external force forces the FEDs hand - they will "never" be able to raise voluntarily. And that is what the market is going to figure out eventually. Already people are beginning to distrust them with their perpetually one excuse after the other, and the game is up. You can fool some of the people all of the time, or all of the people some of the time, but you can't fool all of the people all of the time.

The old argument that the FED takes with one hand and gives to the other, or essentially borrows from itself, no longer makes sense either. It is not what it enables internally, but externally to itself that counts. Just look at all the diagrams above.

 

Does the buyback index lead the market? I say there is nowhere near enough data to tell. But one thing is clear, it is all based on cheap money to boost stock price. It is not being used for R&D to grow the company organically.



This index signaled the 2000 and 2007 crashes—and it's falling again

http://www.cnbc.com/2015/10/29/this...0-and-2007-crashes-and-its-falling-again.html

 

Agreed Nitro. I mean if they want to make a statistic, they must as well talk about the presidential cycle, because we at least have 25 data points rather than 3.