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US Stocks Most Overvalued Relative To Rest Of The World In History
Today's chart of the day comes courtesy of Reuters Jamie McGeever, and it shows that based on a BofA analysis, US stocks have never in history been more expensive relative to the rest of the world, surpassing both the dot com bubble and the housing bubble.
Chart of the day via BAML. Ratio of US stocks vs rest of world at record high, exceeds dot-com bubble peak in 2001: pic.twitter.com/KgbXe9zlmi
— Jamie McGeever (@ReutersJamie) January 12, 2015
Add this to what we wrote over the weekend in "A Permabull Throws In The Towel: "Stocks Are Massively Overvalued", Key Multiples Are Post-War Records", namely that the median Price to Earnings and Price to Cash Flow multiples have likewise never been higher...
... and suddenly the "thesis" for investors over the past year, namely that "what are you going to do with your cash if not put it in the cleanest dirty shirt, the US stock market" is looking a little bit precarious.
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never in history
EVA!!!!
Can't wait to see what happens next......I'm practically giddy with excitement.
You do realize that a lot of innocent people will be hurt, right?
When this bubble pops, people who have worked their entire lives to see out their twilight years without needing to worry about their finances, will be wiped out through no fault of their own.
I'm not looking forward to any of this. I just think it's inevitable.
As long as the central bankers can print currency and invest in the markets, it's time to drink the koolaid and BTFATH...
"It's temporary." - Steve Liesman
Hah ha ha ha ha ha
...and the US economy isn't the world's biggest one anymore...hmmmmmmm
No fault of their own? Try denial. It sometimes does actually have real consequences.
Denial? WTF?
All this laissez-faire bullshit on this site sometimes gets to me. The entire media is propagating the endless bull scenario, account managers even so, and the vast amount of people do not have the time to do their own in-depth research, instead relying on - indeed PAYING - professionals to do it for them. And you know, for the past 6 years, they have been right. Absolutely right. All markets have surged in unison, and those who traded on investment advice - however moronic that might appear - from the ZH groupthink have gone bankrupt by now.
I even read some idiot on here suggesting we each should pay for our own private police force. Are you fucking kidding me? No quicker way to turn society into a Back-to-the-Future Biff's parallel line of history.
It's got fuck all to do with denial, and all to do with sleight of hand tricks.
You have a feeling the casino can’t pay out but you refuse to believe the truth.
People who depend on other people for their outcome get exactly what they deserve…. Nothing.
Ridiculous.
This would mean you don't use hospitals, roads, supermarkets, hell you wouldn't even be posting this, as computers hadn't been invented if the system worked as you just described.
Come on EscapeKey, even the most financially illiterate should harbour some doubt and suspicion after the last 7+ years. One would hope that they would be sufficiently concerned about their own nest eggs to at least search out alternative opinions on the net. Everyone, I mean everyone, knows tgat the bankers have fiddled rates, prices and bonuses etc. How many red flags do they need. Taking personal responsibility could easily lead them to sites such as this one. "Seek and ye shall find."
not my parents. living out their retirement years in grand fashion, burning through their wealth w/o a care in the word and will leave behing nothing but a few trinkets. it is a rift bewtween us with my recomendations to convert their paper "wealth" into hard assets such as land (farm) to pass down to their heirs, instead it cruises to Tahiti and around the world and new furniture and cars .... they refuse to see and simply do not care about their inaction to help secure the future of their grandchildren.
"it is a rift bewtween us with my recomendations to convert their paper "wealth" into hard assets such as land (farm) to pass down to their heirs,..."
First of all @viahj, spell check is that little button with the ABC and a check mark. Second, if there's a rift between you and your parents it's because they recognize that you are simply a familial leech who is waiting for them to die so that you can inherit the wealth that they worked to accrue. If they want to spend their money on cruises to Tahiti or a flight to the moon that is their business. Focus a little more on accruing your own wealth and a little less like a buzzard waiting to feast on a carcass.
You mean:
"The answer is Work Harder. What's the question?"?
The "live for today vs. inheritance" conflict happens when your situation is good. It could be worse.
EscapeKey has a point. Denial cuts both ways. Having been preaching the PM mantra for close to 20 years and seeing what has happened the last 3 and half years has left me feeling bewildered and sick to my stomach. I have converted very few people and most of them think I'm probably stupid and don't know know what I'm talking about anymore. It is fair criticism. Timing is everything in the markets, and gold and silvers time still hasn't arrived. Miners have been a Fools Game and a complete disaster until just recently. So has the time for PM's to do their "moon shot"? I don't know, but the rest of market is surely more than ready to crash and burn. Don't kid yourself, it is going to suck for everyone.
