This page has been archived and commenting is disabled.

Faith Vs Fate

Tyler Durden's picture




 

The S&P 500 P/E ratio is testing 15x - its highest in 19 months. This takes the stock market's valuation back to its highest since the debt-ceiling debacle and USAAA downgrade (as if nothing ever happened). Since that time, expectations for GDP growth in 2013 has plunged from 3.2% to a measly 2.0%. The 'Market of Dreams' economy continues as Bernanke's "If you BTFD, we will recover" is the only mantra left. Was it only August 2007 that Bob Pisani was reminding us all that: "improved policies on the part of those steering the economy are the likely reason we have avoided recessions."

 

Though perhaps, just as we feel invincible, it is worth remembering how quickly that multiple expansion can collapse...

 

and from everyone's favorite floor-talker, Bob Pisani - August 2007:

Talk about a recession from a very small group of people need to be balanced against the fact that no major strategist is predicting a recession. Many are trimming their forecasts slightly, but that is a long way from a recession.

 

...

 

Looking at across the uneven economic history of the United States, one thing is very striking: how few recessions we've had in recent memory. The National Bureau of Economic Research (NBER) has noted that there have been only two recessions (1990-91 and 8 months in 2001)-- both of them mild--in the United States over the past 25 years; over the previous 35 years, they noted, there were eight.

 

...

 

This "great moderation" of the economy has been explained many ways--luck, structural changes in the economy, etc., but in the end even the cautious NBER admits that improved policies on the part of those steering the economy are the likely reason we have avoided recessions.

 

It seems we will never ever learn...

 

Charts: Bloomberg

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/08/2013 - 16:05 | 3226859 hannah
hannah's picture

you cant have a recession with bogus gov numbers....

Fri, 02/08/2013 - 16:18 | 3226908 Say What Again
Say What Again's picture

The Pissanti can say whatever he wants...

... but I wonder if he ever needs to buy a tank of gas?

The price of everything is going up at a much faster rate than my income.

Maybe I need to consult with that teen-age bitch from Desperate Housewives (Rachel Fox) to give me some help with my disposable income.

Fri, 02/08/2013 - 16:20 | 3226929 ziggy59
ziggy59's picture

I call him Pissonu...like all the collared MSM widgets, they piss on u(and me) and say " free lemonade"

Fri, 02/08/2013 - 16:22 | 3226936 Say What Again
Say What Again's picture

I suggest that you not stand so close to your TV.

Fri, 02/08/2013 - 16:49 | 3227074 Spirit Of Truth
Spirit Of Truth's picture

It's all about Dow 14K and the Grand Supercycle peak in man's manic-depressive mood swings:

http://thespiritoftruth.blogspot.com/2013/02/dow-14000-world-war-three.html

Sat, 02/09/2013 - 02:55 | 3228298 Lord Of Finance
Lord Of Finance's picture

 I'll consult that teen-age bitch.

Damm right.

 

   "Somebody tell that bitch to be cool! Tell that bitch to be cool! Say bitch be cool! Get that bitch to chill!!!

Fri, 02/08/2013 - 16:26 | 3226951 Groundhog Day
Groundhog Day's picture

"if you build it they will come"...oopps wrong movie

"if you print them, they will rise"...fixed it

Fri, 02/08/2013 - 16:59 | 3227126 madbraz
madbraz's picture

P/E is not 15, unless you want to accept fantasyland operating earnings - not that reported earnings are real anyway.

 

Under GAAP reported earnings, P/E is currently 17.  Shiller P/E is north of 22 and a clear indicator of bubble territory.

Fri, 02/08/2013 - 17:30 | 3227252 madbraz
madbraz's picture

Also, if you check Standard and Poors and their compilation of sales for every company in the SP500 index, they will tell you that sales are some 5% higher than Q4 2012.

 

Look at their spreadsheet for compiling this crap, http://www.standardandpoors.com/indices/articles/en/us/?articleType=XLS&...

on the tab "Issues", line 251 and 262, the sales of Philips 66 and Prudential show a gain of $76 billion over 2012!  This is due to acquisitions/mistake, not apples-to-apples sales growth.

Back those 2 items out and sales growth is 1%.  This is not even accounting for the fact that more companies made acquisitions of smaller companies rather than sales of subsidiaries in 2012.  I suspect when you eliminate that effect and have real "same store sales" kind of figures it would show close to 0% sales growth.

