"Giddy up! The Four Horsemen of Tech", July 17, 2015 - "Google, Apple, Amazon, and Facebook -- helped push the Nasdaq to an all-time high Friday morning."
"Cramer's Four Horsemen Of Tech" - September 25, 2007 "Apple, Research in Motion, Google and Amazon.com are up 31% as a group since he recommended them back on June 6. Despite the market being down today, each of these four stocks hit new highs."
"The Four Horsemen Of The New Economy" - October 2, 2000 "More than any other collection of companies, Oracle, Sun Microsystems, EMC, and Cisco Systems represent the building blocks of Net business."
While the party in the 1990s ended badly, the festivities currently underway may end in outright disaster. The party-goers may not just awaken with hangovers, but with missing teeth, no memories, and Mike Tyson's tiger in their hotel room.
This weekend's reading list is a smattering of articles to enjoy between your favorite beverage, grilled meat and really fattening desert. Just remember to go back to the gym on Monday...
If there are two things that are scarce in the US it’s good jobs and affordable housing. But all is not lost, because apparently, there are some places in America where the Goldilocks combination of good jobs and affordable housing actually exists.
The current asset bubble depends on a number of perceptions that could easily be put to the test by unexpected developments. There is a widespread consensus on a number of issues. This includes the belief that the economy will strengthen, that the emergence of “price inflation” is practically impossible, that “QE” will always guarantee rising asset prices, and that central banks have everything under control. Now we learn that in addition to this, a surprisingly large number of traders has no experience beyond the ZIRP & QE era of recent years. Meanwhile, the market’s underpinnings in terms of liquidity exhibit numerous weaknesses.
Promptly upon release of today’s GDP update, Steve Liesman and his Wall Street economist pals spent 10 minutes bloviating about why the negative print should be completely ignored. The MSM cheerleaders like Liesman and his pals cannot see the handwriting on the wall because central bank bubble finance has essentially abolished the old rules of macro-economics. Someone should tell them that an economic deja vu is about to happen... all over again!
It is perhaps an emblematic description for our current bubble age; QE doesn’t work but “we” can’t wait for more. Maybe that is just the logical evolution of monetary magic, since QE was brought on with almost mythical properties that were going to cure a lot of financial and economic ills (Bernanke the former). Now resignation (Bernanke the latter) has left it with only the hope that it can just save us from the worst downside, even without any real expectation of a true upside in the economy. In other words, markets hope for the QE zombie, where the economy is kept from death by it, with full recognition now that it will never regain full life either.
What's the opposite of 'Goldilocks'?
Despite the exuberant goldilocks-esque meme from Friday's payrolls reports (and revision), The Fed's very own multi-factor Labor Market Conditions Index fell in April by the most since June 2012. Certainly not the Goldilocks data we have been propagandized... The Labor market has only fallen more than this once since the great recession.
We currently have over 93 Million able-bodied people without jobs – and growing. This is why it’s near incomprehensible, as well as outright disgusting to me that such a dismal showing in both the headline number as well as the onerous implications of such a downward revision to the month prior, coupled with the outright fallacy of suggesting the rate of unemployment has moved closer still to statistical “full employment” came with near giddiness and if not outright back slapping. i.e., “This is a Goldilocks print. Not too hot – not too cold. With a report like this – The Federal Reserve won’t dare raise rates and might actually have to contemplate instituting another round of QE if not outright QE4ever!” And yes; that was the reaction paraphrased across the financial media outlets. Again, personally – I found it all repulsive.
In welfare state America its virtually certain that through one artifice or another taxes will go up and the national debt burden will rise to crushing heights in order to keep the baby boomers’ entitlements funded. While Keynesians and Wall Street stock peddlers are clueless about the implications of this - it actually doesn’t take too much common sense to get the drift. Namely, under a long-term path of fewer producers, higher taxes and more public debt, the prospects for rejuvenating the previous historically average rates of real output growth are somewhere between slim and none - to say nothing of the super-normal rates implied by the markets’ current bullish enthusiasm.
Despite goldilocks (to use a financial market cliche) conditions characterized by the interplay between yield-starved investors, rock-bottom borrowing costs, and companies’ propensity to leverage their balance sheet in order to inflate earnings and underwrite their stock price, at least one leading indicator is flashing red.
Despite US business media's propagandic imploring that Europe is recovering, is in a Goldilocks scenario, and is the best place to invest - all thanks to the magic of Q€ - it appears they forgot to tell the Germans. The ZEW Investor Expectations index fell for the first time in 6 months, without making a higher high, as Germany's DAX index rose to record-er higher highs. We've seen this pattern of momentum exuberance before...