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Four Signs That We're Back In Dangerous Bubble Territory
Submitted by Chris Martenson of Peak Prosperity blog,
As the global equity and bond markets grind ever higher, abundant signs exist that we are once again living through an asset bubble – or rather a whole series of bubbles in a variety of markets. This makes this period quite interesting, but also quite dangerous.
With equity and bond markets at or near all-time record highs, with all financial assets consistently shrugging off bad – or worse – news as the riskiest of assets continue to find consistent upward bids, we find ourselves in familiar and bubbly territory.
I can summarize my thoughts in one sentence: How could this be happening again so soon?
In times past, it took one or more generations between bubbles for people to financially recover and forget the painful lessons before they would consider doing it all again. Yet here we are, working our way through our third set of bubbles in less than two decades, which must be some sort of world record.
I will confess to my biases right up front: I have always been deeply skeptical of both the practice of running up debts at a faster pace than income (the common practice of the entire developed world over the past several decades) and the idea that the solution to too much debt is more debt, enabled by cheaper money courtesy of thin-air money printing.
In short, instead of seeing central banks as sophisticated stewards of intricate monetary policies, I view them as serial bubble-blowers and reckless debt-enablers whose only response, when confronted with the inevitable consequences of their actions, is to serve up more thin-air money at an even cheaper rate. And when that doesn't work, then they simply try even more of the same, but in larger quantities.
While I think central banks are populated by earnest people with impressive credentials who have rationalized their actions as being necessary and in service of the greater good, I also think that the biggest ones hold an entrenched set of institutional views that are dogmatic, fail to incorporate the idea of economic and resource limits, and are seemingly immune to healthy introspection.
Somewhere along the way, I would have hoped they might have noted that each new crisis is larger than the one before – necessitating an even larger response that begets an even larger crisis next time, etc., and so on. A corporate bond hiccup in 1994 led to monetary loosening that enabled the development of the Long Term Capital Management (LTCM) fiasco of 1998, which was followed by the tech bubble, and then the housing bubble, and here we are with a now global equity and bond bubble that is larger than all the prior bubbles combined. Much larger.
It was famously said that the market can remain irrational longer than you can remain solvent. And if the trading maxim, don't fight the Fed, is worth heeding, then surely one should absolutely not take on all of the central banks at once, either. So, the risk I run here in seeing things through my 'common sense' filter is that perhaps this time the Fed, et al., have got it right, and a true and lasting recovery is at hand.
With that caveat, in this report I lay out the five most worrisome signs that horrific market losses await the unwary, the careless, the reckless – and those who possess all three characteristics (i.e., your average central bank).
These are not normal times. The degree of separation between reality and today's financial markets is extreme, which means they have a tremendous degree of potential energy stored up that could erupt in a downward cascade at any time.
While we can’t predict the exact time or trigger of a market avalanche back down to reasonable levels, I can definitely advise that you do not want to be standing in the valley when it happens.
Four Signs That We're Bubbling
Here are the four things that convince me that we are in truly bubbly territory:
Sign #1: Junk Bond Prices at Record Highs
The Fed, et al., have been buying up all of the 'safe' bonds, with the twin intents of driving down interest rates and chasing investors into riskier assets. With lower yields comes (hopefully) more borrowing; and when investors move towards riskier assets, this drives up the equity markets – which, as the thinking goes, will paint a rosier picture of the economy plus boost consumer confidence and spending.
Along with this, however, we find speculators and investors, starved for yield, chasing the junkiest of the junk.
Indeed, the prices of these "assets" have recently been driven to all-time record highs, which means that their yields have hit record lows.
And not just "low" prices, but a brand new record low in all of financial history.
Sign #2: Junk Sovereign Debt Being Chased to New Highs
It was just over a year ago when Greece ten-year debt was yielding a whopping 30%, reflecting the poor economic fundamentals of the country and concern that the European Central Bank (ECB) might stop loaning Greece the principal and interest payments needed to prevent another default.
Oh yes, and let's not forget that just a year prior, more than $130 billion had been lost by Greek bond investors, which created a ripple effect across Europe, including recently crippling Cyprus' key banks.
Today? Greek ten-year debt is under 10%.
Greece Bulls Charge Into Corporate Bonds
May 15, 2013
Investors are returning to Greece, lured by receding fears that the troubled country will leave the euro and the high returns offered by many of its battered assets.
It is a remarkable turnaround. Only a year ago, Greece was toxic territory for investors. A debt restructuring had just wiped out more than €100 billion ($130 billion) in government bonds. The stock market stood at one-tenth its 2007 levels. A political earthquake had the country poised for a chaotic election.
