In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:
- Europe
- Led by Spain, it's quickly getting worse there again
- Limits of Monetary Policy
- Why the Fed and other central banks can't provide much more "help" even if we wanted them to
- The Stock Market
- Why prices are now in a "belief" bubble
With the US stock markets at near-record highs, Mish and Chris are getting extremely nervous about how far prices have diverged from fundamentals. By twisted logic, bad data has come to equal 'positive' news – with investors expecting more liquidity from central banks as the economic news becomes gloomier. At some point (likely very soon) reality will intervene, and when it does, it will be very painful for those investors long the market.
(No detailed summary this week, as Chris and I are on location for a project that promises to offer a substantial boost to this site's message. More when we return.)
Click the play button below to listen to this week's Off the Cuff with Mish & Chris (runtime 23m:35s):
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Chris: Welcome to Off the Cuff where Mish and Chris discuss the week’s events informally and without a script.Welcome Mish, we certainly have a lot to talk about today.We have some very exciting stuff going on in Europe of course because that is a continuing crisis without end, which is certainly continuing to develop.Maybe we start there. I am noticing here that the IBEX, which is the Spanish Stock Exchange somewhat like the Spanish version of the Dow, has closed at what appears to be a brand new low for the past five years. Lower even than the plunge low that it had early in 2009.Clearly, the stock market is signaling all is not well, but we knew that anyway didn’t we?
Mish: Oh, we sure did and they are still in denial in Spain and they are still in denial in Europe they are still in denial in Greece. I just did a post a few minutes ago, Steen Jakobsen at Saxo Bank in Copenhagen, Denmark; he emails me generally about every other day. He sent me a
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