Sunday, April 9, 2017

Self-Imploding Bullshit

"Reflation" just ended reflation...

After an eight year cheap debt binge, borrowers are responding rationally to "reflation" by reducing debt. Ironically, in doing so, they are deflating the recovery...

Remember the last bubble when the Fed lowered rates to 1% to encourage borrowing, then raised rates 17 times in a row to obliterate everyone who took on too much debt? Of course they didn't see it coming that time either.

Ahh, good times...

Well, that's what is happening now. Except they waited eight years to wrap the noose really tight this time...

Here we see long term rates (black) with short-term rates (red). 

Reflationary hoax followed by FedPlosion. Deja Vu:

Higher interest rates? Less debt please...

C&I Loans outstanding (blue) with Fed rate (annualized change):


Loans AND leases % change annualized:

And yet, we observe the enduring power of suggestion in a de facto Idiocracy:

On a separate and yet totally related note, the Japanese Nikkei has warned of impending market crash, every single time. And so has the uptrending VIX for that matter. But we've only seen this movie four or five times, so how would we know?

What I find interesting is that the last time the NYSE rolled over, the rest of the world rolled over as well in 2014:

NYSE above 200 dma (red) with World ex-US.:

With S&P:

With Oil: