This page has been archived and commenting is disabled.

Jeremy Grantham On Timing Bear Markets: 25% Upside Left And Then The Bust "We All Deserve"

Tyler Durden's picture





 

From Jeremy Grantham of GMO

Timing Bear Markets

My personal view is that the Greenspan-Bernanke regime of excessive stimulus, now administered by Yellen, will proceed as usual, and that the path of least resistance, for the market will be up. I believe that it would take a severe economic shock to outweigh the effect of the Fed’s relentless pushing of the market. Look at the market’s continued advance despite almost universal disappointment in economic growth. Exhibit 3 shows the economic forecasts for major economic countries made a year ago by the IMF compared to what actually happened. Only Japan was a modest pleasant surprise at 0.7% ahead of forecast and the U.K. and Switzerland scraped home by the skin of their teeth. Everyone else fell short. There have been few such occasions when such broad disappointment with economic growth still allowed the U.S. and most other major economies to make material upward moves in their stock markets. It is yet another testimonial to the global reach of the Fed’s stimulus of equities (as was the very substantial decline in emerging market equities on just talk of tapering!)

In equities there are few signs yet of a traditional bubble. In the U.S. individuals are not yet consistent buyers of mutual funds. Over lunch I am still looking at Patriots’ highlights and not the CNBC talking heads recommending Pumatech or whatever they were in 1999. There are no wonderful and infl uential theories as to why the P/E structure should be much higher today as there were in Japan in 1989 or in the U.S. in 2000, with Greenspan’s theory of the internet driving away the dark clouds of ignorance and ushering in an era of permanently higher P/Es. (There is only Jeremy Siegel doing his usual, apparently inexhaustible thing of explaining why the market is actually cheap: in 2000 we tangled over the market’s P/E of 30 to 35, which, with arcane and ingenious adjustments, for him did not portend disaster. This time it is unprecedented margins, usually the most dependably mean reverting of all fi nancial series, which are apparently now normal.) By June this year, markets felt relatively quiet and under the surface there was still a considerable undertow of risk aversion in the institutions. The Russell 2000 and the GMO High Quality universe were both just level with the S&P, all up 16%. Normally we would have expected the Russell to outperform handsomely. However, since then speculation has perked up so that today, the broad U.S. market is up 20% and the Russell 2000 is a more typical six points ahead while stocks in the GMO High Quality universe are several points behind. We have also had a sharp and unexpected uptick in parts of the IPO market in the U.S., so I would think that we are probably in the slow build-up to something interesting – a badly overpriced market and bubble conditions.

My personal guess is that the U.S. market, especially the non-blue chips, will work its way higher, perhaps by 20% to 30% in the next year or, more likely, two years, with the rest of the world including emerging market equities covering even more ground in at least a partial catch-up. And then we will have the third in the series of serious market busts since 1999 and presumably Greenspan, Bernanke, Yellen, et al. will rest happy, for surely they must expect something like this outcome given their experience. And we the people, of course, will get what we deserve. We acclaimed the original perpetrator of this ill-fated plan – Greenspan – to be the great Maestro, in a general orgy of boot licking. His faithful acolyte, Bernanke, was reappointed by a democratic president and generally lauded for doing (I admit) a perfectly serviceable job of rallying the troops in a crash that absolutely would not have occurred without the dangerous experiments in deregulation and no regulation (of the subprime instruments, for example) of his and his predecessor’s policy. At this rate, one day we will praise Yellen (or a similar successor) for helping out adequately in the wreckage of the next utterly unnecessary financial and asset class failure. Deregulation was eventually a disappointment even to Greenspan, shocked at the bad behavior of fi nancial leaders who, incomprehensibly to him, were not even attempting to maximize long-term risk-adjusted profits. Indeed, instead of the “price discovery” so central to modern economic theory we had “greed discovery.”

(Memo: “price discovery” is the process that happens in an open and competitive and unregulated market, where the interplay of supply, demand, and cost structures determines the effi cient price. “Greed discovery” is the process by which a vastly and unnecessarily complicated fi nancial system is exploited by expert insiders. These insiders have far more knowledge than the lambs – formerly known as clients – and without adequate regulations the lambs are defleeced in a surge of “rent seeking.”)

In the meantime investors should be aware that the U.S. market is already badly overpriced – indeed, we believe it is priced to deliver negative real returns over seven years – and that most foreign markets having moved up rapidly this summer are also overpriced but less so. In our view, prudent investors should already be reducing their equity bets and their risk level in general. One of the more painful lessons in investing is that the prudent investor (or “value investor” if you prefer) almost invariably must forego plenty of fun at the top end of markets. This market is already no exception, but speculation can hurt prudence much more and probably will. Ah, that’s life. And with a Fed like ours it’s probably what we deserve.

