It really does feel the Atlantic Ocean got much, much wider. As Europe struggles with riots and populism, financiers in the USA dismiss Yoorp as irrelevant, and think their economy is doing just great, fuelled by the AI boom and rising earnings. What they miss is the vulnerability of the economy to a debt shock and rising Treasury refinancing risk.

In the past 15 years the US economy has left Europe in the rear-view mirror. While America booms, Europe appears to be flatlining. The question is why? Americans say it’s entirely Europe’s fault: bad policies, failing politics, and lack of unity. However, the consequences of the (as yet unresolved) European Sovereign debt crisis triggered by the Global Financial Crisis of 2008 was the speedbump.

Stocks are taking a breather this week after a succession of successive record highs. With the Fed now deep in QT, how can the market be rising when liquidity is supposed to be tighter, and underlying conditions tougher? Somethings just never make sense…