Irrational Exuberance

Weekend Reading: Losing Faith?

"With President Trump embroiled in one entanglement after another and constrained by a deeply partisan legislature, the ability of the Administration to pass legislative agenda seems to be fading... along with investor 'faith' that they will."

'Dr.Doom' Warns "The Gap Between Wall And Main Street Is Widening... Correction Is Inevitable"

"Yes, inflation is low, and corporate profits and stock markets are soaring. But the gap between Wall Street and Main Street is widening. High market valuations that are fueled by liquidity and irrational exuberance do not reflect fundamental economic realities. An eventual market correction is inevitable. The only question is whom Trump will blame when it happens."

BofA: "Central Banks Are Now In A Desperate Dilemma"..."Start Buying Volatility"

"Central banks, the reason behind high asset prices and low vol, are now in desperate dilemma: politically unacceptable for bubble on Wall St, but central banks will be tightening into deflation; inflection point for volatility is upon us and we recommend investors buy volatility....Fed tightening in 2017 could easily be followed by easing in 2018, in our view."

A Record Number Of Market Participants Says The Market Is Overvalued, Surpassing 1999 Bubble Highs

The latest monthly Fund Managers (FMS) survey from Bank of America is out, and continuing the trend noted in previous months when the number of active managers who said that stocks are overvalued hit the highest in nearly two decades, the latest version reveals that the number of respondents saying that equities are overvalued has just hit a record high, surpassing the all time high set during the 1999 bubble.

Animal Spirits Are A Late-Stage Event

“While the temptations are great, and the pressures strong, illusions in numbers are only that - ephemeral, and ultimately self-destructive.