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Gene Inger's Daily Briefing


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#1 Chris G

Chris G

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Posted 14 December 2013 - 10:52 PM

Gene Inger's Daily Briefing (highlights)
Monday, Dec. 16, 2013
by Gene Inger

Abandoning rational thought - continues to be the dominant consensus approach to early forecasts for 2014. Just as many institutions had overly optimistic calls for GDP and other economic measures for 2013; most had to lower those objectives as 2013 evolved. Nevertheless, they typically did not revise lower, but rather increased, their S&P upside objectives. We saw it as a typical manifestation of crowd psychology and supporting their 'book', or excessively equity-laden postures, that they couldn't easily hedge. (Few if any, explore the simple concern of what happens if interest rates normalize, as they are slowly but steadily doing; and the impact on US debt servicing. I share below the chart of overall trouble zones that increasingly are 'bubbly', with the biggest bubble perhaps that so many believe there is no bubbly.)

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