 

 

 

 

Fri, 02/08/2013 - 16:07 | 3226860 Yen Cross
Yen Cross's picture

 Where is the "Spear of Destiny" , when we summon her?  Single Moms make for good Obamacare.

Fri, 02/08/2013 - 16:08 | 3226872 Seasmoke
Seasmoke's picture

i do not believe these charts UNTIL Rachel Fox tells me what she thinks of them

Fri, 02/08/2013 - 16:19 | 3226926 Say What Again
Say What Again's picture

Rachel Fox & Mandy should be the only people talking on CNBC.

Well, Rick Santelli is OK

Fri, 02/08/2013 - 16:09 | 3226877 Itch
Itch's picture

Tyler, see if you want this market to drop like a stone, start putting out bullish vibes and everyone will shit themselves. Thats a fact.

Fri, 02/08/2013 - 16:21 | 3226934 Say What Again
Say What Again's picture

Speaking of that ...

Whatever happened with the Anon hack into the FED and others recently.

I haven't heard of any fallout from their deep probes.

Fri, 02/08/2013 - 16:22 | 3226938 Itch
Itch's picture

Say whatever again motherfuck...

Fri, 02/08/2013 - 16:24 | 3226946 Say What Again
Say What Again's picture

true dat!!!

Fri, 02/08/2013 - 16:09 | 3226880 Rustysilver
Rustysilver's picture

even the cautious NBER admits that improved policies on the part of those steering the economy are the likely reason we have avoided recessions.

Should read: improved policies on lying about the economy

 

Fri, 02/08/2013 - 16:34 | 3227000 SheepDog-One
SheepDog-One's picture

'Improved policies' = more sophisticated lying and media cooperation to cover it up?

All we need next is Govt sponsored trolls like in Europe to try to shut people up.

Fri, 02/08/2013 - 16:11 | 3226889 rubearish10
rubearish10's picture

.....the Great Bluff continues. There's always somethin' that stops any kind of donwturn. Yeah, we sold-off" this week, what?

Fri, 02/08/2013 - 16:37 | 3226992 cliffynator
cliffynator's picture

Flat is the new down.  There are no more dips, just buy as we ramp forever up.

 

UPDATED: after the -1, let me add...  /SARC

Fri, 02/08/2013 - 16:47 | 3227061 rubearish10
rubearish10's picture

So true. I once believed there was at least a 50/50 chance the market could either go up or down, ugh!

Fri, 02/08/2013 - 16:13 | 3226899 NoDebt
NoDebt's picture

The only thing that will spook the markets now is a credible threat to the existance of the entire global banking and financial system.  2008 was such an example, as was the debt ceiling debate in 2010.  Nothing of less magnitude than that will move the needle.  Certainly not something as mundane as sub-par economic data.

Agreed with above- we may have seen the last DECLARED recession in our lifetimes.  There will only be preiods of steady recovery and periods of slow recovery.  The word recession is henceforth outlawed.  And using the D-word is punishable with prison time.

Fri, 02/08/2013 - 16:19 | 3226922 LawsofPhysics
LawsofPhysics's picture

Correct.  This will be about as successful as outlawing gravity.  Now we all get to find out what a currency collapse is really like and what the "price" of things you can't get is as well as what the "price" of things nobody wants is.

There will be no animal spirits until the supply lines break.

Fri, 02/08/2013 - 16:30 | 3226973 ekm
ekm's picture

Supply lines already broken

Fri, 02/08/2013 - 16:30 | 3226977 SheepDog-One
SheepDog-One's picture

I don't believe there was any 'credible threat' in 2008, other than the banksters sensed that their scam was in great danger....nothing has been solved, and a 'crisis' will hit again as soon as the banksters feel the next 'squeeze' from the tuition bubble imploding or whatever....but make no mistake they're monetizing the debt and thats the LAST act of all imploding empires/currencies. Its all going down one of these mornings, make no mistake about it. 

Fri, 02/08/2013 - 16:51 | 3227082 rubearish10
rubearish10's picture

"Its all going down one of these mornings, make no mistake about it. "

There's no epirical factual truth that supports your claim. besides, PPT would quickly go into action by the afternoon.

Sat, 02/09/2013 - 05:53 | 3228365 SeattleBruce
SeattleBruce's picture

"There's no epirical factual truth that supports your claim."

