On Wednesday, the consensus of the most reliable equity market valuation measures we identify (those most tightly correlated with actual subsequent S&P 500 total returns in market cycles across history) advanced within 5% of the extreme registered in March 2000. Recall that following that peak, the S&P 500 did indeed lose half of its value, the Nasdaq Composite lost 80% of its value, and the tech-heavy Nasdaq 100 Index lost an oddly precise 83% of its value. With historically reliable valuation measures beyond those of 1929 and lesser peaks, capitalization-weighted measures are essentially tied with the most offensive levels in history. Meanwhile, the valuation of the median component of the S&P 500 is already far beyond the median valuations observed at the peaks of 2000, 2007 and prior market cycles, while our estimate for 10-12 year returns on a conventional 60/30/10 mix of stocks, bonds, and T-bills fell to a record low last week, making this the most broadly overvalued moment in market history.
David Stockman, Reagan’s former budget director, has issued a major market warning for this Wednesday. He’s recorded a brand new 1-minute video describing a perfect storm happening this week. The historical evidence he’s provided going back to 1919 show a disturbing market pattern that’s proceeded every crash for 100 years.
David Stockman, Ronald Reagan’s budget director, and former Wall Street insider, joins Robert. Stockman uses clear language to explain why Trump is doomed, why income inequality will only get worse, and what you can do to navigate these uncertain times. Stockman and Robert lay out the roadmap that lead America to a cycle of economic bubbles. Find out why Robert and Stockman both believe the next crash will be the worse ever.
Donald Trump’s economic platform has sent stocks skyward. That’s great for anyone already invested in the stock market, and planning on selling soon. But anyone who has years before they cash in their 401(k) should beware: The Trump Bump will make it far, far tougher to make money in the stock market in the years ahead. It may even set some investors up for big, big losses.
WikiLeaks and Julian Assange would have gone down in history as the greatest enemies of government oppression of all kinds in any case, but their latest release – a comprehensive exposé of the US intelligence community’s cyberwar tools and techniques – is truly the capstone of their career. And given that this release – dubbed “Vault 7” – amounts to just one percent of the documents they intend to publish, one can only look forward to the coming days with a mixture of joyful anticipation and ominous fear. Fear because the power of the Deep State is even more forbidding – and seemingly invincible – than anyone knew. Joyful anticipation because, for the first time, it is dawning on the most unlikely people that we are, for all intents and purposes, living in a police state.
Today’s bland payroll report did little to suggest much of anything. All the various details were left pretty much where they were last month, and all the prior trends still standing……Whether we examine full-time employment or the labor force, there is no acceleration; in that Household Survey segment, for example, the gain in the estimated number of employees reporting working full-time is still slowing and to a truly significant degree. The average monthly gain was about 350k to start 2015, but now just over two years later full-time employment is averaging just 129k.
In a bout of irrationally optimistic expectations, investors and their advisors still seem to be assuming (or is it wishing and praying?) that it somehow will all come together. And the Trump/GOP economic policies may indeed all still happen even if they don’t occur as originally planned. But in light of the unexpected that’s already happened, several new possibilities need to to be added to Wall Street’s calculus. There are 5 economic policy-related events that aren’t currently being priced in by investors that will send severe shockwaves through the markets if they occur. Instead of a wrench, any of these 5 will throw a nuclear bomb into the GOP’s economic policymaking efforts.
Chronic Republican kvetching aside, the underlying problem with the Affordable Care Act, better known as Obamacare, was always one of economics. The law increased the demand for health care with universal access. It did nothing to augment supply: the quantity or quality of health care services. The promise to reduce costs defied the law of supply and demand.
The postage stamp country of Montenegro expected to be rushed into NATO during Washington’s lame duck period before the unpredictable Donald Trump became president. But Senators Rand Paul and Mike Lee, to their credit more concerned about America than wannabe foreign dependents, blocked ratification of the ratification resolution. The president should kill the measure.
Can you see those swans coming in for a landing on Pond USA? They’re not exactly black swans, because you knew they were out there circling, but they’re dark enough against the twilight’s last gleaming to give you the heebie jeebies. Troubles and portents of more trouble are stacking up as we approach the Ides of March zone of financial turmoil. You must surely surmise that a debt ceiling impact, a Federal Reserve interest rate hike, and the election of a Dutch anti-EU leader all scheduled for that one day are a good start on the greater unravel to follow.
In viewing the business media (and the talking heads that deliver their self-confident advice), it’s almost as if everything has been reduced to looking at charts and/or espousing superficial sound bytes that have little consequence (and even less than unique insights). The latter is a condition I refer to as being three miles long but only inches deep….