Global Equities; The decline of rationality ...

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... and the rise of financial engineering - manifesting in a generational shift toward pure leverage.
"When they look back at this segment of history they will probably ask: What the hell were they thinking?!"

Reporter: "How is it possible that the DJIA loses 90% of it's value? ...
B.G.: "It is very simple, really. First, it loses 50% of it's value and then, 80% of the remainder." - Benjamin Graham, from a 1934 interview.

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Here is a closely related indicator ...

... pointing in the same direction.

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As it currently stands ...

... this is pointing to a "not so soft landing" - i.e., Recession.

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Note;
One thing must be noted here that is most often misunderstood.
Rates are high(er) when they are underpinned by a stronger economy, due to the increased demand for capital! (... and not because of inflation, despite the popular myth, including the Fed's., which is due to people's confidence - or lack thereof - in fiat money.)
The present picture here is mixed, at best, because the US economy is certain to way outperform the rest of the World, for years to come. Very little doubt about that. However, simultaneously, there continues to be an absurd amount of mismanagement especially on the federal level. Consequently, like during previous instances, a Stagflationary period has a real likelihood now, mostly brought on by the nonsensical mismanagement of the world's largest economy - and not by some elusive, Hand-of-God like forces.
In short, an awful lot of demonetization will have to take place (4-digit Dow, S&P down 50%, etc.) before any real value could be reflected in US equities and the likes.

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p.s.
I only include the link here to an earlier post for more trading relevance and related specifics;

Predicting the Time-window for Turns, in all Markets

In essence, it is useful to remember (and for the non-believers ;-);
On average, it takes 6 years for an asset with a 20% annual volatility to decline by 50%.

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An other telling spread to look at is this one;

... which is clearly in a down-trend.
Normally, this one should be in an up-trend if one was to anticipate future S&P strength but (way!) over-leverage being where it is, this is also indicative of the massive de-levering that must take place before any fundamental value is represented by any of the equity indexes. (I.e. a -50% indexes decline, at some point before the next cycle, is a foregone conclusion!)

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This wants to cut loose, something fierce!