Monthly Archives: September 2014

A “Hidden” Bear Market Is Brewing

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“In 2000, the ratio of market cap to GDP for the Wilshire 5000 (a good proxy for the US stock market) reached 153%.  This didn’t stop investors pouring money into US stocks… which went on to deliver a negative total return over the next 10 years.  Fast-forward to today, and the ratio of market cap to GDP for the Wilshire 5000 stands at 125%. That’s not as high as at the peak of the dot-com bubble. But it’s higher than at the 2007 peak of the recent credit bubble.  And it’s more than two standard deviations above the average – a measure legendary contrarian fund manager Jeremy Grantham uses to pinpoint a bubble.”

http://bonnerandpartners.com/hidden-bear-market-brewing/

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Bill Bonner: Dancing on Tables with Lampshades on Their Heads…

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“With the addition of Chinese Web portal Alibaba, there are now 44 start-ups preparing to enter the public markets. Each of these has a valuation of more than $1 billion.  The last time there was this kind of action in the IPO market was 2000, just before the dot-com bubble blew up. And the last time stocks were this expensive was 2007, when the subprime/finance bubble blew up.  That was also the last time share buybacks by US corporations passed the $600 billion mark, which they will do again this year.  Yes, dear reader, the party has gotten out of hand – thanks to all the free booze supplied by Ben Bernanke and Janet Yellen. It’s time to look for the car keys.”

http://bonnerandpartners.com/dancing-tables-lampshades-heads-market/

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Jeffrey Tucker: Why Imagining Freedom Is Essential

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“My whole experience suggests that personal inspiration is the ingredient lacking in the current generation of people who have come to love liberty. They have access to texts, knowledge, and theory as never before in human history. What they lack is a method for using what they know and the personal drive to do so. People are too quick to blame outside forces for failure without realizing that outside forces conspiring against progress are part of the structure of all environments in all times and places. This book provides that missing element, that key to brush away despair and unlock the inner drive to make a difference.”

http://tucker.liberty.me/2014/06/08/imagining_freedom/

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Obama Follows Bush’s Iraq Playbook

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“Obama speaks of protecting the American people. He means Americans both abroad and at home. Americans of course are free to travel anywhere. If the U.S. government is to have the power to protect or avenge them abroad, it will have to be able to exercise military power globally. Such imperial power, which the government has long exercised, should disturb peace- and freedom-loving Americans precisely because it creates the potential for perpetual war, invites retaliatory terrorism, and requires high government spending and borrowing. It may be taken for granted that a president can go to war when an American is killed overseas, but that kind of power is too dangerous to accept meekly.”

http://fff.org/explore-freedom/article/obama-follows-bushs-iraq-playbook/

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How Empires End

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“Histories are generally written by academics. They, quite naturally, tend to focus on the main events: the wars and the struggles between leaders and their opponents (both external and internal). Whilst these are interesting stories to read, academics, by their very nature, often overlook the underlying causes for an empire’s decline.  When the history is written about the era we are passing through, it will reflect, in large measure, a rehash of the news. As the media of the day tend to overlook the fact that present events are merely symptoms of an overall decline, so historians tend to focus on major events, rather than the ‘slow operations’ that have been the underlying causes.”

http://www.internationalman.com/articles/how-empires-end

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Breaking the last taboo – Gaza and the threat of world war

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“Since 2001, the United States and its allies have been on a rampage. In Iraq, at least 700,000 men, woman and children are dead as a result. The rise of jihadists – in a country where there was none – is the result. Known as al-Qaeda and now the Islamic State, modern jihadism was invented by US and Britain, assisted by Pakistan and Saudi Arabia. The original aim was to use and develop an Islamic fundamentalism that had barely existed in much of the Arab world in order to undermine pan-Arab movements and secular governments. By the 1980s, this had become a weapon to destroy the USSR in Afghanistan. The CIA called it Operation Cyclone; and a cyclone it turned out to be.”

http://johnpilger.com/articles/breaking-the-last-taboo-gaza-and-the-threat-of-world-war

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Profits and Asset Bubbles Everywhere?

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Anthony-Wile1

“Before long we may be minting the first trillionaires – and I can remember when we were still reporting on millionaires as significantly wealthy individuals. It’s just been announced, for instance, that Facebook is worth US$200 billion. These are ‘bubble’ numbers. If you’re out of this market, you may lose out on some phenomenal profits, not because the market is priced properly but because a confluence of interests is likely determined to continue to expand security prices. If you decide to ‘stick in,’ please take care to be allocated across numerous asset classes, including gold and silver. You can hedge positions via futures, options, etc. My bet is that this party ‘continues’.”

http://www.thedailybell.com/editorials/35643/Anthony-Wile-Profits-and-Asset-Bubbles-Everywhere/

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John Hussman: A Warning from Graham and Dodd

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“The fact is that the most reliable valuation measures we identify are generally within just 15-20% of their 2000 extremes, and are already at or beyond levels observed in 1929, 1972, and 2007. Of course, that same advance to extreme overvaluation is also what has raised the total return of the S&P 500 from 2000 until today up to about 3.9% annually. We believe that even that total return is transitory, and presently estimate negative total returns for the S&P 500 on every horizon less than 8 years. We encourage buy-and-hold investors to understand and mentally prepare for the potential depth of interim losses inherent in that strategy (we would presently allow 40-55%).”

http://www.hussmanfunds.com/wmc/wmc140915.htm

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Bernanke’s Helicopter, and a Note About 9/11

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“You won’t believe the idea that America’s quintessential foreign policy establishment organ is floating now.  Or maybe you will.  In its September/October issue, Foreign Affairs wanders away from the calamity of its interventionist foreign policy consensus to offer equally calamitous interventionist monetary advice.  The publication offers a piece instructing the Federal Reserve to give the money it prints directly to the people.  The Fed, according to this incompletely thought-out option, could generate consumer spending in this way, bypassing financial institutions like banks and employers altogether.  It is an idea of Keynesian absurdity.”

http://www.moneyandmarkets.com/bernankes-helicopter-note-911-65405

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Shocking Events — Past, Present and Future

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“Fifteen years ago, well before al-Qaeda’s first attacks on America, our tech stocks began to crumble. Over $5 trillion in equity value was wiped out. Our entire economy was temporarily paralyzed. And what’s worse, that crisis set off a tragic chain of economic events that also continue to ricochet through time …  Radical interest-rate cuts …  A great housing bubble — and BUST …  The emergence of a deadly debt crisis …  And now, the most risky and largest Fed money-printing operation of all time.  This chain of events has wiped out vast amounts of invested wealth; the hard-earned savings of millions of everyday Americans.”

http://www.moneyandmarkets.com/shocking-events-past-present-future-65272

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