Inconvenient Conclusion

Be prudent and you’ll probably forego gains. Be risky and you’ll probably make some more money, but you may be bushwhacked and, if you are, your excuses will look thin. Your call. We of course are making our call.

Postscript 1

What can go wrong for the market? There is a slow and for me rather sinister slowing down of economic growth, most obviously in Europe but also globally, that could at worst overwhelm even the Fed. The general lack of fiscal stimulus globally and the almost precipitous decline in the U.S. Federal deficit in particular do not help. What are the odds in the next two years? Perhaps one in four.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 11/19/2013 - 22:35 | Link to Comment DirkDiggler11
DirkDiggler11's picture

One in 4, hence 25% chance of a market crash over the next two years ? With those odds why wouldn't you go full retard and put every dime you can scrape up and go long the market ? You have a 25% chance of it blowing up in your face! and a 75% chance of making gains that at least keep you in check with inflation.

What a fucked up world we are living in ...

Tue, 11/19/2013 - 22:45 | Link to Comment carlin401
carlin401's picture

That's right, ...

Since the 1970's the rule has been if the FED lowers interest rates, ... the market goes up,

Yellen has promised 'negative interest' rates,

Thus the market will go up,

Logical? Fuck no,... but nobody ever said the USA was not a nation of fucking hair-lips, like PT BARNUM said "Never underestimate the stupidity of the US public"

Will it blow? Who gives a fuck, just stay far away from the USA, cuz the GUBMINT is going to have to rob everyone with a 'stash' of any kind, to keep the 80% on the DOLE voting.

Tue, 11/19/2013 - 22:56 | Link to Comment Chris Jusset
Chris Jusset's picture

"And then we will have the third in the series of serious market busts since 1999 and presumably Greenspan, Bernanke, Yellen, et al. will rest happy, for surely they must expect something like this outcome given their experience."

 

The central bankers know that this mega-bubble will eventually bust ... so they're already planning their bubble-cleanup strategies for when the bubbles pop in 2014-15.  Will they respond by blowing yet another mega-bubble after this one pops?  Stay tuned!

Tue, 11/19/2013 - 23:02 | Link to Comment mvsjcl
mvsjcl's picture

Who the fuck is this "we" he keeps writing about? You? Me?

 

No damn "we" there.

Wed, 11/20/2013 - 08:16 | Link to Comment markmotive
markmotive's picture

Eat it while it's hot.

Like lemmings walking down a path decorated with flowers and shiny things, ultimately leading to a cliff engineered by our dear leaders.

http://www.planbeconomics.com/2013/10/a-crash-caused-by-excess-debt-wash...

Tue, 11/19/2013 - 23:11 | Link to Comment carlin401
carlin401's picture

There is only one game these monkey's know.

It's a given there is NO buyer for US DEBT other than QE, ... so it cannot end.

There is nobody advocating 'austerity', its all 100% krugman now, we'll print our way to permanent utopia.

All has been telegraphed, ... interest rates will go up, and QE will go up to cover the cost of debt service.

BTC will go up, cuz all that social-media ( NSA SPY ) money has to go somewhere, and these kids are too fucking dumb to buy land or gold, like the chinese.

Wed, 11/20/2013 - 09:08 | Link to Comment Keyser
Keyser's picture

The time for acting to correct the ship has long past. It is now about avoiding blame when the collapse happens. At least the Russians have run the numbers. The gig is up in 2017 according to their statistics as this will be when the debasement of the USD, coupled with increase in bonds rates will cause the US to default. 

Tue, 11/19/2013 - 22:54 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

If you want to go full retard, go buy bitcoins!@# Or get free ones. Bitcoin hourly free payout went back up after being lowered at http://freebitco.in/?r=25727 . Stupid volatility.

Wed, 11/20/2013 - 05:20 | Link to Comment zhandax
zhandax's picture
Or if you don't want to go full retard, buy Spoos at 2:30, sell MOC and buy gold.  Kick the gold just before comex open.  Bitcoin thanks are accepted.
Tue, 11/19/2013 - 23:09 | Link to Comment wee-weed up
wee-weed up's picture

 

 

25% upside left?

Methinks he misplaced a decimal point...

2.5%

Wed, 11/20/2013 - 00:26 | Link to Comment aVileRat
aVileRat's picture

Yup.

Like Fink, Ichan, Buffet, a smattering of ex-Dallas & now IMF whiz kids have said this is now the grim truth. Even if you bend your advanced AK Model right to be limit, 1850/1900 is the top even using the Fed's own model before that alpha flag effect starts going negative and we enter the 'pushing on a string' adventure. So while Yellin may claim she has 4000 points of runway left, the reality is that the equiv. of 1 QUARTER ramp has to last at least 1 year. Those points need to be rationed and if the market starts to price in 2017 growth, then we are pretty much in the dead zero of 1973 era hopium. That is hard economic history talking, no macro econ or quant jock can spin that truth away. 

