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Friday, April 19, 2013

The Collapse Of Index Price Representing Fundamental Activity

The world's hubris continues to march on.  Mathematics continue to skew the true representation of the metrics being measured (ie U/E down as Participation Rate drops) and this is captured beautifully in the chart below.  Articles being pumped out by sites seeking revenue through click-bait are driving this internet reading, algo-driven, and fragmented market (we are now in the 2nd Degree of Fragmentation).  Getting a read on real price is a pain in the ass and just like in 2007/2008 once someone figures out the real value (which is closer to a S&P Index value of 1450) prices will collapse faster than the MBS value Lehman had on their B/S.  

Good luck human.

(h/t @Not_Jim_Cramer)