But now the markets have turned. Months of relative calm in Europe – and the pressure to go somewhere, anywhere, for yield in a low-interest-rate world—has investors taking another look. The Athens stock market has rallied more than 80% in the past 12 months, with the Athex Composite Index rising 0.8% on Tuesday. Greek government bonds have been on a tear since June.
The real story here, about speculators – not ‘investors’ – returning to Greece, is that the world is so utterly starved for yield that even Greek debt seems reasonable now. In Greece, even as the trend towards buying Greek debt was building, the country's economy (as measured by unemployment and GDP) deteriorated sharply.
As compared to 2008, Greek GDP in 2012 shrank by 20%, and current trends continue to show 5%-6% shrinkage in 2013:
(Source)
In what sort of a world does serious economic contraction, spiking unemployment, extremely high levels of debt-to-GDP, and falling bond yields go together? A bubbly world, that's where.
Sign #3: It's Not Official Until It's Denied
The poster child for a bubble market has to be Japan, where the main stock index of the island nation, the Nikkei, is up an astonishing 70% in the past six months (!) in a vertical index rise that is well outside of our personal experience:
This isn't some penny stock, but the entire stock index for the world's third largest economy. Of course, the 'reason' for this rise centers on the actions the Bank of Japan is taking to debase its currency. The people of Japan are realizing that they cannot trust their cash and had better put it to use somewhere besides their bank accounts before its purchasing power is drained away.
After such an obviously unstable spike in the market, what's left to do but officially deny that it's in a bubble?
Stock Boom Isn't a Bubble, Says BOJ's Kuroda
May 15, 2013
TOKYO—The Bank of Japan's governor played down worries that the stock-market boom is a bubble and that a weak yen will stir cost-push inflation, signaling his resolve to press ahead with the bold monetary easing that has fueled stock prices and driven down the currency.
Grilled by lawmakers during a session of the upper-house budget committee, Haruhiko Kuroda flatly rejected an opposition-party member's argument that the recent rapid rise in the Tokyo stock market is out of line with Japan's real economy.
"At this moment I do not think they are in a bubble," Mr. Kuroda said.
Driving this bubble is the determined resolve of the BoJ to make the yen worth less, perhaps even someday worthless. For a major world currency, the chart below is quite startling.
If something is not official until it's denied, then the Japanese stock market is most definitely in a bubble. It should be noted that there are similar examples of stock indexes making new highs on bad news and weak fundamentals the world over, so we're not just picking on Japan alone here.
Sign #4: Making Up Crazy Excuses
My final sign of that we are in bubble territory is when the folks who consider it their job to make sense of the high and spiking prices offer up thin, sometimes stretched-to-the-breaking-point, rationalizations for why the current price action make sense.
In the late 1990s, when the third most recent Fed bubble was cooking along, stratospherically valued technology shares were justified with strange metrics such as 'impressions' and 'eyeballs' and other contorted valuations contained in no standard finance methodologies.
In the 2000s, when the second most recent Fed bubble was cooking along, housing prices were justified with trite slogans such as "they're not making any more land, you know" and bizarro claims that housing had never gone down in price over time – which it most certainly had.
Today is no different. We're seeing the same sorts of 'explanations' to justify high prices fueled by central bank printing. Perhaps the central cheerleader for the benefits of perpetuating central banking policy errors is Paul Krugman, who recently swept aside arguments for an equity bubble by saying something that Irving Fisher might recognize:
O.K., what about stocks? Major stock indexes are now higher than they were at the end of the 1990s, which can sound ominous. It sounds a lot less ominous, however, when you learn that corporate profits— which are, after all, what stocks are shares in — are more than two-and-a-half times higher than they were when the 1990s bubble burst.
Also, with bond yields so low, you would expect investors to move into stocks, driving their prices higher.
(Source)
This sounds reasonable until you consider the context of this argument about corporate profits, of which an economist like Krugman ought to be fully aware. Corporate profits are in very, very unusual territory (one could even say record territory), and to say that equities are fairly valued now because of their relationship to corporate profits is to argue that such profitability is a new and permanent feature of life.
The economist Irving Fisher somewhat famously and regrettably opined in 1929 (right before the stock market crashed) that a new corporate model and economic era was in play that had led to a "permanent plateau of prosperity." The rest is history.
