Given that each market is essentially a barometer of the economic well-being of corporate America, the massive gap in performance that has opened up between the stock market and the credit market suggests that one or the other is out of synch.
While there are not enough data points to make a definitive statement about which is right and which is wrong, I would note that the last time we had the kind of disparity we have now was in late-2007.
While I can’t say when it will happen, the market rally being created by the artificial stimulus packages by the Federal Reserve will end and it will end badly. A picture is worth a thousand words and this chart from Financial Armageddon speaks volumes…don’t take it likely.
Of course, things may be different this time…right?
Do Good and Make Money!