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What's The Difference Between Markets & Reality? About 22% YTD
Faith, hope, and confidence are the 3 key factors driving stocks at this point with fundamentals lagging an awkward 4th place. Faith in the perpetual central bank put (and bad news is thus good news); Hope that repeating the same 'experiment' following its previous failures will work this time; and confidence that the old normal is re-attainable (no matter how many times we kick the can). Year-to-date, S&P 500 earnings are up around 7% (and the trajectory is declining); accordingly, as we noted previously, confidence is ultimately responsible for levitating nominal stock prices through multiple expansion.. and is responsible for the rest of the market's gains. With confidence now fading (according to most surveys) investors will not be willing to pay increasing multiples unless they are confident that the future streams of earnings are sustainable and forecastable...
The S&P 500's return year-to-date - between Fundamentals and markets...
(h/t @Not_Jim_Cramer)
But, it's all about confidence... investors will not be willing to pay increasing multiples unless they are confident that the future streams of earnings are sustainable and forecastable... And simply put, the current levels of Consumer Sentiment need to almost double for the US equity market tp approach historical multiple valuation levels...
And remember - as we noted here - its the 80% that consume and the 80% are not benefitting from the wealth effect (much to the chagrin of the Fed).
So next time your "manager" or investment advisor proclaims stocks are cheap compared to historical peak levels, perhaps its worth asking him with "risk" priced into the market at almost all-time lows,
Where is the next doubling of Sentiment coming from? Especially in light of the collapse in economic confidence we are seeing recently.
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Funny what $85 Billion a month of taxpayer IOU's to the wealthy will do. But I keep forgetting the real problem with our economy is the welfare queen in the other story.
People buying stocks in this rally are doing so logically.
Most of them are fully aware that the market is way ahead of the economy.
But they buy anyway because they choose to front run the Federal Reserve's extraordinary monetary policies.
The smartest people are the ones who rode the rally. In the full knowledge that it is a phoney bubble market. They don't care why prices are rising, it's irrelevant. It's merely another opportunity to buy low and sell high.
The Fed will allow the markets to plateau before they taper so that leveraged bulls can take profits and mutual funds and 401K's can rotate in. Thus socialising the costs of the market impact of the pending Taper.
The Fed doesn't want to punish all the hot money that did what the Fed said they should do. They don't want to wipe out the risk taking recovery bulls. The taper pause is to allow the burden of the post taper bear market to be more widely spread amongst society.
That's a plausible theory. It is also plausible that they will tank the market very rapidly when they are ready (with JPM and Goldman short, of course) so they can profit on the way down. The big banks have been offloading their shit investments (MBS especially) onto the taxpayer balance sheet for some time now. There's never enough money for these guys, and a major financial collapse could be just what the doctor ordered for further consolidation of power by those pulling the strings. The only thing we can know for sure is that none of this is happening to benefit the small investor.
It's a self-feeding frenzy.
Marc Faber on stock valuations:
http://www.planbeconomics.com/2013/11/marc-faber-sees-no-value-in-stocks...
"The Fed doesn't want to punish all the hot money that did what the Fed said they should do. They don't want to wipe out the risk taking recovery bulls. The taper pause is to allow the burden of the post taper bear market to be more widely spread amongst society."
But it isn't going to be widely spread. The insiders walk away with the loot. The bag holders, they get a bag to hold.
Two sides of the same coin. The low income welfare recipients provide the votes that allow the high income welfare recipients to extract wealth from the middle class. Plenty of blame to go around, friend.
No doubt there's plenty of blame to go around. It just irks me when all the focus is on one side of the coin. We can all agree that people milking the system need to be stopped, but for some reason a lot of people only see the bottom doing it and look the other way when the really big milking is done from the top.
I agree, but it seemed like you were criticizing ZH and its readers, which is totally unjustified given how much ZH takes the powerful wealthy and elite to task for our current predicament.
