This page has been archived and commenting is disabled.
Bill Fleckenstein Says You Can't Trust S&P PE Multiples As All The Financials' Earnings "Are Pure Nonsense"
A casually dressed Bill Fleckenstein was on Bloomberg TV bursting assorted myths and bubbles. First, Bill discusses how the market is no longer a discounting mechanism, noting that "after having completely ignored the bursting of the dot com and the real estate bubbles, i think this a function of the fact that since Greenspan took over the Fed and serially bailed out bigger and bigger problems with more and more easy money, the market evolved into much more of a speculative casino, and a lot more momentum type traders began to operate and everything always resolved itself on the upside... We have had much more of a speculative market that seems not to discount problems." As for Bill's forecasts: the big bounce off the lows has run out of gas, the economy is sputtering, the real estate market is still in trouble, the Fed will find a way to print more money which will give the market a bit of a boost, yet this will be offset by problems in Europe and domestically. "I don't see how the market can go up and make new highs" says Bill. As for the allegedly cheap 13x that the market is trading on, and that David Kostin likes shoving down every Goldman client's throat on a daily basis, Fleckenstein says, "13 times is only cheap relative to the last decade and a half. In the 70s and 80s, the market was trading at 8x and dividends were double where they are. I don't know how much of those S&P earnings are due to financials: all the financial earnings are pure nonsense, they are making it all up, we don't know where assets are priced necessarily and they are bailed out on the back of the Fed putting rates at zero. So I don't believe the earnings and I don't know what the multiple's going to be. It could easily trade at ten times."
h/t Jing
»
- 11744 reads
- Printer-friendly version
- Send to friend
- advertisements -
Is he wearing lavender?
What do you expect, he is from Seattle!
What would you expect, he is a douchebag!
If by "douchebag" you are referring to a device used to irrigate dark, fetid cavities with a clean, refreshing flow then perhaps Mr. Fleckenstein is a douchebag. His insightful discussions of all thing financial have been a mainstay of my reading for years. I don't always agree with Bill, but he irrigates the mainstream financial media (a fetid, dark cavity of misinformation, distortion and cheerleading if there ever was one) with a fresh flow of ideas and perspective. I know...I know...why don't I just marry him?
You're looking at it ALL wrong...There's a carnival in there!
This coming from a guy named Turd wearing ..... just what is it that POS you're wearing?
Bill Fleck is a straight-shooter. Not a limp dick like some around here.
The fact that you identified it as lavender says more than him wearing a purple shirt.
;)
In other words, whomever smelt it dealt it? ha!
Please repost in the Wooly Mammoth fart thread...Thx! ;)
I'm proud to say I was in that thread. No wait, I had nothing to do with that thread. :>)
Periwinkle ?
No need for name calling.
I said "...winkle" not ...wankle. LOL
Precisely.
If I may speak for all my "Sister's" here at ZH. Women can not take a man seriously who wears, Lavendar, however some men can wear pink and be taken seriously.
Please name one, sister.
Chicks dig pink, and so do I ;)
...nor can men take women seriously when they can't spell or use punctuation properly.
.. and we MEN cannot take a WOMAN seriously if she cannot spell properly.. or is your typing a little weak? ;-0
I'll bet he lost a bet with his wife...
I believe it's a light puce. He's man enough to pull it off, though.
There is a simple way to evaluate whether the financial sector is fixed and that is dividends. The only reason people bought bank stocks was the huge yields. Banks are making huge profits again, but it's all binary money thanks to changing of accounting rules.
We'll know when the banks are healthy again, and that will be when they can start paying 5-10% yield dividends.
+10000
Well timed reply morph, #444444.
Who will be #500000?
And then the big one: #1000000
The question is: who is going to be #666666?
The level of jealousy I have right now for morph hitting #444444 is only rivaled by the fact that I'm not completely badass enough to wear a lavendar T-shirt on Bloomberg TV and completely rip the banking sector for the charade that it is. Hear's to you, Mr. Fleckenstein!
For sure.... I have some FITB that declared $.01/share -- yay a whole penny per share, I can hardly contain myself (price is ~ $13).
Definately a child of the seventies judging by appreances only.
He is absolutely correect. What a con job. And the bailouts are even more disgusting when the banksters continue to pay themselves insanely high bonuses based on the fictitious earnings. Talk about fraud - this is the biggest of all.
Nice. Straight, not too much hyperbole, but the comment on financial profits is right on the money (no pun intended).
