From Joe Weisenthal:
Historical analysis of past big busts done by top economist Jan Hatzius and Sven Jari Stehn shows that while there is growing risk of a stock market drop because of the big rally we’re missing one of the key preconditions needed for a true bust: high credit growth.
They write: “[C]redit growth is the most important predictor of house price busts, especially when we focus on busts that involve a recession. House price busts have also tended to follow periods of high inflation, high equity volatility and large current account deficits, although all of these effects become less pronounced when we focus on recessionary busts….”
You must be kidding 🙂 We have embarked upon the greatest credit growth in human history..now we have the largest ever margin debt growth,talk about making figures meeting your horozin…I do not agree,simple minds are following simple money..when that happens the simple minds are destroyed,happens in every cycle !…yes you may have a rebound in a bear market,or you may have a new high in equities..the spring is sprung as tightly as it allows..the unwinding will be massive,as always.