We have spent a good deal of time writing about the downside of all the new regulations and government intrusions in life in general and the financial market in particular. No matter how it's wrapped or packaged, the usual excuse is labeled as well intentioned and necessary to clear up all the greed and corruption.
But as Scottish poet Bobby Burn noted more than 100 years ago about the best plans of mice and men, distortions, like you know what, happen. Yes, greed and corruption exist. As long as their are humans it mostly will. We of late have seen an article or two even about the risk of robot's going haywire, just another way to say distortion.
Government interference by both central banks and regulators (the latter are desperately fighting the “last crisis”, bolting the barn door long after the horse has escaped, thereby putting into place the preconditions for the next crisis) has created an ever more fragile situation in both the global economy and the financial markets. As the below charts and data show, price distortions and dislocations have been moving from one market segment to the next and they keep growing, which indicates to us that there is considerable danger that a really big dislocation will eventually happen. Read:
http://www.zerohedge.com/news/2015-12-09/ever-greater-distortions-hint-rising-crash-probabilities
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