Wednesday, March 17, 2010

Carry trade vs carry me off the floor trade

Liquidity on (carry trade), liquidity off (carry me off the floor trade).

The ratio between large cap stocks total return index and long-term US government bonds total return index is another good measure of risk vs. risk-aversion money flows.

What should be a bit concerning to equity bulls is the similarities between the second great depression and today. Looks very similar in terms of cycles to 1938-1939.

U.S. Large Cap Stocks Total Return Index (LCSTRI) to Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) Ratio:

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