Double Double, Toil and Trouble

So chanted Shakespeare’s witches in Macbeth over their cauldron. Witchcraft seems appropriate to today’s financial markets which defy economic reality.

For bank margin loans, read credit fuelling equity markets. The chart above shows where the expansion of bank credit is going. Furthermore, this is just the retail stuff deployed through brokers, because hedge funds and other institutional traders including those running banks’ trading books go direct to the banks.

Interestingly, and this is usual with equity bubbles, other equity markets are now