S&P On The Verge Of History

Tyler Durden's picture

U.S. stocks have risen more in the past eight years than in almost any other post-World War II time of economic growth, as defined by the National Bureau of Economic Research.

The logic here is that economic expansions fuel bull markets and so it’s reasonable to measure market recoveries after a period of macro contraction ends.

Using that definition, let’s review how the S&P 500 has performed during the last ten economic recoveries. To be precise, the birth of the stock market’s bull market is dated as the first day after an NBER-defined recession has ended. The market run continues through the peak.

The S&P 500 Index jumped 172 percent from July 2009, when the current expansion started, through Wednesday. The biggest advance was about 300 percent and occurred from April 1991 to March 2001, when Internet-related stocks soared.

As Capital Speculator blog's James Picerno notes, the question before the house: Will the momentum of late endure long enough to overtake the 1991-2001 record in duration and/or magnitude?

If so, the bull market in the here and now has to last another 463 trading days, which translates into a market rally that goes deep into 2019.

There's just one thing wrong...

Remember - the 'market' is not the 'economy'... or maybe it is in the new normal?

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Mr. Class and Quality's picture

"It's different this time."

Yeah, there are no fundamentals to back it up. Weeeee!

yogibear's picture

It's the central banks and their cheap money. Creating the everything bubble.

Taking down the NYC  national debt sign is a clear signal where the government and Federal Reserve is taking this.

Like the Federal Reserve's elimination of M3.

Printing folks on a whole new level going forward and destruction of the currency's value.

philipat's picture

The other killer chart is money velocity, which is still declining at record lows. If the money printing has been so succesful, how come?

yellensNIRPles's picture

Because the super rich are making all the money, and they don't spend what 320 million regular Americans would, no matter how many fucking private jets they own. It's proof that Trickle Down Economics is a failure by any measure. The super rich just keep their money and buy all the shit they need to rule the world. The peasants, who would spend money hand over fist get nothing. And so the velocity of money stays low.

Mentaliusanything's picture

Money velocity gets eaten (almost fully) by debt.. Lots of debt . It is a cancer of veracious means.

The debt will swollow all in the end and then there is only real money (Gold, Silver and tradable good) left.

They know it.

Mentaliusanything's picture

Money printing does have blow backs and yes it will be savage. Thank you Ben Bernake you wanker!!


yogibear's picture

Shooting for average PEs of well over 100. CNBC will be calling the market cheap all along the way.

BallAndChained's picture

Based on FANG stocks, fraudulent bot click ads and no earnings with crazy high P/E.


Dragon HAwk's picture

Debt repayment will crash, not the stock market, I am not sure how that will unfold, but there is too much debt.

yogibear's picture

Debt repayment is a fantasy.

The reality is devaluing the currency makes the debt/bond holders worthless.

Dragon HAwk's picture

Ok the illusion of debt repayment

RightEdge's picture

"There's just one thing wrong..." There's a lot more than just one thing. There's at least $20 Trillion wrong, for starters.

yogibear's picture

Soon to be:

$40 trillion - Less than 8 years from today

$80 trillion -  less than 16 years from today


Mentaliusanything's picture

Question? if $80Trillion is created and money is debt whats the Vig at X% for repayment.

It ends when the last fish is eaten and the last tree has fallen.


seattleslewsz's picture

Everyone on here keeps trying to call the top and it is beyond ridiculous.  Only analsyts associated with ZH is the guys from SW


proof is easy to find https://www.facebook.com/permalink.php?story_fbid=10155108125820326&id=166578775325

Overleveraged_and_Impatient's picture

The fact of the matter is that when money is created out of thin air, it has to go somewhere. It goes directly into the S&P 500. You see, these valuations are here because unlike all previous bull markets, the world Central Banks have been printing relentlessly with finger on the "buy" button.

Plenty of level headed people and analysts have been calling for a crash since 2011. The fact is there is NO crash coming. We are infact more likely to crash UPWARD to 5000. This is because trillions of dollars will be entering the market in the next few years. It's not going to stop.

Trump is not stupid, Yellen is not stupid. Nobody is stupid. They KNOW what will happen the moment they actually take their finger off the print button. The markets would crash 50 - 70% percent. They KNOW this rally is based on nothing but balance sheet expansion. So knowing what they know, WHY would they stop printing? What benefit in 2017 would there be to stop balance sheet expansion and stop creating new money?

They all know the market is on thin ice and they all know that this montain will come down unless they artificially keep it up. So in order to avoid pain, they will keep fresh money flowing in. Do you want to bet against this? Do you think they will simply stop artifically creating money and pumping it into the S&P 500? They will not stop. This will go on Indefinitely.