And btw, Tyler is always criticized around here for his calls yet he always said to BTFD. Did anyone listen to him? They should have.
I agree it's been very painful, but the fact remains that nothing has fundamentally changed regarding the actual condition of the US economy, or that of the world for that matter. Either you a) believe in central bank omnipotence, b) you believe in your ability to time the market, or c) you tell yourself that reality must assert itself sometime in the next few years and you get the fuck out of these "markets". Even the mainstream is starting to say "there are no markets, there are only interventions". If one could print one's way to propserity, no one would ever have to work again. And that's not reality, is it? Yet the entire US financial system is undeniably propped up by exactly that, along with the US political system. Banking is the largest contributor to US GDP. What the fuck does banking actually produce? NOTHING, other than credit bubbles and false, temporary "prosperity" (plus of course massive profits for bankers to recycle into the political system).
The Clintons remarked about how powerful the bond market was. The solution was to show the wealthy how their interests were closely aligned with those of the dot gov / banks, and make them afraid of the mundanes. This has convinced them to go along and get along, delaying (but I believe ultimately not preventing) the assertion of reality. Lords and ladies for the neofeudalistic future.
If the Fed could just print everyone a few $Million USD, then we could all just sit home and order imported stuff over the Internet. IT'S NOT REAL. We'd all (still) have McMansions, illegals doing gardening and housework while we go to suburban nail salons. The Fed has chosen, as an implement of national political policy, to keep the rich happy, and thus to try to maintain the social order. The political arm has chosen to militarize the police, to kill mundanes frequently and publicly to inculcate fear, and to fan the flames of division everywhere except at the top, where the blues and reds get along very well, thank you very much.
+1 BoP.
Very few could have ever imagined the scope, nor the depths of fiscal and monetary depravity that have (temporarily) suspended the economic laws of physics (bless his heart), in the manner that Central banking has over the past 13 years. At this late stage, I believe it is more a project of getting oneself 'prepared' and much less on trying to convince anyone. What is coming will come soon enough.
I agree with both you guys.
The situation is FUBAR...and when it turns ugly all hell will break loose. The fuse looks to be lit from where I sit...
its called research and understanding what you're investing in.
but since you dont believe that i have some magic beans to sell you if you're interested.
Magic beans you say? Sure, like buying and holding Facebook when everyone here bashed the shit out of it under $20 (myself included). It went to $82 last month and has a cap of over $200B now.
Not defending the FED and Wall St pumpers at all (I despise them), but holding stocks beat the tar out of PM's the last few years. That's a fact.
Policing Detroit.
http://youtu.be/HnPZ1yuoFIc
laissez-faire bullshit on this site - WTF?
All things you are mentioning have happened like this before.
The point is since we have no FREE markets anymore, the measuring stick to which everything gets compared to is either not available or has a different length each day.
Don't moan about the negative consequences of people's bad decisions but demand same consequences for same actions at same delivery speed for all, no matter how poor or rich!
Everything else is de Nile.
W T F are you talking about. There is an option for all of them, including YOU! GET THE FUCK OUT NOW!
'innocent people' LOL
Wah. They bought the lie. They get... THE WOODCHIPPER!!!
I'll do the chipping for $10.00.
fuck you asshole... you sound like the type that wouldn't bust a grape in a food fight... I bet you'd be the one to belly up first at the FEMA camp chow line after a week of "roughing it"...
I’ll humanely thump them with the brain thumper before the old heave-ho into the chipper. Better?
Terminus?
C'mon, ladies and gents. I know this place is Fight Club, but do none of you have grandmothers? Mine have both passed, may they rest in peace, but they were gentle ladies who loved on their families and relied on others to be as good-hearted as they were. They would have never guessed what nefarious deeds were being done in the name of "democracy" or "prosperity". They had no ability to understand CDS or derivatives. They couldn't imagine what evil has resided in the White House for the past several administrations and forget about them ever believing that the President wasn't the guy in charge.
So down-arrow me for having a soft place in my heart, but there are some innocents out there and every once in a while I pick up an extra can of corn for them.
Uchtdorf....well said.
The financial "end of days" may be necessary, and I will smile with the rest if the truly bad guys get their come-uppance....
but gloating over the misery of people who did they best they could and simply got caught at the wrong place at the wrong time.....is bad form.
protocol #20 Replace sound investment with speculation
Not if they double-short ETF it.
Are these the same innocent people who for decades have supported a government that spends more than it taxes, destroys the economic environment, created a corporate fascist economy and has had no problem supporting government ponzi schemes because they were the beneficiaries?
