Wednesday, July 22, 2009
When the early hope of a long, hot summer in the UK gives way to the annual monsoon of April-temperature rains, it's not uncommon to pick up a bug. So it's proven for Macro Man, who's completely wiped out at the moment.
It looks like he's got company; the fabled sky dog failed to turn the dragon into a cyclops today, or in any other fashion impede the progress of the Shanghai Comp, which roared to new highs for the year.
Sigh. Perhaps we'll have to rely on the more prosaic "monetary tightening and explosion of NPLs" rationale for an end to the China bubble, mk. II, after all.
While Macro Man's under the weather, he looks forward to reading a recent report from Nomura on real asset-market returns. Among the conclusions is that all global equity returns in excess of cash over the past forty years can be explained by a very small window in the middle (1985-1987.)
Provocative stuff, and hardly supportive of the "of course equities are cheap on a long-term basis" view that seems to be common amongst long-only equity investors. One wonders what sort of bug lies in store for them....