• Tim Knight from...
    11/26/2014 - 19:43
    I read your post Pity the Sub Genius and agreed with a lot of what you wrote. However you missed what I think is the biggest killer of middle class jobs, and that is technological...

Capital Markets

Tyler Durden's picture

Latest Observations On Ponzi Markets Courtesy Of Capital Markets

"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." - John Higgins, Capital Economics

Tyler Durden's picture

Recent Capital Markets Transactions Update

Recent trends indicate that the pick up in corporate finance transactions, especially in the equity capital market may be petering off. After hitting an unprecedented high in June as the market reached the head of what had previously been seen as a fake head and shoulders formation, the July afterburners in the secondary market did not translate into primary market strength. Additionally, the August run rate indicates that the primary market may well have peaked in the May-June timeframe.

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