by Mish

Here are some of the charts I found interesting. Comments are mine. The order changed from

I picked up the Hartford link from Jonathan Tepper who made this Tweet: “Now that we have extraordinarily low yields across the world, we have the highest duration risk ever. Nice.”

Valuations Expensive

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The US has among the most expensive valuations in the developed world. Blue highlights mine.

US Valuations vs Japan

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Highlight mine. Japan is attractive. The primary issue is whether to be yen hedged or not. A balanced approach is to be partially hedged to yen exposure. I have a position in Japanese equities.

Japan is Unloved

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It does not pay, on average, to chase rich valuations. Those who have, feel good, for now.

Tighter Conditions in China

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A financial accident of some sort has been on deck in China for a long time. It will spill over into world growth when it hits.

ECB Tapering All Talk But No Action


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ECB QE has thrown a lifeline to European Zombie corporations. The QE is also keeping the Italian bond market from blowing up. Links below.

Drug Revolution

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THis is the best news in the bunch.


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Some claim that debt-to-GDP is not a problem citing 1938-1942 as proof. Excuse me but they fail to mention demographics, a baby boom, and rapidly increasing productivity. Now we debt, very poor growth prospects, asset bubbles, and an aging population to take care of.

Interest Rates May Stay Low

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The best reason to expect rates to stay low is the preceding chart. Inflation? Please consider Steen Jakobsen on the Next 30 Years: “Everything is Deflationary” Thirty years is arguably too long a timeframe. The next ten years isn’t.

What Happens if The Fed Hikes?

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In the unlikely event the Fed hikes another 1%, look at the left side of the chart for what is likely to happen. Look at the right side of the chart if you think the Fed will cut.

Global Risks

Global risks are high and rising. Ignoring asset bubbles, the worst spots for risk are the EU banking system and the unsustainable growth balancing act in China

Mike “Mish” Shedlock

Draghi Increases Risk of Global Trade Collapse With Brexit Tough Talk

The ECB has enough on its hands already: Collapsing Italian banks, a Deutsche Bank derivatives mess, massive Target2 imbalances, and the rise of eurosceptics like Beppe Grillo in Italy and Marine le Pen in France.

Event Risk and Trump’s Weak Dollar Policy

Saxo Bank CIO and chief economist Steen Jakobsen sees event risks on the near horizon in terms of Trump policies and the US dollar.

All Aboard the "No Recession" Train

Hiring bounced back in November. More are hopping on the "No Recession" Train. I'm not one of them.

Trump Promises Steel Action: Expect Job Losses

The steel industry and steel stocks both cheer today’s news that Trump will take action against Chinese steel dumping.

Sucker Traps and the Arithmetic of Risk

John Hussman has another excellent article out this week, but it will be ignored. Mathematically, it must be ignored.

No Toilet Paper Unless Critical: Musk, CFO to Approve "Literally" Every Expense

Tesla so badly needs cash that Musk will personally review and sign every tenth payment. The CFO will look at them all.

Trump Threatens China With a Big Fine: So What? All Mouth, No Action?

Trump is bashing China once again. This time, Trump proposes a big "fine" over an alleged theft of intellectual property

Rigged System: Fake Risk, Fake Return

Is the system rigged? If so, is this the end of volatility? Axel Merk explores those questions in this guest post.

How Long Will It Take for the ECB to Own All Sovereign Debt of Spain, Germany, France?

Huky Guru on Guru’s Blog posted a chart that answers the question: How Long Will it Take For the ECB to Own All Sovereign Debt of Eurozone Countries?