Smoking The Green Shoots?

Based on four measures of risk - the CBOE volatility index (^VIX), the price of gold relative to silver, the 3-month Eurodollar rate less the 3-month Treasury bill rate (TED spread), and Bloomberg’s U.S. Financial Conditions Index, which “combines yield spreads and indices from the money markets, equity markets, and bond markets into a normalized index” - things are apparently back to where the were before Lehman Brothers went belly up back in September.

Yet even a cursory look around reveals that a great many markets are broken or are mere shadows of their former selves, the real economy remains on very shaky ground, and no small number of firms and parts of the financial system are parasitically dependent on Washington’s largesse.

Maybe traders have been smoking too many of those “green shoots” the optimists keep talking about?

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