In life and investing, there's nothing quite so powerful as reversion to the mean, which in the case of corporate profits is nearly 50% lower than where they currently are. By the time that economists are dismissing the notion of an equity bubble by pointing out heightened corporate profits, without providing any of the necessary context, we are in full-blown rationalization mode – which is another bubble indicator.
Also, the fact that Mr. Krugman is citing "low bond yields" as a justification for moving into stocks rather delightfully skips over the reality that it is the central banks themselves that are responsible for those low bond yields. Krugman presents the information as if such intervention were a normal market condition to which investors were rationally reacting, rather than a completely fake circumstance engineered by central banks conducting the biggest monetary experiment in human history.
Next, we have this tidy explanation from Goldman Sachs, groping for reasons to explain why stocks always seem to go up no matter what:
"while equity prices respond more to dovish surprises than hawkish surprises, the results suggest that equity prices typically go up regardless of whether the Fed policy surprise is positive or negative (“good news is good for equities, and bad news is good for equities”). But it is not at all clear why the equity market should systematically buy into this pattern."
This is at least as honest an appraisal of the situation as I can find. Goldman Sachs is basically waving its hands in the air and saying that it's somewhat puzzling why markets should be acting this way. An even more honest statement would continue by noting that such periods of irrational exuberance are quite often found during bubbles, and that bubbles have a bad habit of destroying wealth.
As is common in life, such justifications merely expose the 'human factor' of bubbles. Bubbles require a belief system to be installed in the beholder, and two things that beliefs are exceptionally good at are gathering supporting data and rejecting contradictory data (if such data is even seen in the first place).
The human mind does this all the time with respect to our own level of ability, our luck, our good looks, our children's performance – you name it – this is just part of our innate mental programming.
The really odd part in this story is that once upon a time, bubbles were separated by a generation or more, so that the lessons (and pain) of the prior one could be culturally forgotten before the next one could take hold. Yet here we are, working on our third bubble in a row – larger than the prior two that just happened within the past 15 years. (Of course, with a wide enough lens, we might say that each bubble was just a subset of the largest credit bubble in all of history that began building some 40 years ago).
For some reason, we are forgetting the lessons of the past faster than ever before. Such willful ignorance invites a series of reality-based reversions more punishing than ever before, too.
My advice: Keep a journal. These are interesting times; possibly not to be repeated in many, many generations.
Conclusion to Part I
There are abundant signs that the world's equity and bond markets are ignoring risk and chasing yield to dangerous extremes. Various denials and justifications are being offered to rationalize these behaviors as sensible or prudent. Taken together, this tells me we are once again in bubble territory, and that, as with all bubbles, this one will end badly. Or rather, these bubbles (plural) will end badly together.
I'm sure that most market participants have it in their minds to dance as long as the music is playing and to be among the first to reach the exits when the music stops. However, everybody is thinking this, and given that only the most well-connected of market players have the opportunity to exit first (literally in the blink of an eye), very few will actually make it through the doorway unscathed.
As is always true in life, the point of a bubble is to separate the most people from the most wealth. The wealth doesn't actually vanish; it's just simply transferred from the last purchasers to those who sold before the bursting.
I truly have no idea how much longer all this craziness can continue. I suspect the answer is a lot longer than anybody suspects, myself included. But I also know that reversals tend to happen quite quickly, all on their own, with very little warning. This leads to my personal motto: I'd rather be a year early than a day late.
In Part II: Protect Your Wealth in Advance of the Bubble's Bursting, we detail our rationale that all this ends in a wrenching market crash (Phase I), which will be followed by even larger, more desperate, and unusual central bank actions (Phase II) that will initially set the stage for what seems like a recovery but ultimately terminates in the largest currency crisis of modern times, if not human history (Phase III).
The difficulty will be avoiding being whipsawed throughout, losing wealth at every step. After all, the primary outcome of every attempt at money printing in the past has been a massive wealth transfer from a very large proportion of the afflicted society to a much smaller one.
Click here to access Part II of this report (free executive summary; enrollment required for full access).
In the meantime, trade safe. My advice here is to use extreme caution whether investing or speculating, whichever you are involved in.
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are these the same bubbles that Buffett blew out in the bath tub with Becky?
I think Becky was the one blowing........er.....nevermind.
Is this a dagger which I see before me, The handle toward my hand?
Macbeth.
Warren loves Becky Quickie.
Could of said this in the late 90's too. Its all good, til ain't no more.
WIsh we could burst the unemployment bubble.
This article was one of the most articulate in its takedown of Paul "I Deny Reality with Sprinkle Half-Truthes" Krugman and I have read many of the takedowns of the dishelved shell of a man.
