2015: Rinse & Repeat

Courtesy of Zerohedge comes this chart showing the disconnect between global equity prices (courtesy of various central bank printing presses) and estimates for growth both in 2014 and now extending out into next year.

This is precisely the kind of dislocation that simply cannot go on indefinitely.

Anybody now buying these all-time highs in various equity markets had better have an escape plan for when this suddenly matters - and that escape plan had better not simply be 'hit the bid'...

Disconnect

5 thoughts on “2015: Rinse & Repeat

  1. Beneath the ebullience of markets are signals that the world we have known since 1991 is about to change in 2015 in a way that will frighten markets and set the sunset on America’s dominance as like all empires before it collapse comes from political corruption, societal crisis, military over-extension and arrogance.

  2. Are China and Russia doing any better than the US in terms of political corruption, societal crisis, military over-extension and arrogance? Or Europe? And does anyone other than the readers of this and similar blogs care? That will be “not a dickie bird’s chance” three times over.
    The propaganda machine has been running flat out and we are almost at the stage where “1984” has become a reality if it hasn’t already…
    As for the markets – well if the algos and the Fed plunge team take their collective eyes off the ball watch out below!

    1. So true Clive… and yet there is still such a taint on thinking this way. The belief that the US (and the UK AND Europe) is/are somehow ‘different’ to the likes of Russia and China stems from a time and a place that no longer exists. Clinging to those outdated ideals is far more palatable than admitting the truth unfortunately.

      I think Simon is right – a change is coming

  3. Ultimately, you look at a chart like that and the only question is: Is it more expensive to be too early to recognize the imminent dramatic changes, or too late to do so? Hedging into a market that climbs on a lack of fundamentals is quite costly. But waiting for the fall…
    I guess that’s what we all are trying to determine.

    1. Precisely. David Hay quoted John Hussman to me in a recent interview and it was very prescient:

      Hussman: ” You have to decide whether to look like an idiot BEFORE the bubble bursts or AFTER”

      The latter is far more hazardous to your wealth than the former IMO – though the wait can be PAINFUL