This is the end game of unfettered capitalism. The signs are all here. When you cast aside reasonable restraints, the unscrupulous among us will rise to the top and exploit everyone else. What we have left is a new American feudalism where CEOs move around like a pack of ruthless Somalian warlords. Riding behind the banner of efficiency, they replace employees with robots, outsource their work to foreigners and tell their employees to train their own replacements, and collude with hedge fund managers to strip companies of their most valuable assets to temporarily boost the stock price.
There are many half-truths perpetrated on individuals by Wall Street to sell product, gain assets, etc. However, if individuals took a moment to think about it, the illogic of many of these arguments are readily apparent...
As has been noted frequently in the past, most of the business news posted by the mainstream media is a collection of economic fairy-tales which utterly pervert what is actually taking place, most particularly with respect to reporting on the Western bloc. Occasionally, however, we will get some sort of mild, pseudo-confession, which gives us just a glimpse of the economic carnage in these once-prosperous/once-affluent societies.
The somewhat farcical journey home from Europe for Secretary of State John Kerry continues. As we noted previously, after breaking his leg on an arbidged Tour de France'-esque accident in which he hit a curb, he was flown to Geneva in a helicopter where he was "stable and never lost consciousness," which makes sense (unless as many have suggested his brain lies considerably lower in his body than most humans). But then the escapade got beyond unreal as The White House sent a massive "specially-equipped" C-17 airplane (used to carrying over 100 combat troops and equipment into battle) to fly him to Boston for surgery. We assume he is covered by Obamacare, since the cost of this rescue mission - assuming roughly 10 hours flight-time - is at least $250,000... and all to avoid an Iran deadline no one expects to meet...
Markets are not cheap by any measure. If earnings growth continues to wane or interest rates rise, the bull market thesis will collapse as "expectations" collide with "reality." This is not a dire prediction of doom and gloom, nor is it a "bearish" forecast. It is just a function of how markets work over time. This time is "not different." The only difference will be what triggers the next valuation reversion when it occurs.
It’s not monetary easing, but the attitude of investors toward risk that distinguishes an overvalued market that continues higher from an overvalued market that is vulnerable to vertical losses. That window of vulnerability has been open for several months now, and the immediacy of our downside concerns would ease (despite obscene valuations) only if market internals and credit spreads were to shift back toward evidence of investor risk-seeking. Eventually, the final refuge of speculation is to abandon historically reliable measures wholesale, resting faith instead on the advent of some new era in which the old rules simply don’t apply.
"I would be more than happy to see the cradle of democracy put the imperial autocrats and financial kleptocrats in their place, teaching them a thing or two about enlightened self governance."
Along with the privilege of leadership, comes responsibility. The entire financialized abominNation is a national disgrace.
"we're beyond the point of being able to successfully manage this... and I worry about another leg down in the economy causing social disruption."
"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money. Warren Buffett is making a big mistake."
"Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power," Bloomberg reports, in the latest example of the world's ultra-rich not practicing what they preach.
"when I say that, I’m not saying that because I dislike hedge fund managers, or I think they are evil, I’m saying that you’re paying a lower [tax] rate than a lot of folks who are making $300,000 a year... There’s a fairness issue involved here. And by the way, if we were able to close that loophole, I could now invest in early childhood education to make a difference. That’s where the rubber hits the road. That’s … where the question of compassion and ‘I’m my brother’s keeper’ comes into play. And if we can’t ask from society’s lottery winners to just make that modest investment, then really this conversation is for show."
"The median stock in the S&P 500 is the most expensive it has even been (for as long as we have data). That's never a good sign! If your favorite valuation indicator is not at 'the highest ever', then it is likely now at 'the highest ever except 2000'. That's not good company unless you are a short seller."
- Ed Miliband, Nick Clegg and Nigel Farage resign as Tories sweep to victory (Telegraph)
- Bonds and stocks rebound, sterling soars after UK election (Reuters)
- Cameron Set to Return With U.K. Majority as SNP Sweeps Scotland (BBG)
- Tory win brings marked EU exit risk (Reuters)
- Why did Labour lose this election? It never tried to win it (Telegraph)
- Stock Buybacks Hit New Records (WSJ)
- Hard Money Comes Easy as Wall Street Funds Home Flippers (BBG)
- Justice Department to Investigate Baltimore Police (WSJ)
- Saudi Arabia mulling land operations on Yemen border (Reuters)
It seems yet another hero of the recent cyclical bull market, resp. echo bubble, may be in danger of falling from grace. This has already happened to his predecessor Alan Greenspan, who has been gradually demoted from “Maestro” to “irresponsible bubble blower”. In this sense the somewhat less praise-laden verdicts that are lately emerging with respect to Ben Bernanke could be seen as an early warning sign.