Bubble Talk Again ...

There was a talk of government bond bubble some months ago... However, my eyes are catching ever more "bubble talk" in the latest days.

I have no clue, of course, but let's start with a "oil bear quote" by Mike Fitzpatrick from MF Global today:

Any discussion about whether oil would breach $70 is now moot, as prices moved as high as 71.65 in overnight trading. Clearly, investors have acknowledged commodities as a preferred store of value, with the dollar's continued deterioration.
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This year, for those who have been fighting hard to remain in their homes, for those without jobs, for those who have seen their retirement accounts disappear, there is no wealth effect. As the value of oil as an inflation hedge outstrips its value as a commodity, an objective valuation becomes more and more difficult. If the only price discovery mechanism is financial, rather than utilitarian, the resultant opaqueness makes the size of the bubble that is obviously forming very difficult to determine, and makes planning for the inevitable bust as difficult.

Wow! You get it? Click on chart to enlarge, or look at up-to-date chart here.

That's not all. Suki Mann, the credit strategist at Societe Generale, wrote in his daily market wrap up yesterday:

Greed and fear – we have it in droves and it is engulfing the credit market. It has come quickly, in two stages. We are seeing greed from issuers/syndicates in new issue pricing as they prey on an institutional investor base fearful of not getting the allocation/bonds they desperately need to fulfil their own investors’ requirements. It seems that the new issue premium will disappear soon - if it hasn’t already - for the more frequent, quality borrower. We might see issues price through secondary levels on a more consistent basis. Investors’ own need for paper is greater than their price sensitivity given that secondary prices haven’t worked for anything approaching size. There is no bubble yet – as we have written previously – but we’re starting to see the trends of one.

Then, a story "Speculative Bubble in the Making and More" by Brett Steenbarger this morning, where he quotes Market Tells:

"Speculative-fueled rallies invariably end badly...but the kind of NASDAQ/NYSE Volume Ratio that was registered Tuesday suggests we could be in the early stages of a speculative frenzy. If true, we should see two things… the Nasdaq/NYSE Volume Ratio should remain generally above 1.50 on a daily basis, and the NDX/SPX ratio should continue to trend higher as high-beta stocks continue to outperform blue chips. The latter was a particularly good indication when it began making lower lows for the first time in months at the end of March 2000, signaling a pop in the speculative bubble."

My take is that, if there's any such bubble, we might be able to track it quite well with the relative performance of emerging market stocks. Note also the upward trend in commodity prices, particularly oil.

Well, the equity market looks also technically heavy here.

Was he drunk? A Goldman Sucks executive who says: ""Chances are" this is NOT The Recovery"? (my emphasis).

Blow it!