Exactly, I see lots of talk about guillotines and rope on this site, and its not in the context of using them on welfare queens. On the other hand, LTER goes apeshit the minute you talk about welfare queens or other parasites. He is the other side of the coin. Wants to blame everything on the "rich" and nothing on the "poor".
Yeah, go read the comments on the other thread and tell me about how most people see it. I go apeshit when I see the same old left/right paradigm bullshit in all its glory because it is exactly the reaction they want from us. The fact that some ZH readers see it does not excuse the many who do not. It is watching divide and conquer unfold before my very eyes. And you are quite wrong in your understanding of my ideology. I just like to focus most of my attention on the biggest welfare queens (the oligarchs), whereas most would focus more of their attention on the lesser (the poor). I don't waste time posting about petty thieves, either, but it doesn't mean I want to do away with laws against petty theft.
You aren't getting any argument from me on the left/right paradigm bullshit. I think everyone here is well aware of it.
Many here see it. Many do not. I even saw a loving Thatcher comment in there on the other thread.
If you're referring to me quoting something she said, you might want to know that it wasn't in praise of Thatcher, but rather in contempt for the sort of fiscally unsustainable and reality-blind ideologies that are becoming ever popular among the people. Whenever a system is on the brink, Marxist morons like Maduro show up and double down on dangerous economically ignorant ideologies which only ever serve to give the oligarchs even greater control than before.
It may have been your post and if so I didn't catch the sarcasm. There were a lot of read and so I probably missed the context. But turning to your point above, I think we're moving more towards pure fascism than Marxism. Of course it is being sold as socialism to the population, but that is not what it is.
There isn't much difference between fascism and socialism in practice.
True socialism doesn't believe in private property. Fascism believes in concentration of private property. The two concepts could not be more different at their root. The reason the lines are blurred in modern discussion is that the sociopaths who own everything are smart enough to redistribute middle class wealth to the poor in order to keep social order. The middle class believes it is on a treadmill going somewhere so they work away and pay taxes, and the poor are happy to take handouts and live just as well for doing nothing, and things humm along nicely. While we hear every day about socialist policies, it is nothing more than another big Lie.
The fact that "liberal" now means main stream left wing is proof enough of what you say about how we are constantly being misled by the ruling class. It is important more than ever to focus on principle, fact, reality, and the consequences of action when discussing a topic, in light of the fact that the nouns in the language are constantly being distorted.
My point is that there is no mainstream left wing. There is still a right and left when it comes to social issues (gay marriage etc). That is part of the divide and conquer strategy. Many voters vote on social issues, and the illusion that the parties are very different on both social and economic issues is essential to the system. But the reality is that the two parties are both hard core bought and paid for fascists. I agree that the two parties say things that make them seem quite different on economic policy. It is what they do that matters. And what they do is support exactly the same policies.
In 2008 I would have agreed, but that argument is simply not plausible at this point. Limited government has at least a pulse in the GOP; it's been extirpated completely in the Democratic party. Which is sad, because it was a pair of Democrats who said the era of big government was over not too long ago.
I think you can use the terms mainstream left and right wing, so long as you remain aware that even within those titles chances are slim that any one person agrees with more than 90% of what one might take those terms to mean.
Totally agree that it's what one actually DOES that matters. I, a more or less libertarian, was recently on vacation with a friend who is what I'd call mainstream left wing. We were approached by a beggar claiming to be a veteran, but neither of us gave him any change. I felt that not giving him change was consistent with my beliefs, which I won't get into for the sake of brevity, but my friend's beliefs mean that he probably should have given some. Instead, he shortly after told me "Man, our government really needs to take better care of the troops". Normally when I say we need to abolish the state in some conversation, he says that government is just a represensation of the people, but apparently when his money is on the line suddenly he doesn't believe that anymore. I left it alone, because it wasn't worth the argument, but I now I can be quite certain about his true character.
Far be it from me to defend a leftist, but maybe he didn't believe the guy's claim to be a veteran? I'm a libertarian who believes in noncoercively helping the poor, but no way I'm handing money to a random guy on the street who's probably (a) not really poor and/or (b) just going to buy drugs or liquor with it anyway. I'll donate to an organization that verifies these things professionally or I'll give the beggar some food directly, if possible. No hypocrisy there.
