Flying Blind, Part 1: How Bubble Finance Destroys Economic Efficiency And Rationality

    Read Scott Horton's new book Fool's Errand: Time to End the War in Afghanistan

    You could say thank heavens they have finally stopped buying the “dip”. Then again, there apparently aren’t any left!
    That’s the case, anyway, even if your notion of a “dip” is any day the market doesn’t go up. So far there has been exactly one such occasion during 2018. Or worse still, if you assume the traditional metric of at least a 5% drop, you have already been out of the dip buying business for a lifetime—- whether measured in market lives or even dog years.
    That’s right. Heisenberg reminds us this morning that we are in undisputable record territory. It has been fully 395 trading days since the market had a 5% drop, and that’s never happened before in all of recorded history.
    DaysWithout
    Than again, the central banks of the world had never even dreamed of snatching $22 trillion of fiat credit from thin air prior to 1995, either. But in the nine years since the financial crisis they generated $14 trillion of new footings, and more than $20 trillion during the last three bubble cycles combined.
    Needless to say, this $20 trillion emission of something for nothing has deformed and poisoned the entire warp and woof of the global financial system. Everywhere financial asset prices have been massively inflated and falsified, causing a two-phase distortion of the global economy.
    Read the rest at David Stockman’s Contra Corner.

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    Read Scott Horton's new book Fool's Errand: Time to End the War in Afghanistan

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