We’ll only know for sure in retrospect, of course. But it is hard to imagine the collapsing price of energy not having a major effect. I said, in 2011;
I’ve mentioned before that the last bubble to pop – of course, excepting the massively manipulated equity market – will be the commodity bubble. The popping of the commodity bubble will (somewhat) wipe the smug grins off the faces of the commodity countries – Australia, Brazil, Canada and Russia to name a few – and accelerate the demise of their internal bubbles, notably in housing.
I stick by this view, noting that at least the Canadian housing bubble is already showing signs of leakage. It will not be pretty, but hopefully at some point there will be a chance to pick up some Canadian bank and commodity stocks at reasonable prices.
In the meantime, the US equity bubble is still intact without even a “flesh wound.” The willingness to “buy-the-dip” and assume that the machines will squeeze every short every time is nearly universal. Treasury shorts, notably, are in a world of hurt. Too bad, I see no reason to believe that US bond yields will not converge with those of Japan and Germany over time.