So when this does go belly up, I wonder if Obama will know anything about it.
it will be a geo-political indicator that foreshadows the collapse and will be the smoke screen through which the fan will be turned on, making the shit hitting your face harder to see until you feel its moisty presence
subterfuge by centrifuge, until the power goes out
So you are saying there is hope then? Nice.
in a nope, kinda.. cup your balls way
edit: POTUS has about as much knowledge of what's really going on as a hot dog vendor at a baseball game knows the score, he may have it out of the corner of his eye but he has no idea who batted the runs in or who's pitching a no hitter, the office is u.s.e.l.e.s.s <has been now for d.e.c.a.d.e.s>
Shit that guy is so confused he doesn't even know his sexual orientation.
If they don't tell him, he is absolved of any responsibility, right? I finally understand- Obama is a mushroom!! Keep him in the dark, and feed him shit.
"I wonder if Obama will know anything about it."
Only if someone makes a YouTube video about it.
So when this does go belly up, I wonder if Obama will know anything about it.
He will see it onT.V.
I am always amazed that we must look for signs for what to some is blatantly obvious.
<Greed blinds the already brain dead.>
Blatantly obvious, and exceptionally scary. The underlying economy is far more fragile than it was in 2008. When these bubbles pop, we are going to be helpless to escape their wrath. All the tools have been used to defer the inevitable: we're going to hit some kind of generational reset button next, and have to sort-out new ways of running nearly everything.
I, for one, can't wait for the return of actual markets, where prices reflect true value, where supply and demand are allowed to work, where wealth is tied to the degree of value added, and where work is rewarded.
The underlying economy is far more fragile than it was in 2008
much like coming out of hospital with casts for two broken arms and two broken legs only to get hit by the bus as you step off the curb. it may not kill you but you're pretty much a shit stain from that point on.
I, for one, can't wait for the return of actual markets, where prices reflect true value, where supply and demand are allowed to work, where wealth is tied to the degree of value added, and where work is rewarded.
Until we get an honest government(best of ruck w/that), and rid of algos running amuck in the markets it will never happen.
the market will be trading in goats and fur skins when that happens but keep waiting it won't be long
"and there is not limit to that greed." Names are needed...not charts or graphs...as good as this article is...and it is outstanding. WHO is doing this? then your on the path to TRULY "figuring out the WTF."
I am always amazed that we must look for signs for what to some is blatantly obvious.
It's only obvious to those whose don't have the job of seeing it, or at least to be objective. When one's livelihood depends upon not seeing the obvious, one must make up "facts" to fit the scenario. The human mind, like Nature, abhors a vacuum. Where there is a paucity of so-called evidence, it must be fabricated to fill the void.
Big bubbles,big troubles.
It all becomes clear when you understand that those making the policy decisions are ego driven psychopaths who think that they are doing God's work.
and when you understand that they believe that they themselves are God.
You're both right actually.
They are Luciferian for the most part, some are humanist. They believe God hid knowledge from Adam and Eve that would allow them to become gods themselves and locked them in the garden of eden never to learn of this knowledge. They believe their god Lucifer (the snake) gave Adam and Eve the ability to learn this knowledge by way of the apple of knowledge for which they were expelled for eating from their garden prison.
I think William Cooper explains it best here in this lecture:
http://www.youtube.com/watch?v=x_A4fBSroiE
What the bloody hell are you rabbiting on about, lucifer, snakes, apples?
William Cooper, the guy who actually predicted 9/11, and got killed for it. Replaced by looney toon Alex Jones who has lived far too long not to be controlled opposition.
Spot on Thunder Child. These people are doing their god's work, the god they trust in atop the pyramid on their usurious money. Knowledge is power, and the illuminated ones can wield it in this plane, but only against the lost. The saved need not worry. After all, when the father of lies is the one revealing their truths it's a double edged sword, a poisonous cure for the snake oil salesmen getting a taste of their own medicine.
personally I'm going with Bass's interpretation of the end of a 70 year debt supercycle. It keeps the Leprechauns out of the discussion. This is simply an Oligarchian inspired slow burn to the bottom as they've calculated the end point based on R.E.S.O.U.R.C.E.S and their F.I.N.I.T.E nature. We are in the pause when "growth" converts to "decline" and the Oligarchian capture of the remaining resources begins to play out across the globe.
The Nikki chart that makes me LOL! on a daily basis is http://finviz.com/futures_charts.ashx?t=NKD&p=w1
Why no article on the NAR advert today?
