Albert Edwards: "We Are Returning To 450 On The S&P"

Tyler Durden's picture

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OrdellRobbie's picture

support and resistance bitchez!!!

NoBull1994's picture

The problem with this analysis is that 450 in 1982 and 450 and 2010 are two completely different numbers in real dollar terms.  Albert needs to adjust his math for inflation.  My guess is that 600-700 is the bottom.

Roi's picture

He is talking P/E vaulations. The S&P was around 125 in 1982.

thesapein's picture

Nah, we really should stop "adjusting" for inflation every time someone asks. Stop trying to manipulate the numbers around the dollar. It just hides the facts.

Marc45's picture

That's fine as long as you're not referencing or pricing in terms of dollars.  Otherwise, the "value" of the dollar is material.

thesapein's picture

Just stop, please. To "adjust" for inflation you have to make changes to the rates based on a basket of rates that also changes who contents might come and go and which also change in their rates... It's like an orgy of fiat adjustments.

Why manipulate the original data?

If you really want to see what's happening before tying to make it looks a certain way, try a more scientific approach, using real data.

Ripped Chunk's picture

It's actually getting funny the comments that get junked here now a days. Turning into Troll City.

I think I will lease some foreclosed on land from Wells Fargo and  open an amusement park called Troll City just to see who shows up.  Of course the bankers will want a free tour before the grand opening. We can test the acid dousing and Gatling guns in the fun house on them........ 

RichardENixon's picture

I automatically junk anyone who uses "bitchez" at this point, it's gotten so lame.

Ripped Chunk's picture

But I didn't use "bitchez"??  I just assumed I got junked by a Wells Fargo employee.

My response to that is: Bring the whole family for a day of fun at Troll City! Free hot dogs!

Don't want a bunch of little future bankers living to see tomorrow either.

Ripped Chunk's picture

I didn't think you did because neither myself nor the two commentators above who made legitimate remarks that should not have been junked used "bitchez".  Like I said, it's TROLL CITY

RockyRacoon's picture

You used "bitchez" -- I junked you!

Ripped Chunk's picture

Rules are rules. Lets take the SEC for example.....................

Dr. Sandi's picture

You used "bitchez" -- I junked you!

Damn your ring-tailed logic.

cougar_w's picture

Exactly. Inflation is part of the problem.

"The doctor says I'm quite fit ... for someone who has terminal cancer. My weight loss is therefore a good thing. By the time I'm actually dead, I'll be in perfect health for a person recently deceased."

thesapein's picture

awesome metaphor!

Might I add that you could be seen as healthier in comparison if most every one else were also suffering from disease.

cougar_w's picture

And there are whole segments of the cosmetics industry and all of plastic surgery devoted to achieving nothing else. No slam against the terminally ill, but it's illusion.

Propaganda works at many levels.

rosiescenario's picture

...amazing what a course of 5FU can do to any weight issues one might have had....

chindit13's picture

Once you are dead, the rate at which your health is declining will slow to zero, which represents an inflection point, now known euphemistically as a "Green Shoot", and in the funeral industry as "Pushing Daisies".

I am now convinced that Lazarus did not actually rise from the dead and walk, but only that his rate of decline slowed.  I then went to the Mormon Church archives, which have the world's best genealogical records, and found that one of the descendants of John (Gospel of John) is Steve Liesman.  It all began to make perfect sense.

hangemhigh's picture

s&p 450 actually takes us back to august 1994 which is when abby joseph cohen first made her bones and this massive ramp in equities really began.  the dow at the same time was about 3600.

were we to return to those numbers (sp450 / dow 3600) it would mean 'reversion to the mean' in spades........  

spinone's picture

Thats returning to the mean.  Reverting to the mean is when the line goes below the average low enough, and stays there long enough to keep the mean the same over time.  The area of the curve above the mean has to equal the area of the curve below the mean of the CAPE.  Or else the mean has changed, and everything is different this time.

anony's picture

Bet your sock drawer has precisely 7 pairs of perfectly folded anklets.

Helix6's picture

Won't happen.  The CPI in 1993 was 145.  Now it's 218.  450 * 218 / 145 = 676 in today's dollars.  If you can believe the CPI, that is...  I tend to think it's much higher, giving an equivalent S&P of around 900.

masterinchancery's picture

The fundamentals in 1982 were soooo much better than they are now, with p/e's of solid stocks at 4-5.

torrente's picture

Never forget inflation that time was double digit heavily affecting DCF valuations.

ebworthen's picture

Two years ago I calculated that when we played out the 1929-1932 scenario (a loss of ~79%) we could end up at DOW 2,900 and S&P of ~326.

It happened then, it could happen now.

Except that now, lots less people know how to grow and raise their own food and we hadn't yet then prostituted our manufacturing and industry out to our biggest competitor.

Yikes's picture

Looks like I picked the wrong decade to stop drinking.

JenkinsLane's picture

Looks like I picked a bad day to quit smoking.  

Henry Chinaski's picture

Got completely out of smoking in 2006,then doubled down on vodka. 

Lately, I drink vodka like it's my job.

Ripped Chunk's picture

Don't worry, it's drink like a pirate day (ever day)

Rusty Shorts's picture

 - yeah, I've put away several barrels of beer and wine since joining ZH a year ago...wait, WHAT, it's my ZH birthday Bitchez !!!!

Ripped Chunk's picture

Oh Yea!

Vodka! It's always for breakfast now!

ColonelCooper's picture

And it's always seven in the morning.

HAPPY BIRTHDAY RUSTY!!!

Occams Aftershave's picture

Yes, put away some cash for a rainy decade.

dukeness's picture

Looks like I picked the wrong decade to stop sniffing (bullish) glue.

Hard1's picture

hahahaha same here!!! and smoking....I guess I'll just pick it up again Cheers!!!

rosiescenario's picture

...me too, and I'll double up on the snuff dipping...that should helpspeed the end of the 'lost decade'...maybe I can get it down to 200 dayz???

rosiescenario's picture

...me too, and I'll double up on the snuff dipping...that should helpspeed the end of the 'lost decade'...maybe I can get it down to 200 dayz???

Gimp's picture

Everytime I start shorting the ponzi masters pump it up, pump it up. Classic squeeze, trap, balls stuck in the golf ball washer.

I will watch and wait as the big PONZI could go on for a while before any sign of collapse.

 

papaswamp's picture

hey they have to keep it pumped up until election time.

giddy's picture

...and knowing that helps guide decisions...