NOURIEL ROUBINI BLOG tracks the media appearances of Dr Nouriel Roubini his interviews articles debates books news speeches conferences blogs etc..Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics
Monday, October 26, 2020
👉The Mother Of All Stock Market Bubbles -- Prepare for a Volatility Burst
👉The Mother Of All Stock Market Bubbles -- Prepare for a Volatility Burst
The US stocks continue to trade as though the world is expanding apace rather than wallowing in the worse economy since the Great Depression.
Fed stimulus can only last so long. A Day of Reckoning is coming, and only unjustified euphoric optimism stands in its way. Subsidies are temporary measures and not permanent solutions. The market can remain irrational longer than you can remain solvent.
Or perpetual Fed fake money could push stocks ten times higher.
So, one must hedge accordingly.
But it will implode. On a long enough timeline, the survival rate for everything drops to zero.
It is not a bubble if it doesn't pop.
The pin is approaching.
The form of it will be rioting and massive property damage. Housing meltdown 2.0 upcoming.
More shoes to drop.
1) employment is a lagging indicator that has to see improvement. There is the suggestion that the count is off as discouraged seekers drop off of the count, not even mentioning white collar.
2) all sorts of debt to deal with car, housing, credit card, etc.
3) zombie companies who may run out of funds The unknown known is the trigger. The house is packed with gasoline, propane, dynamite, and some A-bombs, just like February. The results will be similar, maybe worse. At this point, who knows? The numbers for just about everything are so jacked around.
Unemployment will rise to 90%, as 10% of the population captures 99.999% of all wealth. Fed will keep printing up money for itself to keep The military-industrial complex going, totally disconnected from the stock market. The stimulus is just stealing from the future - making the future that much bleaker. Eventually, the piper will have to be paid. It's all matter of how long you believe central banks can keep this baby propped. The longer they do, the worse it will be when it blows!!
The upper portion of the "K" in the K shaped recovery will slide higher and higher up the vertical axis as fewer and fewer people experience recovery. 2022, the market will reach 120,000. Cashless and asset less society for 95% of society coming. Middle-class landowners are most at risk of confiscatory tax policies with out-of-control governments.
One never truly owns land with property taxes due.
Crash and burn. Unless it is Precious Metals, all will crash when the bubble burst.
One more reason for taking massive multi-Billion dollar low rate loans out to chase an already failed rate of return for pensions like California is INSANE and should already be criminal. If there market crashes, most pensions are screwed already, let alone then having to default loans against assets in massively underfunded criminality.
How could the S&P 500 be trading at its highest multiple in 70 years when the growth rate of corporate earnings has been sinking for more than two decades?
Simple Answer: currency debasement in process. Buy hard assets.
All that matters is the spigot flow from the fed. Nothing else. All S&P 500 companies can go belly up, but if the fed is funneling trillions in, the party continues. Money has to go somewhere, even if it is worthless. Buy in or get ruined by inflation. The system is what it is, and the federal reserve is making this the reality of the day.
Printing $100 TRILLION in fiat currency, it does strange things to asset classes. Think of it is fetid floodwater rushing into a field - every log and corpse not weighted down must rise.
Send the quadrillions in.
We will soon be doing more QE than what we collect in taxes.
We are now in Bailoutism - the new central bank driven world order.
Stimulus spending is just shuffling chairs on the Titanic. It doesn't improve the bottom line.
We are Zimbabwe, my friends. Trillion-dollar companies in the end, not the beginning. Keep buying real assets.
Buy hard assets and put some Monopoly money in the market to buy more hard assets. All I’m doing it.
Bubble, bubble, bubble.
Definitely, Something big is coming.
Welcome back to The Atlantis Report. You are here for your daily dose of the truth, the whole truth, and nothing but the truth. Please take a second to click the like button. Many of you have asked me where they can buy silver and gold bullion.
You will find in the description box the links where you can buy American Silver Eagle, Silver Bars, or Rounds. I highly recommend that you start stacking some Silver Bullion for the future.
We know that this disconnect from reality can't be good. We have more money printed than ever before. We have a Fed that has said they will stop destroying money, we have a government that wants to print money even though we have great growth, yet the bond market is maintaining a low, low rate. Every action taken is pointing to major inflation; who is buying these bonds at this level? This is a red flag that either the market is being manipulated or that people are buying safe havens without understanding what events these assets don't protect from.
Never before have we ever had this degree of intervention to artificially inflate/prop up the asset prices - so never before have we had this degree of disconnect between the fundamentals and asset prices. As bad as earnings are, what would they look like without endless debt expansion and other forms of stimulus to support aggregate demand (and corporate profits) - all of which are just stealing from the future. Eventually, the level of the economy will have to drop back down to what earned income can support (without stimulus). In fact, it will have to drop down to a level that is below that as we will have to pay back the stimulus (either in the form of debt reduction or reduced purchasing power of our earned income). The economists of this world simply believe that their discipline is not subject to the laws of the universe - especially math!!!