Lets think about that. Ever seen that cartoon of Donald Duck in the great depression and he is slicing the pea until it is transparent ? Yeah, if your a mega-fund (or work at a mega-fund) suddenly those peas are looking pretty wafer thin. To put that into context for the MOMO; that would put Apple, at its current market cap and index weighting at a target price of 628/sh. Not even the high water mark and that is the bluesky estimate assuming the earnings are not revised downards on bad Holiday Sales. Great return on paper, but then adjust for the foreign sales currency effect for next years full-year QE. Now increase I-WACC for the 5% inflation and put the risk free rate at the long-term rate of 3.2%, that 628? Not looking so good now.

No way bond funds and pensions can work on yields of 1 to 1.8% front curve. Two things need to happen either 1.) Everyone into the growth + yield pool and equities go up another 25%. Maybe this IS the plan, everyone becomes bullish on the USA (and world) recovery, or 2.) The bond market pulls an OPEC. It's happened before, just not on this scale, but then again Keynes was all about going out like a rock star. Eventually Bill Gross is going to have to ask himself, like every other bond fund out there. What is the reputation cost of capital that is being brought onto his fund and legacy by keeping the "string" taught. ? I am going to bet this will be the tequilla shot topic of this Davos.

 

Wed, 11/20/2013 - 01:18 | Link to Comment whirlaway
whirlaway's picture

If we were to really go up 20 or 30 percent from here it is more likely
To happen in 3-6 months rather than 1-2 years

Wed, 11/20/2013 - 06:29 | Link to Comment HardAssets
HardAssets's picture

That's why I no longer waste money on financial newsletters. This guy's 'personal guess' is that the stock market will rise 20-30% within one or two years and then crash. Based on what metric and what theory ?

He thinks the market is over-bought.  So what, a lot of people think that, including those who think there's few other ways to make any returns.

Its very possible that 'someday' a lotta people will be 'caught by surprise'.  Why ?  Because they thought they or some 'market expert' can predict the future.  I can make my own 'personal guess' and not pay a dime for it.

Wed, 11/20/2013 - 01:53 | Link to Comment monkeyboy
monkeyboy's picture

Ah fuck it!

It's a good time as any to go all in.

Tue, 11/19/2013 - 22:36 | Link to Comment Its Only Rock N Roll
Its Only Rock N Roll's picture

J. Grantham, whom I have the utmost respect for...sounds like a very frustrated bear.

Tue, 11/19/2013 - 22:42 | Link to Comment fonzannoon
fonzannoon's picture

It makes me happy when people call a spade a spade. Nice job it's only rock and roll.

Tue, 11/19/2013 - 22:54 | Link to Comment Its Only Rock N Roll
Its Only Rock N Roll's picture

I read the entire report earlier today which this is taken from.  It was far from bullish.  This same article/post was called "Jeremy Grantham's Bullish Two Year Outlook" over at Barrons today, which is the furthest thing from the truth, as is the 25% upside left referenced here.  GMO went through a painstaking reevaluation of their valuation methodolgy and raised their fair value of the S&P from 1020 to 1100.  1100 will probably be a stopping point for the market when it travels below fair value someday.  They are the furthest from bullish and IMO this was Jeremy "capitulating" to the fact this nonsense can continue further.  Right or wrong he has NEVER put a % upside gain on the market in writing...at least that I have read over the past 10+ years.  Which makes the timing of this interesting to me.

Barrons:

http://online.barrons.com/article/SB500014240531119042534045792077938091...

 

 

Tue, 11/19/2013 - 23:10 | Link to Comment fonzannoon
fonzannoon's picture

Well for what it's worth I think he is wrong with his fair value view. It's over man. There is no downside target anymore. The reset number is Zero. We will spend the next phase watching more and more people close their eyes and jump (into the market). They will be rewarded. Everyone else will slowly drown fighting this and sticking with their morals. Maybe a few will truly get off the grid and find happiness in solitude, but that is rough. But when the day comes that this thing actually goes off the rails just kiss it goodbye. I don't think I will see a market that represents reality again. 

We talk about the market on here like you try to talk some sense into your buddy who is trashed at the bachelor party. You just want him to come home with you and start over tomorrow. Except this time he killed the hooker and she is in your trunk and you missed your chance to get the fuck outta there. Now we are all in.