I got twenty dollars that Betty asks him "what's a good stock to buy" on her next question!!!!
Obama got right on top of that issue and appointed a pay czar. Nothing to see here folks, move along.
If Bloomberg HAS to rent brain-dead newsreaders to stand in front of the camera and ask dumb questions of people who actually know how to make money--you could do a lot worse than Betty Liu.
Her hair alone makes me want to buy call options on Bloomberg stock.
Yes, but does it ALWAYS have to be the same dumb questions?
Uh oh. A teller of the truth.
Can't have that now...
/sarcasm off
They knew he was going to say "buy gold"
Is he a gold bug now? I seem to remember him kind of on the fence on how bad things will get and how high gold will go.
Is he a gold bug now? I seem to remember him kind of on the fence on how bad things will get and how high gold will go.
http://commoditytradealert.com/blog/?p=7292
yep.
Is it just me or does Betty usually say "Boomberg" instead of "Bloomberg"?
It doesn't matter, I only listen to Gigi and Suzane
Very early in the video she said "brind" rather than "blind". Sounds like a speech issue or just an accent. But she does have a problem with the "l" letter. If you listen carefully she has issues with other letters. Was she born and/or rasied in an Asian country or is English a second language?
"crystal clear" is a tongue breaker for japanese....
Lui? Japanese? Try again Hank Hill... ;)
LOL
Dude,
You've been hot for over a week now. Is it a streak, something you eat or maybe you're in love? :>)
Its her accent
Spot on analysis.
Don't care what he wears. I am be glad to hear the truth occasionally, even if the speaker is dressed in a grass skirt and tux jacket. (Diogenes lived in a clay pot and didn't wear any clothes, as I remember the story) So when we get an "honest man" lets not quibble over how he is dressed
Luckily, he was on Bloomberg, because he would have been stripped and flogged on CNBC
But he is 100% correct. Nothing but a bigger shell game being played with people's money. I bet they have none of their own money at risk, any money belonging to them is being hoarded or parked with Timmy flipping 28, 56, 91 day bills.
Bullseye! Thank you Bill, for pointing out the emperor banks are naked. The mark to fiction value of the assets on their B/S, or more accurately BS sheets proves that accountants and regulators have a sense of humour .
Zombie banks, let's do the Zombie bank...
http://www.markfiore.com/zombie_bank_0
hahahahahaah great!!!
Bullseye! Thank you Bill, for pointing out the emperor banks are naked. The mark to fiction value of the assets on their B/S, or more accurately BS sheets proves that accountants and regulators have a sense of humour .
Zombie banks, let's do the Zombie bank...
http://www.markfiore.com/zombie_bank_0
Okay , someone kick me in the head, am I reading this right from CNBC? I never seen anything like this released from them, where they acutally say people losing job benefits is bad.
http://finance.yahoo.com/news/Loss-of-Jobless-Benefits-cnbc-3478801692.h...
basically, paying people not to work isn't exactly productive
Unless you're trying to produce dependence, helplessness and lethargy.
When I watch something like this, I want to be backstage at the studio so I could catch the guy on his way out and ask what he was trying to say everytime he got interrupted.
a bullish 2012 case is 88 and FY2 should be about 10x so 880 sounds a good point to cover my short
Take off those rose-colored glasses, Polyanna.
What is the FED to do now?I mean they have implemented ZIRP.......fired BAZOOKA'...... tried Q.E & STRESS TESTS........and even COMIC BOOKS the list goes on.
The FED has only one option left. The time has finally come to execute PLAN 9 FROM OUTER SPACE
http://www.youtube.com/watch?v=gK4olkFGJrw&feature=related
Due to currency debasement it's now PLAN 9000 FROM OUTER SPACE
William Fleckenstein, John Hathaway, Bill Laggner, Felix Zulauf ... +1
Betty Liu....yummy
Your pick: Betty (NYC) or Susan (HK)?
Why not do them both?
Sustainability...
No not me, the environment -- you just vent off too much CO2 when you tag-team, plus you practically double the chance of accidental pregnancy (if you do it properly). ;)
She seems displeased to be talking to Fleck. Almost annoyed.
I got the impression the Fleck interview interrupted something else that was more enjoyable. She lead into the clip with a giggle and a smile so maybe it was the prior conversation.
Or maybe something was going on under that desk of hers.
I concur with the posts above: great video. Seems so simple, when you use real numbers, huh? Using Schiller's trailing 20 yr avg p/e, current valuations are just under 19, versus a long term average of low 16s. And, long term structural bull markets in the past have begun w/ this p/e measure in mid single digits.
