The following is from seekingalpha.com: Hysterics
Rhetoric is at a fever pitch since the stock market rally. The outlandish is designed to be useful. But, do we know when the outlandish is useful? Is the outlandish useful when the hysteria is over?
When markets finally return to some semblance of normality, we will quickly discover that everyone is suddenly trafficking in “hysterics” and there is a recipe for kinds of “hysterics”.
We’ve got panic both ways.
- People are panicking because they are bullish and can’t sit still. There is also panicking because the prevailing regime might come to an end.
- The equity rally has reached something that approximates escape velocity in the new year.
So if 2,850 by the end of 2018 is “rational exuberance”, what will Goldman call 2,850 by the end of January, 2018? When the Dow hit 26,000 on Tuesday, it was just 12 calendar days after 25,000, the shortest time between 1,000 – point “milestones” ever.
Treasuries have continued to sell off, with 10 – year yields climbing above 2.60.
What feeling do you get trying to figure out what to do when risk assets are in the middle of a furious run higher?