Just Two Charts

Both short-term and long-term, the large liquid US stock market indices have become massively decoupled from the bond and credit markets. Since the former is supposed to discount a combination of the latter (macro growth/de-growth from bonds and micro business-risk/cash-flow-sustainability from credit), one has to wonder which reality will come to pass…

 

Short-term…

 

Long-term…

 

Do either of these charts look ‘normal’? Sustainable?

*  *  *

Simply put – for American companies, despite the fall in Treasury yields, the cost of borrowing (i.e. interest rates) has already started to increase rather dramatically and that’s not just energy names.

Charts: Bloomberg

*  *  *

Don’t worry though, it’s different this time…




via Zero Hedge http://ift.tt/1uc7FI2 Tyler Durden

Leave a Reply

Your email address will not be published. Required fields are marked *