For some reason, bubbles escape detection by two groups; the center mass of society and those benefitting from the bubble gains.
The former loses greatly, the latter benefits enormously. I get the self-interest part so the benefitters make sense, but I puzzle over the center mass.
Stockholm syndrome? An innate desire to be fleeced? What is it?
Its called the MSM dude. Center mass is impacted by the same people who own MSM and the Debt.
But don't forget MSM is losing its luster for many. MSNBC shows can barely register 100,000 for any of their drivel shows. There is hope....not that horseshit hope Obama promised though, but a real hope for a generation to finally peak behind the current as many of us have.
Remember, the masses are asses. They rely upon trust in the form of false authority syndrome, as well as not wanting to fall victim to their own imposter syndrome. So, they follow where lead, as they know nothing better.
Its actually evenmore than that (but I +ed you anyways for the false authority syndrome). People don't know how to manage their checking accounts. So, they take what their mutual fund advisor as absolute truth, depite the fact that these people know even LESS than the client knows, since they will argue forever and a day that unless the client's money is in the market then this is "dumb" thing to do. Not long ago I went with my wife to help her put some financial affairs in order with her advisor at the bank. The long and short of it is, they are fucking pinheads, and they influence the client, not by sound economic analysis, but, by intimidating them with what the client does not know. So, I let the "lecture" go on for about 20 minutes, and then I started - ok my turn bitch. What is the ocmposition of this fund? What are its core holdings? What is the basis of these holdings and are they adjusted? Can you tell me what the current average P/E is for the core holdings? What is the yield to the core's asset value? etc etc etc. She looked at me like she just hsit her pants and wondering if I could tell. But you're right. they dont know any better.
Brings back a memory of something I heard in a Coffee one day back in 09. A guy was looking at the crash there on the MSM TV tape. I asked him if he was in stocks. He said no, he was not in the markets, he was in Mutual Funds. Asked if he was in equity or security funds. He asked "what are those?"
I work with a young gal in her early-mid 20's. Somehow we got to talking about investing/401K's, so I mentioned index funds (I am a phys gold holder and not in the markets, but I thought better than to get into all that). She looked at me with a blank stare. So I said "you know, an index fund, it tracks the Dow Jones average, you've heard about that right?" Again, a blank stare. THIS is what we're dealing with.
infinite non sellers .
I think the masses do know that something is seriously wrong.
But they don't know what, or what to do about it. Most of the people alive in today's Western developed countries were born and grew up during relatively peaceful and prosperous times.
Most of them lack firsthand familiarity with bad shit on mass scale. Of course, most people have experienced bad shit on a personal scale, but that's not at all the same thing. The response mechanisms needed to successfully cope with personal and individual bad shit are different from those needed to cope with social and political bad shit.
That leaves each of them trying to figure out his or her own individual escape from what is actually a collective set of problems. They're trying to cope with massive bad shit in the political economy with the mechanisms they use for coping with their personal bad shit.
Seeking an individual escape or solution makes them vulnerable to the siren songs of their doc, their shrink, or their "investment advisor." They watch "The Secret" and think they can visualize their way out of bad shit.
The masses are not stupid. They just don't know what the hell has been hitting them, and they have not yet begun a coordinated response equivalent in mass scale to the problems confronting them.
But that's okay. Political entrepreneurs will eventually appear on the scene ready to satisfy mass market demand for revolutionary political products and services!
Our mandated education system is not good at teaching people to think independantly but it is good at vaccination. The masses have been vaccinated against "conspiracy" thinking. They still beleive in the American Dream where suburbs make sense, 401(k)s are for US equities and bonds (which will be plump at retirement LOL), banks are community oriented and not self serving owners of the Fed. and the main stream media is there to inform them with verifiable facts. "An innate desire to be fleeced?" The "center mass" is a flock of sheep which may not have an innate desire to be fleeced but at least is willing to be corraled into FEMA camps so that the fleecing can be performed.
Lawrence Welk loved bubbles...
The Fed Punchbowl is gone and the Pollyanna Party is O-VER!
Gee, how sad! Now, Wall St may have to WORK for a living!
ZH is not the place to be when a bubble begins, unfortunately. Nice to have been here after it pops, though.
Why not? Unless you have money you're not willing to lose permanently then you shouldn't be in this market. When this one blows there will be no escaping because thousands of points will be vaporized in seconds.
The shit that Nanex has exposed with regard to millisecond algo trading should be enough to scare sane people away from the "market."