Holy cow, it's like the USSR never existed in your world. Concentration of wealth is the end result of socialism too.
Your definition of fascism is incorrect; fascism is about alignment of all aspects of society with the will and benefit of the people as a whole (which in practice becomes alignment with the state itself). While there is nominally such a thing as private property in a fascist society, it is not comparable to private property in a free society; continued possession of any property is dependent upon the whim of the state. Concentration of wealth in the hands of the state-favored elites is a side effect.
The platitudes mouthed by fascists and socialists are indeed different, and the motivations of their early supporters as well. But the end result is the same.
We have private property in this country? My property tax statement says otherwise. We are all renters of property from the government. Sure, I can tell you that you can't trespass on "my property" but thats about it. Add up all of the property taxes you have paid and it will most likely exceed the value of the property itself.
Well, we're not a perfectly free system by any stretch, but there's no comparison to a fascist state. There's no local or national grand poobah who can take your property on a whim. (and I agree Eminent Domain Abuse is a problem)
What difference is the name? Its consolidation of power by the many, into the few. One way or another the Sheeple BAAAAAH for it. Look at the idiot calling for presidential term limits to be removed. That will make it real easy to have a dictator like Chavez in power. Its Statism is what it is. Bigger government begits bigger government.
Yes but we can agree that the poor play a biggest hand in getting corrupt politicians elected (based on their numbers as democracy is simply a numbers game). The poor are not stupid... if they are promised and receive free stuff, they will continue to elect that politician and turn a blind eye to that fact that he/she is wheeling and dealing with the oligarchs as well.
Not sure I agree with that. Voter turnout is usually around 60% (or less for purely Congressional elections), and the poor tend not to vote. Also, we have had so-called "conservative" majorities and presidents in abundance over the last 40 years, and by your theory that should never happen if the poor (the largest voting block by far) were out voting for free shit politicians and swinging the elections with their numbers. Even today with the welfare state being at heights never before seen we have a majority of Republicans in the House. I do agree that the poor vote overwhelmingly for Democrats, thus doing their part to keep the two party system in place for the rest of us.
You may agree that the poor are voting Democrat, but Democrats are continuing to move further to the left, and the right is also forced to move further to the left just to survive. Past Democrats like JFK would be considered right-wing by today's standards.
If voter turnout is low, it is the lowest in old conservative districts which have been economically desimated by radical left-wing anti-industrial policies, which seek to create a permanent urbanized welfare class.
I think both parties are moving further towards pure fascism, while pretending to move more to the left. Some politicians are pretending to move more to the right. But both Teams supported TARP. Both teams support globalization (the idea that "radical leftists" destroyed the manufacturing base and not offshoring for cheap labor is missing the primary explanation for why we find ourselves here). Both Teams support the NSA, endless wars overseas, the Fed, etc. By their actions, they are both openly and brazenly fascist. The socialism meme and welfare/EBT shit is to keep the population in line while the oligarchs prepare for whatever it is they plan next which seems to require a lot of armored police vehicles, a massive spy grid, cameras on every corner, several dozen hollow points for each man, woman and child in the country, and so forth.
From my perspective, anything that increases government power at the expense of individual liberty is a move to the left. I don't see fascism as being right-wing at all. I see it as being extremely left-wing, but only slightly to the right of communism. They are certainly not opposites as some government-sponsered historians would lead you to believe.
Also, industry was forced to move labor offshore in order to stay alive. They were driven out of business in this country by a host of crippling regulations, taxes, and currency manipulations.
I agree with you to the extent the Left/Right debate is inherently flawed because if oversimplifies everything and groups together people who have completely different ideologies.
Explain how powerless the low income vote is when the middle class and upper class both voted for Romney. The urban poor had sky-high turnout rates in 2008 and 2012. Some districts in Philadelphia even had >100% turnout.
