Sheesh. An awful lot of data came out this week and a concensus on things is even more muddled. The obvious winners include global stock markets. The mo mo players in the nasdaq are back even though all data points to softening domestic housing markets and growth. The yield curve is no longer a curve. Its a line. Hopefully someday we will figure out why there poeople scooping up 30 years bonds below the rate of six month t bills. The carry trade in yen swiss francs seems to be getting more problematic. When they blow up people will be forced to delever.
Has anyone noticed that the global financial system is a bigger bubble than in 2000? Everything that happened 5 years ago in the US is now taking place on a gloabl scale. Private equity is now doing deals at 9.5 times cash flow versus 3.5 a few years ago. Leverage buyouts, leveraged consumers. What happens when everyone has to delever? Central Banks should be concerned because at some point they are going to watch the biggest credit debacle in the history of the world. When risky assets get repriced as risky assets things will go wild.
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