GLOBALIZATION & LIQUIDITY
[Latest Global Dollar Liquidity Measure: +13.4% annual growth rate; latest Endogenous Liquidity Index: -17.0%]

There is little doubt that BRICs are, right now, an oasis of prosperity. As Macro Man recently wrote: "That the SPX is up this week despite a pretty unambiguously poor set of macro data is a testament to the importance of liquidity and globalization in driving asset prices". But how can we gauge the impact of globalization and liquidity? First, look at the stock of Treasury and agency securities held by foreign central banks. It's growing at 18.6% rate. Hot! Then, pay attention to financial volatility measures (VIX, VXN, V-DAX, etc.) Declining financial volatility would be a pretty good indication that global decoupling is indeed taking place.