This ‘Market’ Discounts Nothing Except Monetary Cocaine
by David Stockman via Contra Corner blog,
ZeroHedge.com
Jul 19, 2016
Another one of the Hedge Fund high rollers, Marc Lasry of Avenue Capital, recently confessed on bubblevision that 2200 on the S&P 500 doesn’t make sense to him, either.
But his reasoning went right to the crux of the bubble implosion lurking just ahead. According to Lasry, the market may be discounting a “stronger-than-expected” economic rebound and thus only appears to be ahead of itself:
The U.S. stock market, making a string of recent record highs, “doesn’t make much sense,” distressed debt specialist Marc Lasry told CNBC Monday, sharing the view of fellow billionaire investment titan Larry Fink.
“Everyone is a bit surprised,” said Lasry, co-founder of Avenue Capital, which has $11.3 billion of assets under management. “But the market is telling us what’s going to happen next year [or] the next two years.”
While questioning the advance in stocks, Lasry said on “Squawk Box” the market may be signaling a stronger-than-expected U.S. economy, with a growth rate somewhere in the 2 to 3 percent range….”
Ah, the hoary myth of a market that processes information, discovers price and discounts the future. Apparently, no one told Lasry what the bereavers for free markets and honest money had long ago confessed. To wit, “Mr. Market, we hardly knew ya”.
So the singular change in relevant information from the post-Brexit low has nothing to do with the outlook for economic growth or corporate profits; it’s just another excited rave in the casino after the latest batch of monetary cocaine—-helicopter money—-was passed all around.
But these revelers are going to need something stronger than the hope for “helicopter money” to avoid annihilation when the long-running central bank con job finally collapses. Indeed, that denouement lies directly ahead because helicopter money is a bridge too far.
As we demonstrated last week, there is really nothing to it except more of the same aggressive monetization of the public debt that has been going on for nearly two decades. That is, whether the central banks buy public debt from the inventories of the 23 prime dealers and other market speculators or directly from the US treasury makes no technical difference whatsoever.
The end state of “something for nothing” finance is the same in both cases. In fact, “helicopter money” is just a desperate scam emanating from the world’s tiny fraternity of central bankers who have walked the financial system to the brink, and are now trying to con the casino into believing they have one more magic rabbit to pull out of the hat.
They don’t. That’s because it takes two branches of the state to tango in the game of helicopter money. The unelected monetary central planners can run the digital printing presses at whim, and continuously “surprise” and gratify the casino gamblers with another unexpected batch of the monetary drugs.
The Rest…HERE
