Yes, it’s striking me as weird, and a bit worrisome, that everyone who has a clue is absolutely certain that a huge drop is on the way very soon. And yet it just keeps not happening. Mortgage derivative hedge funds go belly-up, CP markets freeze up, one money market fund failed to honor redemptions, a British retail bank has customers lined up at dawn to make panic withdrawals despite British Central Bank assurances that this isn’t necessary, and yet the stock market keeps toddling along as usual. This has gone on long enough that I’m starting to get seriously perplexed. I bailed out a while back, with the S&P just a hair over 1500, and I’m just sitting back waiting for the show to start. But it’s taking an inexplicably long time to start.
I think the machinations of the central banks to forestall the “show starting” is why folks like us are perplexed. There’s lots of backroom wheelin’-dealin’ going on that isn’t being reported.
yes, market action implies great confidence that central banks will be able/HAVE been able to keep this from becoming a more general problem. I have no doubt this is something the ECB, the Fed, and others are absolutely trying to do.
Look at 1929 to 1955.. was roaring along well in 1929, then the bottom fell out.
The only issue here is whether this will be a slow enough deflation of this enormous bubble that the worldwide economy will be able to mostly handle absorbing it... IE long drawn out minor recession or flatlining.. or if it will be a rapid deflation. If its the later, it will be a global depression.
