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Chart Of The Day: Bulls Better Hope It's Different This Time
If earnings are the mother's milk of stock bull markets, then the endless supply of talking heads bloviating on the next leg of the stock market rally being driven by a post Q1 renaissance in earnings growth (ever ready to pull out their hockey-stick forecasts) may want to look away from the following chart...
Despite 22 years of correlations (and obvious causations), asset-gatherers and commission-takers still think this time is different and channel-stuffing and 'if we build it, they will come' inventory overbuilds will be bought away in a swarm of freshfaced crappy creditworthiness consumers... not this time - as peak debt is now upon us.
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A. Real earnings do not matter.
B. Price is decided first and then the explanation comes later.
The quality of earnings has been deteriorating for years already. They banks just keep redefining the definition of earnings.
Hey, if the Chicoms can have ghost cities, we can have ghost inventories.
They are there, but they have no present practical use.
Algos just don't care about that stuff.
If China has failed to create internal demand it will not export "into nothing."
We could be in store for a major correction here in the US...absolutely...Epic in the case of China. If so...but the physical products has to be "processed" somewhere...nothing says Made in China like Wal Mart so I say There.
This is just a guess based on ZERO math whatsoever...full disclosure.
Having said that though of this "estimate" for lack of a better word is true this will be VERY bullish for debt markets in dollars.
Without elaborating as to why suffice to say "if you want to sell a good cheap you have to provide cheap credit too."
So to keep it simple I remain "bullish" should a major market downturn in China happen that he Fed will put QE4 on the table "in order to stimulate demand."
I understand that driving interest rates down to zero should in fact CONTRACT demand...I'm just saying this "in the New Normal Way"...meaning..."yours theories are all bullshit because of actual experience."
Please insert comments, questions and other addenda here:
Oh, and
FUCK YOU HARVARD YOURE FULL OF SHIT YET AGAIN.
(Apologies to the Grammar and Spelling Nazi)
Wonderfully intelligent riposte. Your logic is flawless.
Spellcheck complete. No errors found!
(However, the sentiment expressed seems to have called for an exclamation point!) You also could have used an explanation point regarding your reference to Harvard.
Is that the SNB using the Greek proposal submission to cover some EURCHF related funny stuff? Or did someone just execute the sudden CHF insomniac short sellers? The Chinese maybe?
"They're buying US dollars."
So reported here.
Won't get that on CNBC...
This again? I think I stopped caring months ago. You can only drag things out soo long before people lose interest.
I find it interesting, it's the perfect example of the Austrian theory on business cycles. The fed churns out credit at below market rates of interest, which winds it's way through the banking system most of which goes into speculation - inflating asset values. Eventually a portion of it ends up at the front end of the production line where producers use the cheap credit to crank out stuff, then the stuff winds it's way through the distribution chain all the way seemingly generating real economic activity but once it is on the shelf it sits there because the consumer is literally dead.
If all that cheap credit can't produce a real profit (sales) then the whole thing goes bust. It's classic and the Keynesians can't see past their phoney macro variables that have no basis in reality.
Actually, I thought I was posting on a Greece article. Not sure how I managed to hit the one article out of 20 that wasn't Greeced.
The BOJ is pumping early. They just jacked usd/jpy 50 pips over the last 1/2 hour.
Does anyone have any good ideas for inverse corporate bond ETF's?
I'll take 'What are guns, gold and lots of ammo' for $1000, Alex.
Hey, daily double, what do you know!
Cash for clunkers 2.0
Sorry, been there, done that. I don't think the USofA owes China any steel at this time.
Bankers are using other ways of creating profits.............
Earnings matter? What a quaint concept.
Lets look at mangement's and directors' stock options which fuel the need for stock buyback programs.
China should be encouraging their corporations to grant more stock options....that will turn things around for them. Corporations will borrow money hand over fist to buy back their stock and enhance the value of these options.
EPS goes exponential, price/sales ratio is a line rotating around an average in the long run. Doesn't make any sense to compare the two.
Silver still looks good to me.
Silver looks even more fabulous than before to me.
Just a matter of time before liftoff.
Credit = slavery
Indeed.
"The rich rule over the poor, and the borrower is slave to the lender." - Proverbs 22:7
Especially when what you borrow is created out of thin air at zero expense from human predators who intend to bleed everyone dry.
Debt would still be dangerous and problematic when humans strictly trade goods for goods (gold, silver, platinum or other goods... for goods). But the damage would be much, much, vastly less.
For one thing, since everyone would need to EARN before they LEND, lenders would make sure they only lend to viable borrowers. As it is today, lending is much too easy, precisely because what is lent was not earned, and is created with zero effort out of thin air. And the banksters who lend have NOTHING to loose. If their borrowers repay, they get super rich in the short and long term. If too many of their borrowers default, they get super rich in the short term, and then their fictitious entity (bank) goes bankrupt. But they're already set up for a life of luxury and comfort, so what do they care? Not much. Plus, they can start a new bank, rinse and repeat.
Logged in to up vote this. The "human predators" power is derived from the monumental con of our monetary system. More humans need this understanding. Nice post , more like this please.
The real challenge is to find ways to counteract the generational dumbing down, dividing, distracting, and breeding dependence on govt. and corporations that has been so well executed. Along with masterful use of media/entertainment and academia to brainwash and control thinking, this is a tough nut to crack.
The monetary system is failing before our eyes- they stupidly created a system where only the principle but never the interest is created. It's been hastened by pure abject greed - they could have stretched this out instead of fleecing us dry so quickly.