Sunday, September 16, 2012

16 Sept 2012

 Now the question becomes how long will it stay elevated at these levels.  Plus, as you can see, it can have divergences with the Dow itself like in much of 2010.  This shows behind the scenes weakness.
Short term is looking a little weaker.

VIX is pegged to lows.

I don't know what else there is to look forward to - both Fed and ECB pledging to print as much as possible.  Now, we just have a bunch of stuff that can go wrong.  Gas prices rising, food prices rising, riots, unrest, fiscal cliff, cost push inflation eroding margins.  Remember, all printing does is cut the real assets into smaller pieces, it doesn't increase the amount of pieces.  Can't print oil, can't print lumber, can't print concrete.  I really don't know how the ECB is going to get Spanish bond yields under control.  Rates are supposed to rise to increase demand.  They will end up having to buy everything...with German money.

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