A hallucination is a fact, not an error; what is erroneous is a judgment based upon it.
The financial media has provided reams of data trying to lay out the case that this economic recovery is real. Many of the statistics provided do indeed support the theme that the outlook is improving. One must, however, keep these two facts in mind when looking at the data:
The Fed poured huge amounts of money into this market. Minus the money, this so-called economic recovery would have never come to pass
Due to the low-interest rate environment, corporation borrowed money on the cheap and poured billions into share buybacks since the crash of 2009.
Hence, while some of these statistics paint a rosy picture, the outlook is far from rosy as two key leading economic indicators have failed to confirm this recovery from the onset.
The Baltic Dry index is trading 92% below its all-time high. Now imagine the Dow was in the same position and the press instead of calling it a crash, made the assertion that we were in the midst of a raging bull market. You would think they were insane. Well, the same analogy applies today; this index clearly indicates that there is no recovery on a global basis and that hot money is creating the illusion of one. Remove this excess cash from the system, and the economy together with the stock market will collapse.
This once highly effective leading economic indicator appears to no longer work as the playing field has been altered. However, it is working, as it is indicating this recovery is nothing but a sham. It can longer be used as a tool to gauge the direction of the stock market or the strength of the economy because as stated hot money has altered the landscape.
Copper another leading economic indicator also clearly illustrates that this recovery is a sham.