 

Tue, 11/19/2013 - 23:30 | Link to Comment Its Only Rock N Roll
Its Only Rock N Roll's picture

You are right, the market as we know it is dead.  However I think the market we knew has never been real to start with.  I have been around 20+ years most of which have been spent either building or the bursting of an unsustainable bubble.  What will remain after all is said and done will be some system of monetary exchange and claims to underlying assets.  How that will look is unknown, but I plan on trying to be around to see what it looks like and how I may participate.  I don't believe in the mad max outcome and I belive there will be some sort of rule of law.  The fourth turning will come and go.

It sounds like you need to read "Francisco's Money Speech".  Always gets me to think about what may come....

http://capitalismmagazine.com/2002/08/franciscos-money-speech/

Love your analogy.  Since I quit drinking years ago I don't have to worry about the dead hooker in the trunk of my car anymore....but before I quit I worried about that alot. 

 

Tue, 11/19/2013 - 23:37 | Link to Comment fonzannoon
fonzannoon's picture

I've read it, and I do agree that this will come and go. I also want to be standing when it does.

Wed, 11/20/2013 - 00:10 | Link to Comment aVileRat
aVileRat's picture

No question players will be standing, the big question is the quality of the assets and how the system resets. Plenty of people were left standing in the wake of the USSR, but they noticed, like Weinmar Republic that the consumer discretionary and medical services started going for 10 oz. a medical visit, the stockpiles went to zero fast.

 

Wed, 11/20/2013 - 00:31 | Link to Comment Freddie
Freddie's picture

GMO and Grantham have my respect along with only a few others like Dalio, Kyle Bass, Chanos, Hendry.  I think they know it's over as well but they cannot say it.  Ray Dalio keeps talking about fixing the machine.  I think he means well but the machine is f'ed'ed.

Wed, 11/20/2013 - 07:59 | Link to Comment HardAssets
HardAssets's picture

<mostly deleted my post - nothing new - same ole, same ole - - -" it'll go up till it comes down, and it might come down like Black Monday - right after I go in heavier, no doubt "

Tue, 11/19/2013 - 22:36 | Link to Comment Eireann go Brach
Eireann go Brach's picture

If there is any justice in the world, and I believe there is, the whole house of cards will crash and crumble before Obama leaves office, to cement what the history books will show as the worst presidency of all time!

Tue, 11/19/2013 - 23:05 | Link to Comment Imminent Crucible
Imminent Crucible's picture

"will crash and crumble before Obama leaves office"

That would be both convenient and pleasant to behold, but it's not the way the world usually works. More often, the worst scoundrels get by with their crimes long enough to clear the country and retire in comfort out of reach of the ruined, jobless, raging masses who once adored them. Or sometimes, like Hugo "Parachute Woman" Chavez, they escape their just deserts by the cowardly expedient of dying before the crap hits the fan.

On the other hand, pretty much nothing is working the way it usually works any more.  So, just maybe, a giant flaming meteorite will strike the White House, the Capitol Building and all the regulatory agencies and most especially, the Marriner Eccles building just as unemployment reaches 100%, the Dow slips below 100 and the National Security Agency is destroyed by a controlled demolition at the same moment a Dreamliner loaded with Iranian central bankers flies into Langley.

Edit: Did you mean "last presidency of all time"?

Wed, 11/20/2013 - 00:23 | Link to Comment bobert
bobert's picture

Your sense of humor is appreciated.

Wed, 11/20/2013 - 07:54 | Link to Comment HardAssets
HardAssets's picture

A driver was stuck in a traffic jam on the highway outside Washington, DC. Nothing was moving. Suddenly, a man knocked on the window.
The driver rolled down the window and asked, "What's going on?"

"Terrorists have kidnapped the entire US Congress, and they're asking for a $100 million dollar ransom. Otherwise, they are going to douse them all in gasoline and set them on fire. We are going from car to car, collecting donations."

"How much is everyone giving, on an average?" the driver asked.

"About a gallon."

Wed, 11/20/2013 - 09:19 | Link to Comment pavman
pavman's picture

Well duh this has nothing to do with Obama, everyone knows its all Bush's fault!

Tue, 11/19/2013 - 22:38 | Link to Comment Son of Captain Nemo
Son of Captain Nemo's picture

He's dropping acid if he thinks it will take that long.

He left out the part about the next World War that will be taking place during this "25% upside".

Wed, 11/20/2013 - 07:11 | Link to Comment SunRise
SunRise's picture

Oh it's just a world war?  BULLISH!

Tue, 11/19/2013 - 22:43 | Link to Comment NoDebt
NoDebt's picture

OK, as much as I agree emotionally, I gotta ask:  overpriced relative to what?  Name the thing that ISN'T overpriced.

First person who says 'gold' (or any suitably real store of value) gets a cookie.

