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Deutsche Suggests 'Caution' As "Seven Signs" Flash Red
Right now, Deutsche Bank's cross-asset-class research warns, all signals other than the offered equity risk premium suggest caution...
And for some context... it's been a while since we 'corrected'...
Source: Deustche Bank
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That last graph shows just how far down this thing could go. Scary times these.
the number 7 is a magical number......
Time for a joke:
This fellow was telling his friend one day about how we woke up in the morning at exactly seven am.
"so what", replies his friend.
"well after i came out of the bathroom it was 7.07.
And then what? the friend asks"
Well i went make breakfast and there seven eggs and then at the bus stop there seven people and then when I got to work there were seven people at the elevator.
So what happened? asks the friend.
Well i went to the bank and asked for an account balance and found that there were $77,777 dollars in the account.
So what happened then?
I ithdrew and went to the races where there were seven people ahead of me at the betting counter.
Don't tell me you bet it all, asked the friend.
You bet. I put it all on horse number seven in race seven.
"F&@;: don't tell me you won."
No, the flaming horse came seventh.!!!!!
So yes. Number 7 is indeed magic.
C'mon S&P 666! True valuation! Maybe even 333!
Time to buy on margin and go 400% long.
All those signs of caution are trumped by the Fed buying through its unofficial arm, Citadel
Old Yeller's put is always there for you even as she keeps warning about raising rates
Yellen has been nagging about overpriced stawk for nearly a year.
Maybe Citadel is doing the selling, if you believe the FedRes has control of the 'market".
correlation?
http://theeconomiccollapseblog.com/wp-content/uploads/2010/03/United-Sta...
Been so long since a 10% correction let's just make it a 20% and call it even. Would be 1700 on the nose.
666 or 777.
the seventh sign was Joe Lasagna pink slip
September is approaching, feels like its running out of steam.
Long way down to the 1957 starting point but I think we're primed to do it this time.
Think the 1930 starting point.
The history books of the future will tell an incredulous story of how interest rates fuelled levels of debt and asset appreciation that were not underpinned by a commensurate change in cash flows and incomes.
And they will then remark about how no one knew how to unwind this continuing frenzy because rising interest rates would act as a wrecking ball on asset values and therefore debt.
And the history will continue to state how this extraordinary situation continued on and on despite repeated dire warnings from more and more wise people.
The final chapter talks of how all debt was cut in half and interest rates doubled. It was this mandated debt jubilee that brought to an end the manic speculation and the manic borrowing of governments. It also gave savers and retirees just reward and brought asset values back within reach of first home buyers.
My thesis is of course that there has to be a circuit breaker to restore the equilibrium that we have historically been accustomed to.
Not neccessarily, if such an event would occur those that are exposed to the stock market (401ks, pensions) will be getting a healthy hit in the balls.
Retirees would be screwed hard core. Savers may be fine, but outside of the Chinese do you know anyone who saves 50+% of their income?
The stock market is already way over valued and gives precious little returns by way of dividends.
By bringing future levels of indebtedness down you are freeing future income doolars from debt servicing to consumption which will buoy the market and hence corporations. This will increase profits and act as the true catalyst for share price growth rather than speculation which is now the driver".
In any case corporations will also benefit from the debt jubilee.
Bottom line is this. If debt is halved and interest doubled, the phenomenon is that what previously took about 25 years to pay off will now be paid off in about 17 years if I am not mistaken. This leads to further deleveraging which also frees up cash for consumption and investment and of course saving.
I know this all sounds odd and of course there will be some rough spots, but how else do we unwind without bringing the house down?
Only 7 ?
They must be almost blind.
Title should be "7 Signs of the Apocalypse"