At current overvaluations, the entire US market will return zilch for a decade or more. There's a 10% chance of that, says CAPE correlation. There's only a 1% chance it will return 10% per year average like it just did. It will be more like the lost decade of the 2000s than the crazy multiple booms of the 2010s. Can't argue with math. If you think about it, it's pretty obvious. The US would need to DOUBLE or more its historic economic growth, and the price-earnings ratio would need to settle at a permanently high plateau just for it to tick along at the average growth rate. Everything right now is looking more like 2% or less growth, and the price-earnings ratio reverting to a mean of 20 or less. Ten years from now, the S&P could have, therefore, reached the lofty heights of 3500. As for small caps, speculators gonna speculate.
Value line's take 10/30.
The Election: Here, as well, the stakes are high from both economic and regulatory standpoints, and the picture is murky, with the outcome of the Presidential contest, now just days away, perhaps in doubt until well past Election Day. Control of Congress is also up for grabs. Corporate Earnings and price-earnings Multiples: So far, third-quarter earnings are coming in better than expected. Still, a number of companies are warning of possible disappointments down the road. All the while, high earnings multiples, exceeding a median of 21 in the Value Line universe, are unsettling investors. Nevertheless, markets are persevering for the most part. We think this overall resilience reflects the fact that the Federal Reserve is pulling out all stops to keep the economy rolling. Also, attractive alternatives to equities are hard to find in a low interest-rate environment.Conclusion: We think investors need to stay calm but also alert to developments. My note: if one is going to panic, panic early.
This market is ALL smoke and mirrors. What is real, and what is Fed-induced? The real market is on a ventilator, and without stimulus, it will die painfully. How long can the country print money and give it away to prevent what will happen anyway and cause us untold problems down the road? I would like to hear one person say we have a spending problem. All I hear is to hell with the budget spend spend spend. Am I the only one left who worries about the future? The market is a drug addict. Happy when it gets stimulus and ugly when it does not get its fix. BEWARE THE FUTURE AS WE HAVE SPOILED THE PRESENT.
The idea that the federal government can just keep throwing out trillions of dollars with no accountability or no way to pay for it is a fool's trap. The idea that the government is going to increase taxes on corporations but then, in all its wisdom, will spend trillions on economically smart producing assets is like buying a beautiful lot of land in a Florida real estate brochure and then find out afterward you just bought swampland.
A healthy and efficient business does not need stimulus or any kind of help; Period. They should have saved for rainy days. By keeping zombies alive, FED inflated a bubble that is now beyond repair. When an avalanche strikes, no tree is safe, healthy, or diseased.
Trillions in funds doled out by the Federal Reserve and the government directly have helped to paper over some of the big financial problems created by the pandemic. Not to mention the titanic issues that existed before the pandemic.
Debt 27 Trillion, running debt increase 2Trillion year-over-year, US dollar printing 3 Trillion year-over-year.
Declining value 49% year-over-year.
And wait until student loan payments become mandatory again. The house of cards will collapse.
$1.8 Trillion stimulus shot down by Senate. This stimulus talk will most likely keep repeating with nothing ever getting passed.
US Dollar is even as bad as the Bolivar.
Dear Federal Reserve,
For the sake of Humanity and mankind, can’t you please just Stop? The economy is getting worse thanks to you; you monetize the debt, the dollar is in its slow death as the growing national debt says so, you’re making the majority of the people's lives more miserable trying to take credit putting the fire out you started that you never finished. The rot of your establishment has a growing stench that is literally choking the public, and you have dumb rich people believing in your lies every time you have a summit. Lying Powell says they are letting inflation rise, for they have no control over. The Federal Reserve has formed into a financial crime organization. Please let the free markets operate on their own, stop being a painful influence, and please do the right thing and die. Take one giant step for mankind off of a cliff and knock down that terrible looking structure on Constitution Ave; since the Federal Reserve isn’t constitutional anyways.
This is a test of Modern Monetary Theory and the transition to a cashless society. They are attempting to rewrite the rules on economics and bring in a new ruling style to the world. Looks like it's going smoothly; put your mask on and listen to the elites; they have their best interests in mind.
A ten percent pullback would be just another blink of an eye. Buy and hold, don't play Robin Hood.
This was The Atlantis Report. Please Like. Share. Leave me a comment. Subscribe. And please take some time to subscribe to my back up channels; I do upload videos there too. You'll find the links in the description box. You will also find a PayPal link if you want to make a donation. Thank you wholeheartedly to all those of you who have already donated. Stay safe and healthy friends!
The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more
Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment