I have to wonder why there is so much concern and debate over possible additional - continued - support for the recovery. The March adjustment to rate structures was significant only in relation to its lack of consequence. To the extent real yields became less negative, the Fed has increased public yakking and talked down the growth. That is how a "transparent" central bank massages a message. That's how a Chairman helps "enforce" negative rates.
Yesterday, we discussed the risk of rolling speculative frenzy in commodity classes. The drive by macro analysts will call this inflation. It ain't. Kevin Depew- Emmy winning writer and editor of BBG's Money- noted prices were "falling for things we want and rising for things we need." Very good. In addition, I use a popular advertisement as an example of the Boomer mindset: The daughter comes into the room and asks her dad for 80 dollars "for jeans". "80 bucks, for jeans?", replies the father. "Ya, everyone is wearing them," says the girl. The dad then logs onto his brokerage account, buys the stock of the jeans company and gives the daughter the money. Implicitly getting the jeans for free as the stock appreciates.
The proliferation of ETFs designed to exploit this herd mindset did not exist in prior cycles. The Street is very good at creating the drug to fuel the next rave. As the VVIX showed last week, certain products are already "breaking bad." Its going to get away from them. And so it goes....tootsie! go!