The entire universe of asset classes have all been driven higher to one degree or another by 30 years of constantly falling interest rates, ever-increasing government deficit spending and ever larger central bank liquidity injections.  If that ever stops (and it won't anytime soon) EVERYTHING goes down.

Tue, 11/19/2013 - 22:51 | Link to Comment Imminent Crucible
Imminent Crucible's picture

"Name the thing that ISN'T overpriced."

Integrity in high office is, I believe, at or below fair value at the moment.

Tue, 11/19/2013 - 23:07 | Link to Comment NoDebt
NoDebt's picture

Touche.  But I can't find an ETF that tracks that asset class.  If I could, I'd still short the hell out of it.

Tue, 11/19/2013 - 22:40 | Link to Comment zapdude
zapdude's picture

The bankers will one day be hunted again...

For honor and for riches
I've labored long and hard for the bread
but on my corns too long you tread
you fine haired sons of bitches

-- Black Bart, reknowned Wells Fargo stagecoach bandit

Tue, 11/19/2013 - 22:41 | Link to Comment Uber Vandal
Uber Vandal's picture

I am not part of WE, thank you very much.

 

 

Tue, 11/19/2013 - 22:41 | Link to Comment DOGGONE
DOGGONE's picture

Hey, hey, what do you say -- tell the fucking TRUTH!
http://patrick.net/forum/?p=1230886

Tue, 11/19/2013 - 22:41 | Link to Comment carlin401
carlin401's picture

History of the FED show's that so long as they 'stimulate' that the party goes on.

"Don't Fight the Fed"

That rule hasn't changed,

The rePug's with the their message of 'austerity' is KAPOOT,

SO Yellen will send QE 85 to 105, to 850 sky's the limit, and so long as the USA has the MIL power to back it all up, the world will slop it up, and in a generation, folks will not even remember these times.

Tue, 11/19/2013 - 22:53 | Link to Comment Imminent Crucible
Imminent Crucible's picture

And how will the USA be paying for all that big MIL power once Yellen has driven the FRN to intrinsic value?  In a generation, we'll be lucky if there ARE any folks to remember these times.

Tue, 11/19/2013 - 23:02 | Link to Comment carlin401
carlin401's picture

The US MIL already has the largest strategic petro reserves on earth, and coal,

You should go find online "US mil strategic energy reserve plan, 2050', ... never fear that the US MIL hasn't planned this out way into the future,

Being the biggest user of portable energe(OIL), and the biggest hoarder, the US MIL is also richest COMPANY in real fucking wealth.

Lastly, don't forget that by 2025 the USA MIL will control all the arab/persian oil, long after israel/usa incinerates that part of the world, the underground oil will be in NWO (TRIBE BUSH) hands.

Tue, 11/19/2013 - 23:01 | Link to Comment carlin401
carlin401's picture

If BTC which is 100% worthless can have a $6Billion USD capitalization, then the USA can print 'funny money' forever and have a zillion quadrillion capitalization, .. why the fuck not?

Blodget just yesterday said he thinks BTC can go to a Million USD, why not?

That's the point here, the world has reached a new level of insanity.

***

The emperor has no clothes, but nobody is listening, and all has been co-opted from FOX to NBC, to ZH.

Tue, 11/19/2013 - 23:07 | Link to Comment fonzannoon
fonzannoon's picture

"That's the point here, the world has reached a new level of insanity"

 

I could not agree moar.

Wed, 11/20/2013 - 07:56 | Link to Comment game theory
game theory's picture

That's where Keynes gets at least one thing right: "the market can stay irrational longer than you can stay solvent."

Tue, 11/19/2013 - 23:08 | Link to Comment Imminent Crucible
Imminent Crucible's picture

"why the fuck not?"

That question should be directed to Rudolf von Havenstein or Gideon Gono. Or any other of the central bankers behind the 60 hyperinflations to date in the modern era.

Wed, 11/20/2013 - 02:31 | Link to Comment Diogenes
Diogenes's picture

Too funny, imaginary money valued in another kind of imaginary money.

Wed, 11/20/2013 - 06:59 | Link to Comment Wahooo
Wahooo's picture

They will have to buy pension funds for the political class to maintain status quo. This thing can go on for a long time.

Tue, 11/19/2013 - 22:43 | Link to Comment ramacers
ramacers's picture

yes, what we deserve. blood, unlike what we ever coiuld've imagined.

Tue, 11/19/2013 - 22:50 | Link to Comment Son of Captain Nemo
Son of Captain Nemo's picture

Well said.

It just goes to show you how the majority of Americans think. 

As long as it's not my house or town getting obliterated by a foreign Army, and I can continue to gamble with everything including my "house" and credit cards with the job(s) I still have -then life is good.