We eventually need to go down. Maybe that will washout some of the algos?
Wow. So the S&P500 is essentially fake until the end of 2012?
dont expect to see him on again Bloomies until the next decade. Who does he think he is, the next contestent in Truth or Consequences? He wouldnt be on Crap Nothing But Crap, because thats a different show:
Lie or Consequences
Ms. Liu's body defensive language was interesting...
That's what I noticed. Arms crossed, annoyed.
Too bad her face wasn't saying "send me another bear".
Fleck has been the best investment I have ever made. $100 a yr.
https://www.fleckensteincapital.com
Throw in Fred Hickey for $150 (I think that's what I pay) and that'll do.
As for Leo, you get what you pay for!
He is correct. Besides, bank earnings, fictional or not, matter not to the shareholding public because the banksters keep them all for themselves.
Folks, at the risk of sounding arrogant, or too doomer, this too is dishonest or uninformed. The whole system is broken. It is too complex and can't be fixed. Everything is propped up nonsense. We are living in the land of the absurd. The following are some of the various responses we see to our fun house mirror, wonderland reality:
I think many fall into the #4 category. I think everything we are being told is fantasy, not simply because of "mark to model" vs. "mark to market" BUT BECAUSE OF THE DERIVATIVES IN ALL THEIR UNHOLY FORMS THAT MUST UNWIND IN A CHAOTIC, LOGISTICAL, CRAPSHOOT, NIGHTMARE. This is what is really being prevented, right this second, as I type on my laptop, digest my meal, and enjoy my coffee in the air conditioning, knowing, with reasonable confidence, that my husband and child are safe.
The truth is there is no truth except that the system is broken and what we are currently doing is unsustainable. How to transition is the issue and very few are willing to step up to the plate to discuss that.
My 2 cents today. Stop looking for sense/cents. There is no sense to be made because it is all a fabrication.
But hey, thats okay, I forget every other minute and start to try to make sense out of it, again.
Peace.
Well you didn't sound arrogant, ignorant yes.
Not sure how you can come to the conclusion that "this too is dishonest or uninformed". He said it was nonsense. Given the time he would have gone on but it's a few minutes of air time.
I think most of the MSM falls into category #1
Investment banks and Hedge funds in #2
Persons who voted for the current administration in #3
Zerohedge and many financial bloggers in #4
And #5 crowd is too busy looking for a job to waste time on this kind of gambling...
...all the financial earnings are pure nonsense, they are making it all up, we don't know where assets are priced necessarily and they are bailed out on the back of the Fed putting rates at zero.
I was thinking he missed the mark a bit with that myself. I don't attribute it to a time constraint as someone said either. Toxic assets got shuffled onto the agencies and the fed. Earnings are bogus because they all still book unrealized profits ala WaMu (but rarely book a loss). Stocks are propped up by 0% short term uber-leverage. Bonds are likely the same way. These fictional profits pour into bankster bonuses and window dressing tarp repayments. "$h^t's messed up bad" would have covered it.
I'm assuming those derivatives are the $quadrillion worth of CDs's out there waiting to get payed out. There is no way out from under them since they represent many multiples of the entire world's GDP and will not be defaulted on since the holders of these contracts carry the central bankers, politicians and the entire worlds financial industry as their collectors. That's what stimulus and QE is all about. That's also the motivation behind blocking any austerity measures the EU is threatening. And as for force majeure, that's a call to war for any nation naive enough to play that card.
I don't know that it's too complex to be understood. Asset bubbles created by insane credit expansions have to deflate. Tricks are being employed to put off this inevitability. They will fail. Standards of living will decline dramatically. The developed countries will come to resemble today's Third World. There will be much wailing and gnashing of teeth. The important thing is that right now your husband and child are safe.
Currently, 3.91% on the 30yr bond. It is about to get nasty in stock fantasy land.
GAAP !!!! Gone and sorely missed.
Viewing the small lead-in picture, this guy looks like the Fonz
Are you saying he is perpetuating a Fonzi Scam?
(I stole this joke from another poster. I don't remember the name, but it starts with Dr. (Cindy? Sandy?)
Dr. Sandi
http://www.zerohedge.com/users/dr-sandi
Thanks!
is that a mullet?
Certainly a lot of details like that to take into consideration. Thanks windows vps | cheap vps | cheap hosting | forex vps