The U.S. savings rate hit a 15-year high, just under 7%, today. Despite all the financial shenanigans, we see a slight trend of people going back to cash. As always, this sort of thing is concerning to the contrarian investor. But the last time people moved into cash, back in September, the dollar had a nice run that lasted until March and the onset of quantitative easing.
It's been a tepid rebound we've had since March. If it were in line with past dead cat bounces, eyeballing the DJIA over the decades, such a faux-recovery spike could have easily reached 10,000 and maybe even 12,000 before the true decline to fundamentals began. So it's hard to draw conclusions about the last three months. Either we are waiting for the real rebound, or this was it and its weakness underscores the strong deflationary pressures at work.