According to the NY Fed, the S&P P/E hit 140 on October 7 and the market is up further since then.
http://www.newyorkfed.org/research/directors_charts/ipage20.pdf
Need I say more.
Disclosures: This is insane.
Friday, October 16, 2009
Sunday, October 11, 2009
The Sky May Not Be Falling But The Ice Is Melting!
Here is a must read article about our current mess. Whether you understand the complete ramifications of the article is not the important point for my purposes. You will understand the incredible charts, which are self-explanatory. If you look at these charts and still say we are out of the woods, you are in need of therapy. And if you understand the article, you know the charts are not even half the bad news.
http://jessescrossroadscafe.blogspot.com/2009/10/speculative-bubble-in-equities-and-case.html
My favorite chart is this one:
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0tSSvJdVtfy1fsn-x1TMB2fb0SNC-VyAoLffeEOmcHlfBMWMlQw3XRTYYS5bMXmiFpNXrKpPuTSn1DlubBHbSSab6zbNV1R4AtVjru1o1iI4ZWJ8AbHKRuJguCiB00-vdqv20FXF8laM/s1600-h/peratio.jpg
Look at that link and tell me you are dying to buy into this bull market.
It's the Demographics!
There has been significant focus on a whole host of economic woes facing us in this recession. Not to depress you, but if we escape our current economic mess, predictions are that the demographics in the U.S. still doom us to an ultimate depression. In other words, our economy was already doomed, without the recent recession, as we have an aging population to support and no obvious means to do so. So what happens if the current crisis is still looming or our newly created bubble bursts when the demographic issues really start to set in? I am moving to Brazil and taking my family with me. That is what happens.
http://www.nakedcapitalism.com/2009/10/guest-post-the-other-economic-crisis.html
And it would appear that the poor economic conditions are leading to an acceleration of the aging baby boomer population electing to retire and take Social Security, which will tax the system earlier than demographic models have predicted. We unfortunately, demographically speaking, are coming upon a time when people should be working longer, yet the bad economic times are causing the opposite.
http://www.financialarmageddon.com/2009/10/not-so-negligible.html
And to add to our demographic woes, pensions far and near - especially government pensions - are being severely stressed in this recession. Some managers claim they will never recover and be able to pay full benefits. Worse yet, despite significant drops in values over the past two years, many are turning to or keeping with risky investments to boost returns. If you read the lead in link on this post above, you will see how truly foolish such a strategy is today. The stock market is up at an unbelievable level right now, so the pensions should be taking their profits and hunkering down for a while. Economist after economist is referring to the current market conditions as irrational. And yes, I know that Keynes said markets can stay irrational longer than I can stay solvent, but at some point gravity sets in big time and I do not see pension managers catching the turning point this time around if they did not last time around. There most certainly is no significant medium term gain from where we are now, but heck, what do I know.
http://globaleconomicanalysis.blogspot.com/2009/10/five-major-pension-problems-one-simple.html
It's the Climate!
Now that I have you really in a good mood, let me pop this tidbit upon you. New research says that prolonged CO2 levels slightly above current levels (where we are heading and expect to head) may be tied to ocean levels 100+ feet higher than where they are currently. The scientists cannot say with any certainty how long it would take at these levels of CO2 for this to happen or if exceeding these CO2 levels significantly - as expected in the medium term - might tip the scales toward a rapid acceleration, but it is certainly something to tell you children about when they ask for a scary story. So what happens if the oceans rise 100+ feet? My home in New Hampshire probably becomes beach front. But with the accompanying financial melt down, I will consider moving to the Himalayas.
http://news.bbc.co.uk/2/hi/science/nature/8299426.stm
Disclosures: none.
http://jessescrossroadscafe.blogspot.com/2009/10/speculative-bubble-in-equities-and-case.html
My favorite chart is this one:
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0tSSvJdVtfy1fsn-x1TMB2fb0SNC-VyAoLffeEOmcHlfBMWMlQw3XRTYYS5bMXmiFpNXrKpPuTSn1DlubBHbSSab6zbNV1R4AtVjru1o1iI4ZWJ8AbHKRuJguCiB00-vdqv20FXF8laM/s1600-h/peratio.jpg
Look at that link and tell me you are dying to buy into this bull market.
It's the Demographics!
There has been significant focus on a whole host of economic woes facing us in this recession. Not to depress you, but if we escape our current economic mess, predictions are that the demographics in the U.S. still doom us to an ultimate depression. In other words, our economy was already doomed, without the recent recession, as we have an aging population to support and no obvious means to do so. So what happens if the current crisis is still looming or our newly created bubble bursts when the demographic issues really start to set in? I am moving to Brazil and taking my family with me. That is what happens.
http://www.nakedcapitalism.com/2009/10/guest-post-the-other-economic-crisis.html
And it would appear that the poor economic conditions are leading to an acceleration of the aging baby boomer population electing to retire and take Social Security, which will tax the system earlier than demographic models have predicted. We unfortunately, demographically speaking, are coming upon a time when people should be working longer, yet the bad economic times are causing the opposite.
http://www.financialarmageddon.com/2009/10/not-so-negligible.html
And to add to our demographic woes, pensions far and near - especially government pensions - are being severely stressed in this recession. Some managers claim they will never recover and be able to pay full benefits. Worse yet, despite significant drops in values over the past two years, many are turning to or keeping with risky investments to boost returns. If you read the lead in link on this post above, you will see how truly foolish such a strategy is today. The stock market is up at an unbelievable level right now, so the pensions should be taking their profits and hunkering down for a while. Economist after economist is referring to the current market conditions as irrational. And yes, I know that Keynes said markets can stay irrational longer than I can stay solvent, but at some point gravity sets in big time and I do not see pension managers catching the turning point this time around if they did not last time around. There most certainly is no significant medium term gain from where we are now, but heck, what do I know.
http://globaleconomicanalysis.blogspot.com/2009/10/five-major-pension-problems-one-simple.html
It's the Climate!
Now that I have you really in a good mood, let me pop this tidbit upon you. New research says that prolonged CO2 levels slightly above current levels (where we are heading and expect to head) may be tied to ocean levels 100+ feet higher than where they are currently. The scientists cannot say with any certainty how long it would take at these levels of CO2 for this to happen or if exceeding these CO2 levels significantly - as expected in the medium term - might tip the scales toward a rapid acceleration, but it is certainly something to tell you children about when they ask for a scary story. So what happens if the oceans rise 100+ feet? My home in New Hampshire probably becomes beach front. But with the accompanying financial melt down, I will consider moving to the Himalayas.
http://news.bbc.co.uk/2/hi/science/nature/8299426.stm
Disclosures: none.
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