Other than all recorded fiat money history, that is...

Fri, 02/08/2013 - 16:17 | 3226916 ziggy59
ziggy59's picture

Bernanke mantra,: I manipulate; therefore I Am

Fri, 02/08/2013 - 16:20 | 3226932 ekm
ekm's picture

This is no stock bubble no bond bubble

 

This is Liquidity Bubble

 

Its about to implode

Fri, 02/08/2013 - 16:26 | 3226953 SheepDog-One
SheepDog-One's picture

Implosion as soon as liquidity feast causes projectile vomiting.

Fri, 02/08/2013 - 16:34 | 3226997 ekm
ekm's picture

 

There's nothing left to buy,

Hence excess money has to die,

And die it will quite soon

 

Fri, 02/08/2013 - 16:38 | 3227017 SheepDog-One
SheepDog-One's picture

Gonna be ugly....there's no spin pretty enough to cover up a high speed head on trainwreck.

Fri, 02/08/2013 - 16:44 | 3227044 ekm
ekm's picture

Laws of physics blogger is quite correct in his analysis.

 

Only that supply chain already broken if you check oil price and posts from blogger ADR

 

Fri, 02/08/2013 - 16:28 | 3226962 WTF_247
WTF_247's picture

I would not be suprised if GDP went to -1 ot -2% for a few quarters and the market did not sell.  The Fed is actively in the market buying/supporting. 

Large participants have been geared that there is no risk - any macro even that might happen will just be mitigated by more printing and more free money.  Heck - I would love to buy bonds at a discount from the auction and then flip them a few days later to the Fed for free profits.  Anyone have a few billion you can loan me to get me started?

If everyone decides there is no risk and does not sell, then no one loses money.  Traditionally there were early movers who were smart (exiting as the market nears a peak), then the fast movers who saw the game was over and sold as the believers kept buying the dip, and the laggards who only sell after the market is down 10% and they are forced to.  If everyone is on the same boat (i.e no risk of loss therefore no reason to sell) then the market will not correct.

All this does is set up for a massively bigger correction when it happens.  

2007 was evidence of that.  6+ months before the market cracked there was evidence all over the place of danger.  However, trying to short during this time was anything but easy money - even in the face of pending doom the idiots kept buying the dips and the markets marched higher through October 2007 hitting an all time high.

 

Fri, 02/08/2013 - 16:32 | 3226986 SheepDog-One
SheepDog-One's picture

Well, for the so-called 'market' to 'sell', there has to be buyers and there are no more real ones left anywhere. FED can print and buy as much as they want, but they can never offload their scam to anyone.

Fri, 02/08/2013 - 16:38 | 3227019 q99x2
q99x2's picture

Gator's on the prowl. 

Fri, 02/08/2013 - 16:51 | 3227080 Kilgore Trout
Kilgore Trout's picture

"...those steering the economy..."

Reminds me of:

"When  I die, I want to go peacefully like my Grandfather did -- in his sleep.  Not yelling and screaming like the passengers in his car."  --Jack Handley

Fri, 02/08/2013 - 16:53 | 3227091 Yen Cross
Yen Cross's picture

X15  is based on $16 Trillion of liquidity in 4 years. Tyler is being gracious/ fact is (sixteen trillion dollar equivalent)

 

  The T16 is valid. I'm tired Bitchez    catch you later, after I close My ponzi Hedges!

Fri, 02/08/2013 - 20:35 | 3227718 RopeADope
RopeADope's picture

Primary export of the US is USD, we are doing very well thank you. Stop looking at those dark ages GDP figures.

Fri, 02/08/2013 - 21:52 | 3227905 Totentänzerlied
Totentänzerlied's picture

There is no growth here.

Who you gonna believe, them or your lyin' eyes?

Sat, 02/09/2013 - 05:14 | 3228352 Grand Supercycle
Grand Supercycle's picture

DOW monthly chart shows impending Wile E. Coyote drop.

It doesn't take a genius to realise this chart will end in tears.

Longs please be careful.

trader618.com

Sat, 02/09/2013 - 13:47 | 3228814 kavaron
kavaron's picture

I wish we had Bernanke here in Europe. You guys have no idea how good he is. If he stops printing then unemployement will go to 10-15%. Austerity is not the solution...

Do NOT follow this link or you will be banned from the site!