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The Market In Pictures - The Aging Bull

Tyler Durden's picture




 

Submitted by Lance Roberts via STA Wealth Management,

 

 

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Mon, 09/28/2015 - 17:07 | 6603782 espirit
espirit's picture

It's been dangerous going into the 21st Century, donchaknow?

Mon, 09/28/2015 - 17:27 | 6603902 Dick Buttkiss
Dick Buttkiss's picture

It had a century of momentum. Nearly a century and a half if you start with the end of voluntary union. But you can start at the beginning, as well:

Is it conceivable that this document so revered was conceived in perfidy and that its primary purpose was the installation of a powerful moneyed oligarchy, that it was neither created by “We the people,” nor designed to serve them? As historian Woody Holton observes, “It is an unsettling but inescapable fact that several of the principal authors of the U.S. Constitution, which has served as a model for representative government all over the world, would never had made it to Philadelphia if their constituents had known their real intentions." — http://www.globalresearch.ca/americas-history-and-the-constitutional-hoa...

Mon, 09/28/2015 - 17:09 | 6603794 Bill of Rights
Bill of Rights's picture

Was it really a Bull market with Zero percent rates?

Mon, 09/28/2015 - 17:29 | 6603915 Dick Buttkiss
Dick Buttkiss's picture

Yes, total bull.

Mon, 09/28/2015 - 17:43 | 6603986 The central planners
The central planners's picture

If you like your 0% interest rate you can keep it.

Mon, 09/28/2015 - 17:10 | 6603801 donkeyhaute
donkeyhaute's picture

there's that word again.  *market*

Mon, 09/28/2015 - 17:15 | 6603816 cowdiddly
cowdiddly's picture

Well since the clik bait was boxing

This market is starting to look like Holyfields ears in a Mike Tyson fight. Getting eaten alive

Mon, 09/28/2015 - 18:01 | 6604079 Sudden Debt
Sudden Debt's picture

Watch the Venezuela stock market.

Stocks are way up, all the rest is worthless.

So thir market has a very long way to go. All the rest is more important. Gold and silver are the only smart move here.

 

Mon, 09/28/2015 - 18:27 | 6604193 polo007
polo007's picture

http://realmoney.thestreet.com/articles/09/28/2015/bear-market-carnage-w...

Bear Market Carnage: Who Will Be Hit First?

By Jim Collins

September 28, 2015 

Carnage. It's a one-word description of what's going on in the markets. To really understand the force and violence of selling pressure, one must look beyond the three "major" indices. The DJIA, S&P 500 and Nasdaq composite are all trading in correction territory, as of today's noontime pricing. All three major indices were down at least 10% from the recent mid-July market highs.

That's all well and good, but if you lift the hood, you are going to find many sub-indices, non-US indices and asset classes that waved goodbye to correction territory. They are now being gripped by the jaws of the bear.

A bear market is generally defined as a decline of at least 20% from recent highs, so twice as damaging as a correction. But there's a subtext to these words that you might not find by Googling them.

The term correction implies a temporary condition that is followed by a return to an uptrend. 

The term bear market implies an extended period of lower stock prices. That's the difference. Bear markets last; corrections don't.

And it is the duration of bear markets that makes them so darn unpleasant. The ramifications are felt widely, and so much more so, when there is absolutely no yield anywhere else in the world, but for high-yield and emerging markets bonds -- markets that are experiencing declines worse than those felt in the U.S. stock market.

But can't an investor just wait it out? If you are an individual, you might be able to, but remember that individuals represent (according to Goldman Sachs) only 34% of direct U.S. stock ownership. Institutions own the rest of the shares outstanding, and many of them -- for different reasons -- need equities to perform well in order to meet their obligations.

That's the problem with this Fed-QE, marshmallow-world fantasyland that has been in effect since the end of 2008. Capital gains have replaced yield as a means of generating required returns, and that is just not sustainable.

This environment has encouraged risk-taking, and as risk is removed, the nominal wealth of the world's economy is lowered. Simply put, people are worse off.

Who gets hit first?

Investment banks. Lower equity prices lead to less deal flow, and the bulge-bracket banks have supported themselves through fees generated from stock and bond offerings. That can -- and will -- dry up very quickly.

State and local governments. The perilous finances of some of America's most populous cities and states has been well-reported. But the key point isn't that deficits are being run -- although they are, and cities like Chicago are implementing draconian measures to try and stem the bleeding -- it's that long-term liabilities are unfunded to an even greater degree when fund returns don't meet their benchmarks. An example would be the Teachers' Retirement System of Illinois. TRS had 41.2% of its assets in stocks as of March 31. The recent pullback in equity prices could put their already underfunded pension plan into serious financial jeopardy.

Mon, 09/28/2015 - 18:30 | 6604201 Martin T
Martin T's picture

Just remember this "bulltards": even cheap money has to be paid back sometimes. And that is exactly what is becoming increasingly unlikely.

Mon, 09/28/2015 - 21:22 | 6604885 CHoward
CHoward's picture

"Easy to bet on hope".

 

We tried that shit 7 1/2 years ago and look where it got us.

Tue, 09/29/2015 - 01:55 | 6605497 slvrizgold
slvrizgold's picture

Yup, paper bugs are going to get the gold bug rinse treatment!

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