Jim Cramer

Unemployment rate plunging? Job creation surging? Sure doesn't feel like that across America... this is why...

Once upon a time the health of the US consumer was gauged by one simple thing: how much credit card debt did US households take on in any given month. Which makes sense: American consumers would not go out and spend on credit unless they felt strongly about their future job, income and overall wealth prospects. In simple terms, rising credit card debt was synonymous with confidence and prosperity. In recent years, however, this metric has quietly fallen out of favor with the punditry, for one simple reason: that reason is shown on the chart below, which very likely also shows where the S&P would trade if it weren't for $11 trillion in central bank liquidity injections.

"Don't fall for the trap of myopically following yesterday's winners. Protect yourself, keep your powder dry, and wait for a better day. Think more about getting rich in 2020 or beyond... The Fed has turned the entire investing population into zombies (with a gambling addiction, I might add) wandering aimlessly in search of any tiny extra return to ravenously consume... This has left stock markets as elevated and overvalued as they’ve been since the dot-com mania (and more than they were in 1929 and 2007), which history has shown will likely lead to significant declines ahead."

While Jim Cramer went "all-in on oil stocks" in May 2014 (right before the collapse), it was the fracking sand-providers that were the most-loved stocks on many individual investors buying lists last year... until their worlds caved in. As WSJ reports, for many sand producers, this is their first time on the bucking bronco that is the cyclical energy business—and not all of them are ready for the wild ride. As one CEO exclaimed, "there are a lot of wide-eyed people out there right now in the industry."

Investors have never - ever - been less bearish about the stock market than they are in 2014...

World GDP Growth Expectations for 2015 just dropped dramatically to their lowest since expectations began to be tracked. From 3.40% in early 2013, the consensus is expectating world economic growth at a mere 2.72% (a 20% decline in growth expectations). Of course, there is one thing that is not going down...

As the S&P 500 pushes towards Goldman Sachs 2,100 year end target (for 2015!!) today, we thought it worth considering just how much awesomeness has been pulled forward, priced-in, exuberantly-chased. As the following charts show, based on bottom-up long-term-growth expectations, S&P forward P/E valuations have never been higher. But that's not all...

Two short weeks ago we warned of the looming 'profit recession' in the US on the heels of significant downward revisions from the Energy sector due to sustained low prices. While we assuredly will not do the 'told-you-so-dance' quite yet, perhaps all the professional hockey-stick extrapolators and 'smart money' should look away from the following three charts...

In October it was Jim Bullard's "QE4" hint that sent the stock market on an all-time record-breaking run of gains, which no lesser institution than the central banker's central bank - The BIS - lamented "the markets' buoyancy hinges on central banks' every word and deed." And then just two days ago, The Fed did it again: by the mere appearance of grandma Yellen (and the words "patient" and "considerable"), US stocks explode to their greatest back-to-back gains in almost six years. So it is perhaps ironic that no more mainstream media publication than USA Today has finally realised, there are no fundamentals anymore...

This week's Investors' Intelligence survey responses highlight the unprecedented reluctance of financial advisors to turn bearish...

Let’s see. Between July 2007 and January 2009, the median US residential housing price plunged from $230k to $165k or by 30%. That must have been some kind of super “tax cut”.

The global oil price collapse now unfolding is not putting a single dime into the pockets of American households - the CNBC talking heads to the contrary notwithstanding.  What is happening is the vast flood of mispriced debt and capital, which flowed into the energy sector owning to the Fed’s lunatic ZIRP and QE policies, is now rapidly deflating. That will reduce bubble spending and investment, not add to economic growth. It’s the housing bust all over again.

With The Fed due to make some highly amibiguous, always dovish promises this week, we thought a quick look at the world of stocks and bonds through the eyes of the Fed would be useful...

... it remains to be seen if market bubblemania on the back of central bank multiple expanion around the world can thrive, especially as corporate cash flow (and revenue, and GAAP EPS) growth trickles to a halt, coupled with an energy and junk bond market implosion, but when it comes to Barron's covers top-ticking the market, it is never different.