At this point, people still participating are showing off their fabulous wealth, demonstrating their incredible stupidity, or flaunting their gambling addiction. Some people are doing all three.
When this comes down TPTB aren't going to let the "common man" escape with any wealth. The insiders are getting out now. When they pull the plug the man on the street will be staring dumbfounded at the teevee waiting for it to tell him what to think.
Things heating up and it looks like Michelle wants out of the kitchen for a bit: http://www.whitehousedossier.com/2013/05/22/michelle-extended-vacation/
Better not make it too long or Reggie will change the drapes.
"Oh, no he didn't!"
In other news, Wikipedia describes Reggie as a "Body Man" for the prez, and lists his position as "Wide Receiver."
LOLZ
PPPPPPOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOFFFFFFFFFFFFFF!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Oh shit Bernank what happened wheels fell off?
"While I think central banks are populated by earnest people with impressive credentials who have rationalized their actions as being necessary and in service of the greater good, I also think that the biggest ones hold an entrenched set of institutional views that are dogmatic, fail to incorporate the idea of economic and resource limits, and are seemingly immune to healthy introspection."
Sociopaths are always immune to healthy introspection. Question is - will they be held responsible for their actions / results?
Bubblicious
Bubble Yum
Dubble Bubble
Hubba Bubba
Saddening is the fact that commodity prices are still way high. Even if the economy picks up any at all, it will immediately revert to zero growth within just a month or two. This is the global path of future growth for the next 20-30 yrs.
Most commodities are coming out of the ground barely for much above the cost of production. Don't know how you can say, "commodity prices are high". Much lower, and production will dissappear in most cases.e
High on the consumer side, not producer side...
And how do you know that the producers of those commodities didn't sell forward their production? They may very well have sold years worth of production at higher prices than what are currently being paid. It is what the original intent of futures contracts were all about.
naaa, many sold silver at 4 to SLW.
No bubble, no one is talking about buying stock at work, no one. Last bubble folks on assembly line were talking about how good thier 401Ks are.
This is confined to robots and banks.
You do not need JQ Public to participate in order to have a bubble. Look at housing... I live in Brooklyn and the REITs, HFs and International HNW crowd are buying up apartment buildings, renovating and jacking rents up by 2x / 3x and the working class is getting pushed further out of the city or living 2 familys to a flat. This is not sustainable and the bubble will burst, but not because the public decided to join in the madness. These buildings are being laundered bought with cash and JQ Public can't get a mortgage because banks can get more leverage with QE in the derivative / equity markets.
duplicate
Good thing is the bigger the bubble blows the bigger the pop. I have 20 somethings tell me their fully invested.
The same ones going out and buying re-bubblized houses again.
Snipes: We're safe around here.
Connery: You call this safe?
Snipes: Rough neighborhoods may be America's last advantage.
The cure for high (asset) prices is..... High prices. Watch out!
Margin Call Gentlemen...
Make no mistake to think that the Fed is not aware of its effect on asset pricing and bubbles. Out of the 500 PhDs that work at the Fed, some of them are reading this site for insights into public opinion.
you mean the tin foil <public> opinion
oh goodie...maybe they will read this:
GO FUCK YOURSELF (SELVES)......you are not as smart as you think you are.
isn't a PhD in econonimcs equivalent to like a 2 year technical degree...ie. plumbing, electrical, welding, etc??
Dunno, but the two charts there under number 3 look more to me like a projected 50% Yen devaluation, than a stock bubble.
The thing I wonder about Japanese stocks is that a lot of the big ones have been moving their money out of Japan either for cheaper labor or market penetration. Japanese auto makers have increased their investments in the US for example. So will this rise in their stock price in effect cause an increased flow of money out of Japan and cause deflation in the home islands?
Not that I give a darn anymore. A gold standard monetary has problems but it seems to be a lot less damaging than politically controlled fiat currency. Kind of like that Churchill quote, "A representative democracy is a bad form of government but it is better than the others."
See the alternative MacBeth now playoing on Broadway, http://www.macbethonbroadway.com/about.html
..... much m0ore applicable to the situation.
Don't call them "junk bonds." Call them "unbundled" or "unpackaged."
Great interview from Mar 30, 2013:
David Stockman: We've Been Lied To, Robbed, And Mislead
http://www.youtube.com/watch?v=Zi1g_PmtQHA
Mistakes are never learned and often repeated.
Intresting quote by the author of the piece. "I'd rather be a year early than a day late" But if you are putting in a crop on th farm or a garden, it is the exact opposite. "I'd rather be a week late than an hour early when planting." Milestones