Charts have consistently given the best clues to the unfolding catastrophe in global financial markets.
Time and again they have warned that the unthinkable was about to happen and that fundamentals, including apparent double figure yields on blue chip stocks, were signs of danger, not that stocks were cheap.
The latest chart to flash warning signs is the yield on the FTSE All Share v the yield on 10-year gilts. I have never known a time when shares yielded more than gilts by these measures, until now. The chart shows a breakout suggesting that the ratio of share yields to gilt yields could climb even further. It looks increasingly as though investors are moving to discount the threat of a deflationary slump.
Bull is on the way
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