This is why I am 3x Long Leveraged S&P 500. I have been pouring all my savings into it since last Winter. I am up massively on the year, almost $59,000. I will be quitting my job soon.

WTFUD's picture

Best double down on the deluxe tent pegs then , it's hurricane season.

cheech_wizard's picture

Color me curious... How long is $59,000 going to last? Better question, how much will you have left after taxes and how long will that last?

Standard Disclaimer: I agree with your premise. They will print until they run out of ink and paper.

Mr 9x19's picture

infinite printing, ok, infinite using dollar, no that much.

situation is somewhere between the 2.


tip : it ends badly.

FreeShitter's picture

Why would you quit your job if you only have 50-100K saved? Thats not much to retire on unelss u live in a trailer park. I agree they wont stop printing, they cannot and must not.  I would suggest rental properties, great monthly  income. 

Overleveraged_and_Impatient's picture

Where, in Naples, FL?


Hilton Head?

omniplastic's picture

The Fed already stopped printing.  It's the ECB that is still printing.  I think you're thinking about net world central bank balance sheet increase.  Even if you're bullish, it doesn't seem wise to be wildly long here.  Even if you think there won't be a big crash, pull backs and consolidation periods are natural.  Why not listen to what the Fed says there're going to do?  For years they have been pretty transparent about their intentions, and then they follow through sooner or later.  

ArthurDaley-OldieTimeTrader's picture

Don't forget the Swiss National Bank. They can Control + P with a new more valuable currency the "Swissie" and they've been buying AAPL the insanity will continue until it can't..


One more thing Omni when the Fed tries to normalize rates the markets will slide and the Central Banksters can't leave party with a sliding market. "You can't go to the Airport and downtown at the same time in a single cab" TM

yogibear's picture

Sure, they have to keep printing and buying stocks. William Dudley's  (NY Fed) plan has always been to support stocks. They are trapped with no way out, no exit. Like the roach motel. Just more QE injections to buy stocks to keep the facade of a healthy economy.

0valueleft's picture

So were increasing our nuclear capacity and expanding our military, because we expect the East to accept this behavior? It's not incase some other world power attacks us, it's incase they continue to ignore us and continue to find ways to work together without the liability of of debt bassed currency we force upon them.

If you had said this in 2008 when the sky was falling, I'd give you credit, now, not so much. Never go full retail.

Games Without Frontiers's picture

I agree central banks will print until their eyes bleed, but that doesn't gauantee stock market returns. Hard assets always do best against currency debasement.

BallAndChained's picture

If markets are up because of CB buying, then when the Fed anounces the start of balance sheet reduction, that will be the Beginning of the End.


WTFUD's picture


DennisR's picture

Where's the growth part?

FreeShitter's picture

That stopped decades ago.

max2205's picture

Dance fucker the music is still playing 

The Duke of New York A No.1's picture

The FED can't get inflation on Main Street, becuase it's been going into Wall Street.




Juggernaut x2's picture

Imagine the economy if these assholes suspended the income tax for anybody making less than $100K and applied those trillions to make up the difference on those unpaid taxes- get that money flowing through the real economy. Check out the FRED M2 Velocity chart for a real eye opener.

yogibear's picture

It's hit mainstreet in the form of high rents, higher asset prices.

Pollygotacracker's picture

EPS declining as stock prices continue to rise. Looney.

holdbuysell's picture

QE is dead! Long live QE!

Cabreado's picture

This devolution process is gonna take a while...

Markets valuation is frightening...

Come hell or high water, a new equilibrium is coming.


MK ULTRA Alpha's picture

Buy Silver Eagles. At $80 sell, buy gold. Silver per percentage gain moves up faster compared to gold. It is a known strategy.

Last meltdown, silver was around $38 during QE 1-4 liquidity injections. Now, after massive liquidity, silver could go to $150 in a meltdown.

protect yourself because most are oblivious to risk and we often forget past market meltdowns.

100 ounces now-$2000, meltdown 100 ounces $8000 to $15,000.

wstrub's picture

The market is a pure measure of how much the dollar is down.

Let it Go's picture

The global wide "money printing debt binge" we are witnessing is far from normal or like anything we have ever seen before.

Even as the market has forged its way into new territory the new highs have done little to alleviate the concerns of many investors that something is very wrong. More important than how the economy appears to the casual observer is the strength of the foundation on which it's built.

While growing debt and expanding credit have moved demand forward we should not delude ourselves into thinking it will be repaid. The article below delves into how much of this debt will slip into default exacerbating future problems.


Zorba's idea's picture

8+ Years without Price Discovery...Just how do they do that Batman?