Tue, 11/19/2013 - 23:18 | Link to Comment Imminent Crucible
Imminent Crucible's picture

I don't think Americans are really quite that blasé about it all.  Until recently, my wife worked as a pharmacy clerk at one of the busiest Wal-Mart pharmacies in the country.  She said that it appeared that most of the people who came in were on some kind of psychotropic medication: antidepressants, anti-anxiety, anti-psychotics, etc.

My guess is that people who really feel "Life is Good!" aren't taking handfuls of Klonopin along with their Zoloft and lithium.

I could be wrong, but I suspect that all the credit card overuse is a kind of self-medication.  They don't know what else to do but go shopping, buy something and hope it distracts them for longer than the last iGadget.

Wed, 11/20/2013 - 00:28 | Link to Comment bobert
bobert's picture

Psyclotropics by credit card.

Tue, 11/19/2013 - 22:44 | Link to Comment SpykerSpeed
SpykerSpeed's picture

Ohh yes, the terrors of "deregulation".  If only the government had regulated us more, we wouldn't have had the crash in 2008!

Tue, 11/19/2013 - 22:47 | Link to Comment Dr. Everett V. Scott
Dr. Everett V. Scott's picture

Jeremy Grantham is pretty astute regarding financial markets.  But when he goes astray, like he does with his climate alarmism and in his demonization of "carbon", he's no smarter than the average bear. 

Tue, 11/19/2013 - 22:53 | Link to Comment carlin401
carlin401's picture

Yep,

He should caveat like Rogers and Faber,

"It will go down in the long term, but short term up", "When? I don't know"

Wed, 11/20/2013 - 00:30 | Link to Comment bobert
bobert's picture
  • You've noticed that bs also. I'm constantly amazed by both Rogers and Fabers use of caveats.
Tue, 11/19/2013 - 22:50 | Link to Comment max2205
max2205's picture

I refuse to read this BS... At the lows...at the highs... Nflx bit coin...blah blah blah

25%?... Come on

Tue, 11/19/2013 - 22:51 | Link to Comment carlin401
carlin401's picture

How can it possibly end?

Everybody is making money in the current game?

Funny money for all, so long as the funny money buy's food ( food stamps are accepted ), ... then its all good.

Wall Street run's the nation, and Obama/Yellen/Hillary-Bitch-Clinton, they all are owned by WallSt, and Clinton will be prez in 2016,

Like Faber/Rogers say's "EVERYBODY is doing QE",... its a world fucking party,

Essentially BTC is on QE steroid, given that all the QE money is flowing to BTC. So the 'risk' is equal in all places, except your buried GOLD, but it better be buried very good. Modern 'remote sensing' can see gold from the air, even when buried in the wood's.

At some point in the not too distant USA future they will come for the gold, they always do,

The only safe place is your ass far from the USA, and your WEALTH far from the USA's hands.

**

Make no mistake that BTC can be tracked by the NSA, and your 'blocks' can be stolen, this is well discussed in Satohshi's original paper, anybody with sufficient computational power can 'steal', and that means NSA.

So where is 'safe' for your ASS & WEALTH,... go find yourself a galt's gulch, .. far from the fucking main highways/flyways of the world.

Tue, 11/19/2013 - 23:13 | Link to Comment Son of Captain Nemo
Son of Captain Nemo's picture

If we all decide to cut and run, who will continue to drop the bombs, rape, mutilate, torture and murder the remaining holdouts in Syria and Iran as we afix the fresh new yellow ribbon bumper stickers to our cars in our unequivocal support of what they do?

Can't keep that one World Reserve status if we don't take care of the ones who either don't want to buy anymore or dump it.

If the U.S. military decided to mutiny en masse tomorrow, I might agree w/ Gantham's 25% upside prediction over the next two years.

Nice with /sarc

 

Tue, 11/19/2013 - 23:36 | Link to Comment carlin401
carlin401's picture

Don't fear, you know the majority of US citizens don't have passports,

and the world will not take the USA's poor,

If your not rich, good luck getting a long term visa abroad,

Smart folks left the USA in the 1980's,... only the dumb and poor remain,

Tue, 11/19/2013 - 23:45 | Link to Comment Son of Captain Nemo
Son of Captain Nemo's picture

Unfortunately you nailed that one.

Call me nostalgic.  Guess I'm "poor" and want to remember the potential it always possessed but never realized.

Wed, 11/20/2013 - 12:17 | Link to Comment gonetogalt
gonetogalt's picture

Well, I came down here with little money, started dredging enough gold to justify a work permit renewable yearly, and after 5 years translates to citizenship.  Or, you can just marry a native.  There is a way if you're sufficiently motivated.

Tue, 11/19/2013 - 22:52 | Link to Comment Osmium
Osmium's picture

"Be prudent and you’ll probably forego gains. Be risky and you’ll probably make some more money, but you may be bushwhacked and, if you are, your excuses will look thin. Your call. We of course are making our call."