And that's with no politician in Washington, not even the die-hardiest of Tea Party die-hards, seriously threatening Medicaid or food stamps or the like. The polls would look like Thanksgiving at Walmart if anyone dared to do that.
I don't think the middle class voted overwhelmingly for Romney. The whole reason they ran Romney is that he was such a poor candidate. And the Tea Party guys in national office are reading off of a script and playing Tea Partiers on TV. Nothing is changing because the people who own both parties are quite satisfied with the status quo.
"I don't think the middle class voted overwhelmingly for Romney."
Which is why I didn't say "overwhelmingly".
"And the Tea Party guys in national office are reading off of a script and playing Tea Partiers on TV."
There are no TP guys in national office; assuming you mean Congress, the true blue TP guys and gals are about to get Bushwhacked by Karl Rove and the USCoC in the 2014 primaries, so the fact they're sticking to that "script" would seem to indicate sincerity. There are a lot of pretenders who attached themselves to the TP label in 2010 but the shutdown fiasco did a good job of separating them from the true believers.
"Nothing is changing because the people who own both parties are quite satisfied with the status quo."
There you go again. The status quo would be screwed if the American electorate stood up and said enough is enough. The TP is the closest we've come to that in decades, and you nonetheless decry it in favor of a despairing pout about some conspiracy or other. When your pals on the left come up with a similar peaceful anti-status-quo movement (such as Occupy without the pro-government-power leadership) let me know and I'll support them.
Congress is national office last time I checked.
Okay, I'll just leave you with this to ponder while I stand back from the computer for a while. Ted Cruz is married to a Goldman Sachs executive, and he received huge contributions from large banks and financial industry types. Rand Paul supports drones, and his big money backers cannot be discerned because they were funnelled through groups who do not have to report (I wonder why that would be). The Tea Party stuff at the national level is theater, but it works as evidenced by you. People don't stand up and demand change when they think they already have it, right? These guys are actors in place to make it appear that there is some kind of real division in Congress. If your point is that you agree that Cruz and Rand are fake, then why do you think the local Tea Party won't be usurped again? I seem to recall fascist Palin becoming a big favorite of the grass roots Tea Party movement.
"Congress is national office last time I checked."
LOL. Check again. Despite being in the nation, over 18, and not a convicted felon, I don't remember having the opportunity to vote for or against Harry Reid, do you?
"The Tea Party stuff at the national level is theater, but it works as evidenced by you. People don't stand up and demand change when they think they already have it, right?"
Which is why the TP sat back and rested on its laurels after its victories in 2010? It's become more and more aggressive with every success.
You seem so wedded to the narrative of helplessness in the face of some shadowy conspiracy that you lash out at any attempt to do something about it. I'm not saying you should join the TP, maybe you disagree with them on other issues; but you should try to do something more effective than complaining in a blog comment section.
Have the Tea Party even come close to dismantling the TSA, NSA, DHS, EPA, or DOE (both)? Nope. Have they even suggested shitcanning any of those agencies? Nope. Or maybe ending the insane war on drugs? Nope. How about closing the 700+ overseas military bases, and cutting off the pork-spigot to the MIC? Nope.
Face it, we've gone far past the point where voting is gonna save us. It's either gonna be ropes and lamposts for the politicians and bankers, or Soviet Union, American Style.
I think it depends on the individual. If you are higher up the chain of command, you might be getting more benefits from the milking being done at the top. I don't shed any tears for people who are mid-level managers in some government supported industry complaining about the welfare state. They are just as much a part of the problem, and they probably both vote for the same politicians who are responsible for this mess. It is the old industrial middle class that has been marked for extinction and made uncompetitive by our political elite. We still have a service sector, which is like a car having a body but no engine.
The old industrial middle class was a product of primitive electronics and every other industrial country being devastated by WW2; it was never sustainable once Europe recovered, East Asia stabilized, and automation became cheap and reliable. You wouldn't know it from the doom and gloom crowd, but US industrial manufacturing output is as high as it's ever been -- they just don't need to employ as many people.
