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Playing the Ponzi
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Why “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight through a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step... More
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Playing the Ponzi
  • Is The Market Blind? Or Has Copper Lost Its Doctorate? 0 comments
    Apr 23, 2013 12:26 PM | about stocks: SPY, JJC

    There are some pretty fascinating divergences happening at the moment. The current weakness of copper compared to strength in most risk assets is particularly striking, to me. For the first time in over five years, Dr. Copper and other risk assets (stocks, high yield bonds) are moving aggressively in opposite directions. A case can be made that copper has lost its predictive value because cap-ex spending is not central to the current global growth story. Perhaps that is so. Or perhaps "risk assets" have simply lost their ability (or desire) to discount future risk? Either way, the current divergence is strikingly inconsistent with the historical correlation between stocks (NYSEARCA:SPY) and copper (NYSEARCA:JJC):

    (click to enlarge)

    Stocks: SPY, JJC
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