As you know, I’m a bit of a critic of the way in which the financial markets have been turned into a fraudulent farce of a scam.
They now signal almost nothing, except the degree to which Team Elite is openly looting the entire globe.
US equity markets in particular now serve just two narrow purposes:
- funneling Fed money into the pockets of the 0.1% and
- signaling to the little people that “all is well” so that they will continue to borrow and spend well beyond their means.
They are both a looting and a propaganda operation rolled into one.
What they are not doing any longer, as is typical of late-stage bubbles, is telegraphing useful information to investors. The noise is now vastly higher than the signal.
Once upon a time, a market was a place where buyers and sellers would use all available public information to determine fair value and decide where scarce capital would best be put to use.
The signal-to-noise ratio was very high. We might visualize them like this; nice clean signals:
Crappy companies that were losing money would see their share prices go lower while their borrowing costs would climb to compensate for the risk.
Ditto for sovereign nations. In prior eras there would be some sort of relationship between the interest rate a country would have to pay and its prior track record.
by lambertad 
