There is only one trade right now, and that is “Risk On.”

[Joanne98]

I noticed that I have had trouble composing my newsletter lately because in thumbnail form, all charts now look the same, a lot like a 1952 Mercedes 300SL with its “gull wing” doors open.

Looking at the long list of positions that I have recommended this year, including dollar/yen and dollar/euro, municipal, junk, and corporate bonds, emerging market ETF’s, Toyota, the US, Australian, and Canadian dollars against the euro and the yen, silver, platinum, palladium, oil, and commodities, I am stunned to see all of them working, some quite dramatically so. I can assure you this is not because I suddenly acquired the touch of Midas or the wisdom of Croesus.

All assets are going up, period. Fundamental research has become an irrelevance. Earnings and GDP forecasts are being ratcheted up by the day. The S&P 500 has gone up for 400 days now without a 10% pullback and we have seen the fourth strongest stock market rally in a century. There is vastly more risk in the market than there was 13 months ago.

Of course, I blame zero interest rates for everything, and the Fed’s need to inflate new bubbles to rescue us from the old ones. It also helps that Obama turned out to be a moderate in liberal clothing. How else can one explain an 82% gain in the S&P 500 in 13 months? Despite the largest borrowing binge in human history, long term interest rates are levitating just above all time lows.

If everything is moving up in unison, you can expect them to go down the same way when the premise for their prosperity disappears. You have already been tipped off twice on how this movie is going to end, once on the day when the sushi hit the fan on Goldman Sachs (GS), and again when Greek debt was downgraded. Those were days when everything moved down in lockstep, and hedges proved worthless.

http://www.zerohedge.com/article/there-only-one-trade-right-now-and-%E2%80%9Crisk-%E2%80%9D

[paulsby]

1. those subscribing to this should start loading shorts

it's one thing to predict

it's another to back prediction with money

[pokercat999]

2. The markets can rise in the face of this obvious insanity

longer than anyone can short the market. It's like betting for a seven on dice (the most frequent number) it can go a long time before you roll a seven.

I've read that the banks have to be the driving force in the markets, they are speculating in stocks.