So yiou have no idea where the market is headed.  Got it, thanks.

 

Tue, 11/19/2013 - 23:01 | Link to Comment Imminent Crucible
Imminent Crucible's picture

I don't think you got it.  He said very plainly, "I think the market goes UP another 20% to 30% over the next year to two years" and after that we get what we deserve.

"Be prudent and you'll probably forego gains" means "We'll take money off the table now, because this could go on longer and higher, but it could all go to hell tomorrow."

 

Tue, 11/19/2013 - 22:58 | Link to Comment Kina
Kina's picture

At the first sign of a crash won't they just throw Trillion dollar coins into the furnace.

 

The bigger risk might holding too much in USD because of their likely response to a market crash in motion......SHTF

 

They will go Zimbabwe thinking it will be different for them.... market crash people exiting stocks, selling USD.... TPTB insert trillion dollar coins etc....to stop markets crashing.....devaluing the USD futher.... a double whammy on the USD at the first sign of a real crash.........

Tue, 11/19/2013 - 23:06 | Link to Comment carlin401
carlin401's picture

Once the capitalization of BTC is a trillion ( the size of Apple ), then it will be no problem for the USA, to take the stolen BTC's from 'silk road', which will be worth 100's of billions and use that money forever to payoff the USA debt.

Don't you all see we now live in alice in wonderland?

Wed, 11/20/2013 - 09:30 | Link to Comment pavman
pavman's picture

This is a brilliant strategy!  Too bad they shut it down :(

Tue, 11/19/2013 - 22:59 | Link to Comment Dr. Engali
Dr. Engali's picture

It was not deregulation that crashed the fucking markets. It was the moral hazard the fed created when they bailed out LTCM. When Wallstreet knew Greenspan would bail their asses out instead of letting them go bankrupt, that's when they really started ramping up the risk. A free market can never work without bankruptcy as the ultimate regulator.

Tue, 11/19/2013 - 22:54 | Link to Comment BadDog
BadDog's picture

Who's this "We" white man?

Tue, 11/19/2013 - 23:07 | Link to Comment mvsjcl
mvsjcl's picture

You beat me to the comment by a few minutes, except I didn't mention white man. I'd lean more toward "banker."

Tue, 11/19/2013 - 23:35 | Link to Comment infinity8
infinity8's picture

white man says we can cross now - no need to look left or right, it's safe.

Tue, 11/19/2013 - 22:56 | Link to Comment max2205
max2205's picture

Ok I read it....fallacy...no one left to buy stocks in size....all the people with money are in....80% can't pay for the new barrycare....so that's out....and I think if this does correct/crash, it'll be a rich mans panic...oh and they will get bailed out again

Tue, 11/19/2013 - 23:34 | Link to Comment carlin401
carlin401's picture

That's essential here,

"Rich man's panic" there has been many in US history, but very few poor man panic.

Why?

Because in all US history, most are poor to begin with, you can't go down when your on the bottom.

Who the fucking hell is rich really on this ZH board? Me thinks not many, but you talk about gold, btc, and dow, ... but really there is nobody left to own this shit except the rich,...

Most normal us people are BK, from medical bills,... the usa is fucked, but you keep ignoring the real world by talking about 'rich mans' problems, ... like the stock-market, or btc value, or gold, ... or etf's, .. .who gives a fuck about 'rich mens' problems,

Poor people know what's important, friendship, music, fucking,dancing, living, ... making baby's,.. raising children, ... far from the usa.

Tue, 11/19/2013 - 22:55 | Link to Comment boeing747
boeing747's picture

Ulta-loose policy always followed by ultra-tight policy.

Tue, 11/19/2013 - 23:01 | Link to Comment Kina
Kina's picture

Ultimate story here..... Gold is cheap, very cheap... and silver on sale..less than half price

Tue, 11/19/2013 - 23:30 | Link to Comment carlin401
carlin401's picture

yep, and so is timber land,..

all the good stuff is cheap,...

and people are throwing their money away on intangibles, ...

Faber & Rogers know, and they ain't selling anything,

This is the ultimate 'contrarian' setup, ... but one has to be very patient.

Look this past week, CISCO sales are down, and now china 'owns' the BTC mining, as they're making the usb-asics and fpga's, that essentially means that 99% of crypto-mining, will be done in asia, ...

Everyday that passes the USA sinks deeper in the fucking shit, ... but because of their MIL aggression and willingness to kill arabs/persians for the OIL, the world sits on the sidelines,... in fear

Soon the USA will not make shit, and the majority will be beggars or whores( if you still look good).

A minority in the USA will be very-very rich, living in ASPEN, .. or such, while all else in the USA is hell.

