Rosenber Daily - Ignore the curtain; focus on the man behind it.

It’s like 2008 and early 2009 never happened...if we are into some big reflationary trade here, why are U.S. Treasuries not getting absolutely smoked?

...it (oil) is about to test $80/bbl. Crude is already up more than 150% this year and if sustained would mean a 2.5 percentage points drain on GDP at an annual rate. Right there, half of the fiscal stimulus has been offset just by the surge in energy prices...

As if the surge in oil and gold prices aren't enough in terms of non-confirmation for this latest leg of the equity market rally, real interest rates are heading back down...just as the consensus economics community is raising GDP forecasts, it looks like the bond market is doing the opposite. In just the past two months, the equity market has roared ahead by nearly 10% even as the real rate has plunged 40bps, to 1.45% — levels we last saw in early April when “green shoots” were still a horticultural term and the S&P 500 was trading closer to 830 rather than 1,100. Fascinating divergence — we shall see which metric has the correct call on the economy.

---Rosenberg, 10.20