100% Pure Adrenaline

Let's not call it monetary policy anymore.  Its a drugging.  100% Pure Adrenaline!  Bunds hit an all time record low in yields at -0.40%.  Behind the velvet curtain, after a lot of horse trading between Germany and France, the next ECB president is Christine Lagarde, so basically a retread from another corrupt institution. 

Germany figured the ECB is stuck at negative rates forever, so what was the point in putting their guy in there when he would be managing a monetary cemetery of opiate patients who died of overdoses. 

As the SPX hits all time highs, the 10 year yield hits the lowest levels since fall of 2016.  We have come full circle as the Fed has gone from an excruciatingly slow rate hike cycle to now being shoved in a corner by bond traders with a machine gun to their heads asking for 50 bps rate cuts ASAP. 

This is how the patient, in critical condition, is being given massive doses of morphine, combined with uppers to keep them alert and awake, trying to force life into a dying patient.  And it is working for now, as the SPX is at an all time high, even without a trade deal, just a can kick and delay of further tariffs.  All that matters is that the bond market goes up, and that is enough to make stocks happy. 

The last 2 years have told us one thing:  monetary policy is the biggest game in town.  The trade war is Division 3 college basketball.  Monetary policy is the NBA Finals.  Yes, it is much more exciting to talk about the trade war and look at what this politician says, and what that politician says.   In the end, they are all nonfactors compared to printing presses at the ECB, Fed, and all the other central banks in the world.  This is a money game.  The central bankers have full control now, and they aren't going to give up their power easily.  Only an eventual realization of the mess and a total riot from the masses can change the course of monetary history.  Which means it won't be changed.  The masses are idiots.  They got what they deserved.  NIRP forever in Europe, NIRP lite/ETF buyer forever in Japan, and a Fed that will soon follow course. 

This is the reality of the current market.  If bonds don't go down, then stocks can't either.  Bonds are a huge part of investors' portfolios.  If it acts like a super hedge like this year, there is no impetus to sell stocks.  Just hold stocks, and hold bonds.  That is what is happening among fund managers.  These are the toughest markets to crack for the bears.  Until I see some bond weakness, I dare not enter short stocks.  Because investors are in a very strong position.  Everything is working for them.  Even long term worthless bitcoin has been going much higher this year. 

These are nosebleed SPX levels, and the economy is weakening, but bond strength covers for all those flaws.  Easily.