I don't buy the post-WWII "Europe was devasted" argument. Maybe for a few years after the war, but not 30. It doesn't take 30 years to build a few factories. The reason the US was so successful after WWII and well in the 1970's was a vibrant middle class. CEOs made ten or twenty times the average worker, not hundreds or thousands of times as much. The '80's ushered in financialization and globalization and concentration of wealth to the top (what they used to call "trickle down"). There was an illusion of wealth among the middle class while people borrowed to replace real income. When loans were easy to come by and the Fed created housing and stock bubbles, things seemed good. We are now paying the piper as a society for a gutted middle class.
When you concentrate wealth at the top and convince workers that they don't even deserve a pension much less a living wage while they are working, you've killed the golden goose.
Successful well into the 1970s? The air was already leaking out of the US economic balloon in the late 1960s, though that had more to do with rampant inflation and govt spending on war and welfare than with overseas competition. The 70s were a barren wasteland of an economy. I'm no Ronnie Reagan acolyte, but he did a few things right (simplify the tax code, quell inflation) along with some very bad things (doubling the debt, intensify the war on drugs). The sense of relief that allowed him to campaign on "morning in America" in '84 was no illusion.
If you believe the Fed has removed any risk, what multiple would be too high?
The other reality.... "I want my things" - showcase for the Thangsgiving Thursday madness...
http://www.youtube.com/watch?v=jcfCTeS0aUM
I personally can't be an equity bear with the policies the Fed is persuing. I think eventually they will be handing out checks which must be spent within a certain timeframe at some commercial venue. I still like gold more than equities in the long-term, but I think in the short to medium term (12-18 months) stocks will likely outperform.
"With confidence now fading (according to most surveys) investors will not be willing to pay increasing multiples unless they are confident that the future streams of earnings are sustainable and forecastable..."
Just make up some numbers. The 2009 rally began with FASB being told to allow banks to lie about value of their assets. Finanacial fraud moves markets higher.
Research and developement is now counted to goose GDP, so businesses should just make up some metric that makes the future look sustainable and forecastable.
" investors" what's that? You are kidding me right?
At 7:30 am, monday through Friday, there are hundreds of thousands investors ready to hit the sell at market button on every stock above $30 per share.....because they are only worth 20 to 40% of todays price.
They will have to close the markets within 5 min of the open....and it will be weeks before they let it reopen IF they EVER let the banks reopen....which I doubt
You keep fantasizing about that, you will need glasses.
No Bears are left in the Equity markets and No Bulls are left in the Gold market - everything is set up for the big surprise as usual. What will trigger that surprise? Maybe the chart below with the NYSE Margin Debt can give us some clues. Please note that Margin Debt Amount normally peaks before the Stock Market. Any move towards Taper will raise Interest Rates and we can have the Top in Margin Debt very soon if not already. http://sufiy.blogspot.co.uk/2013/11/gold-is-in-vertical-reversal-after.h...
You know when the Indians are PO'ed, you got problems.:
FOURTH REICH!http://mohawknationnews.com/blog/2013/11/29/fourth-reich/
And remember - as we noted here - its the 80% that consume and the 80% are not benefitting from the wealth effect (much to the chagrin of the Fed).
Bernanke wrote in 1988 that QE doesn't work. What chagrin? Who has benefitted from QE? The bankers.
The wealth effect is a higher pay check, not a higher stock market.
Maybe, but look! You can buy a shiny new car.
The International Banking Cartel - The MOVIE.
http://www.youtube.com/watch?v=51yl5y8IgW0 (1:05:03)
ABOUT THAT CHART..."The Rich Hold The Assets, The Poor Have The Debt"...
I pray that someday Leftists will stop using such data to whine, "See! The Eeeeeevil Rich are Uuuusing the Poor! Eat The Rich!"
Charts like this do NOT prove, display or otherwise suggest CAUSATION.
There is *plenty* of STUPIDITY at *all* "levels"...though there may be more among the so-called "less fortunate"...
...which I believe is a way of showing the inevitable effects of bad luck and poor choices.