Despite the title of this post, I won’t presume to call a market top for anything, particularly in an environment rife with artificiality. Asset bubbles include a regular feature of going a long way past any even semi-rational level of departure, before turning on some wholly unexpected event or parameter. However, if you were brave/foolish enough to look for one [...]
I have plotted a chart of the S&P 500 (taken from the research of Robert Shiller) for a particular period in time. It shows the sometimes tenuous relationship between stock prices and underlying earnings. Prices and earnings largely behave as you would expect in the first half of the chart above – prices anticipating changes in the earnings environment (economy) [...]
When I mentioned that Greenspan’s market has persisted long after his words fell from memory, that extended to overextended stock investors as well. By almost any measure, Ben Bernanke has outdone the “record” of his predecessor, yet he has so few quotable lines outside of those really bad predictions during the runup to the 2008 panic. Greenspan will be forever [...]
Apparently, we have clear sailing for another five years for stock prices: “We surveyed banks, we combed the academic literature, we asked economists at central banks. It turns out that most of their models predict that we will enjoy historically high excess returns for the S&P 500 for the next five years.” Sure, there are some weasel words in that [...]
The Conference Board’s Leading Economic Index fell slightly (-0.1%) in March. It was the first decline since last summer. Don’t worry, however, Conference Board economist Ataman Ozyildirim helpfully notes that, “the U.S. LEI dipped slightly in March, with equally balanced strengths and weaknesses among its components. The leading indicator still points to a continuing but slow growth environment.” Looking further [...]
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