Submitted by QTR's Fringe Finance
At some point late last week, I came across yet another seemingly alarming-looking chart that caught my eye with regard to how the market continues to rage higher.
Chart via Zero Hedge
This chart shows a pretty simple correlation between 2024 rate cut expectations and the stock market. The correlation, which has held going back almost a year, has not broken, with the market raging higher despite rate cut expectations moving “lower”.
In other words, the chart is yet another way of showing that our market is decoupled from reality. It’s yet another sign that we in no way have a free market with actual price discovery, but rather a market that is a wholly owned subsidiary of whatever words Fed governors choose to use in their speaking gigs that particular day. I mean, when it boils down to it, you can throw a dart and find a chart that makes the point that the market is overvalued.
Ignorance Remains Bliss
Putting aside how generally disturbing euphoric, animal spirit “market forces” are – I’ve got three years of ranting on that subject alone here on this blog – I looked at the divergence in the above chart and wondered if it wasn’t finally time for the market to snap (I’ll pause for your laughter, mixed with pity).
Then, sadly, I shrugged it off and forgot about it. I’ve lived through 15 nonstop years of no news being good news, bad news being good news and good news being good news. I’ve heard lies about the subprime markets, transitory inflation, banks never being bailed out again and commercial real estate, to name a few. I’ve watched distortion play out in markets that has driven some extremely intelligent fund managers all but insane. One day around 2015-16ish (can’t really remember), I sat in the New York office of an extremely well known hedge fund manager who was all but in tears across from me. “Nothing works, I can’t figure out to how to make money,” this person worth about 10,000x more than I’ll ever be worth said to me.
Needless to say, I understand that market “indicators” are spinning wildly out of control, leaving them with the functionality of that compass from Captain Ron.
To put it in even simpler terms, I’ve given up on the market ever moving lower for any reason that I can see in advance again (only half joking).
And can you blame me? We had hotter than expected CPI numbers last week and hotter than expected PPI numbers this past week, and the market celebrated by remaining at all-time highs on the tail end of a totally and completely 100% normal and not at all distorted or suspicious move straight up over the last 20 weeks.
Truth be told, it doesn’t look like any piss-ass piece of macroeconomic news, meaningless regional bank failure, or sliver of reality setting in is going to have the gusto and firepower necessary to...(READ THIS FULL ARTICLE HERE).
