Fly said he’s “Frozen Stupid”. Cronkite reminds us, the mechanisms of Capital Formation are basically halted.
If it weren’t for the Central Banks of the world, the markets would be completely seized at this moment. But there cannot be another 2008 and so monies will be created out of thin air whenever necessary, like now. This is not bullshit. This is a very large risk should trading get “loose”.
A few weeks ago, most of retail, ex-WMT, warned of a slowing consumer. Now, the all important semiconductor area is warning. This is not bullshit. This is a key risk apparent in the global economy.
There is a major drought in the breadbasket of the country. Crops are drying up and prices are spiking. Is this the “Dustbowl” eighty years later? This is not bullshit. True supply/demand based food inflation is a real danger.
The “economy”, the banking system and the markets feel as if they have been placed in an ”Induced Coma”, the kind they put patients in when their body is far gone, but they’ll likely live.
At any other time, markets might reflect the true uncertainty that is obvious, as a wall of worry can only be climbed so high and for so many years. Perhaps it is just the Summer Doldrums and everything will pick up later. But “later” are the months of September & October.
No new monster QE-related rally. No “reality-based” crash. We continue to spin on the wheel, like a hamster chasing his dinner. Enjoy!