But the stock-market and BTC, ... and all paper sure it will go to the moon, but its all to be traded by a minority, as the majority will be on food-stamps.

Wed, 11/20/2013 - 02:55 | Link to Comment atomp
atomp's picture

where the beer flows like wine

Tue, 11/19/2013 - 23:06 | Link to Comment DeadFred
DeadFred's picture

Fat chance it goes that far. EOY

Tue, 11/19/2013 - 23:12 | Link to Comment alfbell
alfbell's picture

 

 

My feeling is that this is going to go on for a long long long time and surprise the heck out of everyone. It will be historical. Rogers, Faber, et al have been forecasting doom for so long that they've lost all credibility. No one is smart enough to be able to survey and analyze all of the variables (any many of them are unknown variables) involved, and there is no history to draw on either, to come up with an accurate prediction on WHEN the toilet flushes. Personally, my opinion is, we'll all be waiting for the other shoe to drop for a long long time. Just saying.

Tue, 11/19/2013 - 23:24 | Link to Comment carlin401
carlin401's picture

NOPE,

It is all very clear.

1.) the middle class are gone

2.) jobs are gone

3.) we're entering a new 'dark ages'

4.) if your still in the USA, you will die, or be sent to a prison

5.) DEBT will go astro on all, as all is debt, and money is easy, ...

The problem, is the stock market is just like BTC, why in the fuck are we even talking about the DOW or SP? For god's sake its just another fucking ponzi, just fucking paper, like an ETF.

The problem here is ZH runs this debate, and they keep you think about 'paper', but you should be think about survival, and it aint' going to happen in the USA.

Tue, 11/19/2013 - 23:20 | Link to Comment carlin401
carlin401's picture

All has been telegraphed, ... interest rates will go up, and QE will go up to cover the cost of debt service.

BTC will go up, cuz all that social-media ( NSA SPY ) money has to go somewhere, and these kids are too fucking dumb to buy land or gold, like the chinese.

***

I feel this is so fucking IMPORTANT, its worth going deeper.

Never forget folks that 'gold' is insurance, but 'land' ( not fucking condos in florida ), is your real wealth.

But what is happening is QE money is going to Social-Media ( apple, google, facebook, twitter ), and these new billionaire morons are putting their easy NSA SPY money into the likes of BTC, which is a terrible mistake.

But this BTC will be the largest transfer of wealth from the young-rich to the old-smart in history, ... think of what's going on is just one more situation where the old are fucking the young.

If you know any young rich person, for god's sake help him understand about real 'wealth'.

Lastly, the fucking god-damn 'stock-market', I'll say again, and I'll say now the only kind of stock you ever want to own, is if it your IPO, cuz its your company, you can print the paper for free.

Tue, 11/19/2013 - 23:38 | Link to Comment khakuda
khakuda's picture

This was a worthwhile read, as it was good to hear Jeremy back to market valuation and off his end of the world, running out of resources Malthusian crap.  Commentors here are calling him a failed bear, but realize people called him a bear during the last 2 bubbles and he was eventually proven completely correct.  His point, that the bubble can inflate for another year or two is keeping with historical precedent.  He calls it what it is, the Fed would never admit it but as a result of their devastating policies, these are not investment markets, they are speculator markets.  They have been for a few decades.  It has been a shit show, but they learn nothing and we keep letting the same morons in charge of prior policy failures run the next cycle the very same way.  Then, they leave Washington and "magically" wind up with a multi-million dollar consulting gig or C-suite job with a financial company.

Sadly, I fear Jeremy is right again.  We have a new Fed chief in charge who is equally, if not more, clueless than her predecessors.  She is going to keep pumping money into the bubble we call the markets until it pops.  We have had huge bubbles with a whole less amount of stimulus than the current one, so we should expect this to end in the mother of all bubbles/mother of all collapses.  Then, we are all going to cringe when we see how she "rescues the world" because rates could easily still be at zero and QE may still be ongoing.  I hate to think of the untried, legally questionable, line crossing crap they are going to pull to reinflate the next bubble.

And I still think that Yellen should be Captain Kangaroos wife with that voice, those facial mannerisms and that hairdo.

Wed, 11/20/2013 - 06:16 | Link to Comment enloe creek
enloe creek's picture

since BTC was mentioned, what i need to do is figure out if there is a reliable method of using Bitchips for something I might need. otherwise I would be holding another form of currency, the question is for me can I always and forever buy gold with shitbits

Wed, 11/20/2013 - 06:30 | Link to Comment CHX
CHX's picture

<<< True

<<< False

 

Q: If measured in "real terms" (i.e. e.g. the amount of credit / fiat currency in the system), that means there is 0 percent left on the upside. 

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