Thur, 11 Jun -- Are You Not Entertained!, page-106

I don't think the bear's are getting too excited just yet..

It's still very early in this whole piece. To really get keenly bearish, I would want to see the XJO back under 5600.



But to your piece prawn man.

I can't help but think that the analysis is a little simplistic.

If CB's could actually just fix everything, what has gone wrong in the EU for the last decade?

Or in Japan for the last 30 years?

CB's and governments can print and stimulate, but there are limits, not too mention the huge risks around unleashing the inflation genie..

Capitalism depends on creative destruction.

Capitalism depends on the business cycle.

Our current attempts to abolish the business cycle, kick the can down the road into perpetuity, and to keep zombie banks and companies alive forever, is a poor plan.

I actually fear that we are witnessing the death of capitalism in the US and replacing it with a socialist, centrally planned economy.

One where the FED decides which companies survive, and which one's fail.
One where entire bond markets are effectively nationalised.


I wouldn't be so quick to believe that everything will be just fine, simply because CB's and governments have mandated it so.

There are still massive risks, and massive unintended consequences.

Finally, as a current bear, I am certainly not saying that the end is nigh, and that the XJO is going to 3000. (Equally however, ATH's are completely irrational also at this stage).



It's more that I lament that markets are no longer really markets.

I lament the poor decisions of our leaders: simply leading to the debasing money, ever worsening Gini coefficients, and poorer outcomes for the majority.

Interest rates need to be higher as an example. Our current zero bound rates are actually bad for the economy. Household savings rates actually go up as I rates go to 0..


I'm fairly sure few will read this, this late in the days thread....

My overarching, and final comment, is that there really is a disconnect between the real word, and current market valuations.

It's still a time for caution... Just like I said this morning, B4 today's little sell off