John Mauldin shows us the absurdity of this market.
• A painting (which may be fake) sold for $450 million.
• #Bitcoin (which may be worthless) soared nearly 700% from $952 to ~$8000 (Nb : since this was written 2 weeks ago, it's now more than double that...).
• #QE: The Bank of Japan and the European Central Bank bought $2 trillion of assets.
• Global #debt rose above $225 trillion to more than 324% of global GDP.
• US corporations sold a record $1.75 trillion in bonds.
• European #highyield bonds traded at a yield under 2%.
• #Argentina, a serial defaulter, sold 100-year bonds in an oversubscribed offer.
• Illinois, hopelessly insolvent, sold 3.75% bonds to bondholders fighting for allocations.
• Global stock market capitalization skyrocketed by $15 trillion to over $85 trillion and a record 113% of global GDP.
• The market cap of the #FANGs increased by more than $1 trillion.
• S&P 500 #volatility dropped to 50-year lows and Treasury volatility to 30-year lows.
• Money-losing @Tesla Inc. sold 5% bonds with no covenants as it burned $4+ billion in cash and produced very few cars.
This is a joyless bubble, however. It is accompanied by political divisiveness and social turmoil as the mainstream media hectors the populace with fake news. Immoral behavior that was tolerated for years is finally called to account while a few brave journalists fight against establishment forces to reveal deep corruption at the core of our government (yes, I am speaking of Uranium One and the Obama Justice Department). In 2018, a lot of chickens are going to come home to roost in Washington, D.C., on Wall Street, and in the media centers of New York City and Los Angeles. Icons will be blasted into dust as the tides of cheap money, cronyism, complicity, and stupidity recede. Beware entities with too much debt, too much secrecy, too much hype. Beware false idols. Every bubble destroys its idols, and so shall this one
5 Charts That Show We Are on the Brink of an Unthinkable Crisis
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