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Latest Observations On Ponzi Markets Courtesy Of Capital Markets
From Capital Economics' Global Markets Update:
According to the US Federal Reserve’s latest Flow of Funds report released on Thursday, the market
value of corporate equity at the end of the second quarter was 0.78 times companies’ net worth at
replacement cost. We suspect the continued rise in share prices during the current quarter has since
pushed up this ratio – known as “equity Q” – to around 0.9. The geometric average of equity Q since
1900 is around 0.64. The stock market is therefore roughly 40% overvalued relative to historical
trends based on this yardstick. Our other favoured metric, the 10-year cyclically-adjusted P/E ratio
(CAPE) of the S&P 500, also suggests the market is overvalued. At a current level of more than 19, the
CAPE is about 30% above its long-run average of below 15.
h/t E.C.
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Truth tellers are not welcome in this market or in this country. Homeland security will soon be knocking on your door.
More like RepoHomeland security if you ask me.
"The stock market is therefore roughly 40% overvalued" and on its way to being roughly 80% overvalued.
Keep passing the crack bowl, just make sure you aren't holding the pipe when the pigs kick down the door...
Jim Willie is making fun of Barrick Gold again. LOL It's like watching a kid poke a possum playing dead with a stick.
http://www.321gold.com/editorials/willie/willie091809.html
Right now you're not buying stocks on the stock market, you're buying futures of stock... and everyone knows what the risks are with futures, especially now.
HAL9000 is the only factor that matters in this farce.
This market is pure bullshit, and our economy is doomed to collapse because of this.
So how does an investor determine replacement cost of assests already on the ground?
Without a constant value, non-manipulated yardstick to measure against, both the current "value" and the future stream of "income" are fraught with iffiness.
But hey, it's a casino world afterall.
40muleteam borax.
So how does an investor determine replacement cost of assests already on the ground?
Without a constant value, non-manipulated yardstick to measure against, both the current "value" and the future stream of "income" are fraught with iffiness.
But hey, it's a casino world afterall.
40muleteam borax.
replacement cost of assets = real value of assets minus puffpuff values of junk paper and miscellaneous crap that has no market times illogical and pathological assumptions on income stream. Variant +/- 100 bps.
The question is .. now that we have just recently been through this Bailout episode ... once the willfully ignorant lemmings are walked (Fed) into the buzz saw once more and the stock market craps out (and "confidence" wanes), and the STBTF (Still-Too-Big-To-Fail) come back with a gun to their own head warning us about going back to the 1600s and assuring us AGAIN that saving their asses is "less worse" than the alternative: WHAT THEN?
Instead of bonuses, the Banksters should be getting indicted.
I'll say it again; "The change we can believe in" = give the Fed a dollar, get back a nickel. "Here's yer change."
Thanks Helicopter Ben!Thanks Timmy! Thanks Barry H!
signed,
TSTBo (Too-Small-To-Bailout)