The same people that let the Federal Governement begin to control their states, and the states their local governments until there is simply no such thing as local control?
In the long run, everyone will be better off with a major reset. Because without one, the pain will never end.
Key
It is always the retirees who pay the bill (actually the savers) when hyperinflation comes knocking. A jubilee is the same thing....when debts go away it hurts the creditor and benefits the borrower (the debtor).
http://fofoa.blogspot.com/2010/07/debtors-and-savers.html
no one knows how this thing is going to turn out but for sure it looks very ugly
Bullish!
USA, USA /sarc
Good morning Vietnam !
Look at the dalla go. The 10yr! Oil at 46 and change. The joos are taking their ball out of Europe and going some where else to play.
And it's going to rain here all week.
I have nothing against Jews . Just a observation . I wouldn't stay there either under the circumstance
and Leon's getting larger!
https://www.youtube.com/watch?v=-cJmpwkUx4s
I don't think any of that matters any more. The Fed is in charge now.
The Federal Reserve will keep giving the Wall Street junkies their QE fix.
QE 4 is on deck this year.
And you're a fucking idiot along with Lws of Physic
I don't think they'll call it QE4, at least not initially. Maybee another name like Operation Twist (I'm sure that behind the scenes they were saying ... he he "twist" just like the threads on a screw, why can't you laugh at our jokes you fucking muppets) or some stealth QE that won't be mentioned at all but sites like ZH and ShadowStats will catch it.
value is irrelevant these days.
Another fucking idiot weighs in
Before blowing hot air look at what the Federal Reserve targets. It has infinite money to support stocks and all other markets.
Only think that kills their game is a dump of the US dollar as the reserve currency/petro dollar.
Woo Hoo!
MERICA! #1
USA USA USA! Obama Obama Obama!
Free "everting"!
Footbahl!
BasketBahl!
Beer!
CIA grade A heroin!
MERICA!
Woo hoo!
Edit:
"we" killed Osama Bin Laden (who flew three planes into the buldings in NY on 9/11 himself) and dumped him at sea! Whoo Hoo! MERICA!
If it is war between the Rockefellers and Rothschilds we are seeing, the stock market is going the way of oil. Bankers won't keep the prop going if industry is deserting them. They make money both ways. And the oil cos are still working with the Russians. Bankers need to walk their baby nuts around the stock market to make a point--irrelevant as their ponzi bubble point might be.
"Charles Evans, head of the Chicago Federal Reserve, said his goal was and S&P of 2200 before 2014. So it's already in the Federal Reserve's plans."
- yogibear 11/18/2014
Charles Evans of the Chicago fed says at least 8%/year. These PhDs are pulling the strings.
He was saying before the end of 2014. Almost got there. The Fed's infinite money printing to obtain set goals.
US Stocks Most Overvalued Relative To Rest Of The World In History
One farce to rule them all, One farce to find them,
One farce to bring them all and in the darkness bind them...
Hurry rearrange the deck chairs....that will stop us from sinking!!!
Nonsense. Every other index is massively undervalued. FED Bitchez!
mr. valentine has set the price [/randolph duke]
maybe...it's time to buy rest of the world? how's that international stock fund work?
And guess who is behind making Dodd Frank toothless and Oligarchy's tool in Congress :
http://www.nakedcapitalism.com/2015/01/the-feds-and-republicans-war-agai...
Those tea drinkers are useless when it comes to actively doing something to castrate the TBTF.
Stocks are set to take the biggest tumble of the year this week. Every major index will suffer.
DJIA
http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...
S&P 500
http://www.globaldeflationnews.com/sp-500-indexelliott-wave-update-for-w...
And these are based on those companies with positive earnings, hmmmm, how about including the ones with losses as well to compare
EscapeKey makes a valid point....the US has lots of hard working people, who raise their kids, buy houses, pay their taxes, serve in the military, and volunteer for charities. They save their money the best they can, mow their yards, and in short....try to live basically good lives. They don't have access to huge amounts of stock...many work for small businesses without fancy 401K.
No....they don't understand economics, at least not they way our world currently works. The don't always vote smart, and may well let religious or deeply embedded cultural feelings overrule common sense when they vote. But at their core, they aren't bad....and they TRY to do what they think is right financially. As pointed out earlier, the fields will be red with their blood as well.
That fact in-and-of-itself may not be sufficient to wish for a different outcome....because a collapse or prolonged slump maybe all that will cure our current problems......but perhaps we might restrain a bit of our glee with regard to the human collateral damage.
Cheap oil, expensive stocks. Obviously.