Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Are you saying that the secular bear market that started in late 1999 / early 2000 only lasted 8+ years and that we are now in the midst of another secular bull market? Secular bull and bear markets tend to last around 16-18 years and the last one we had (1966-1982) was about 18 years while the bull market that followed lasted about 17 years until the tech bubble burst.
32% of Q1 U.S. smartphone sales involved prepaid phones, up from 21% a year ago, says NPD. That trend could spell trouble for AT&T (T) and Verizon Wireless (VZ, VOD), whose recent growth has been heavily tied to selling costly postpaid data plans. With 72% and 61% of the carriers' postpaid bases now respectively on smartphones, they face pressure to gain prepaid buyers without cannibalizing postpaid subs. Cannibalization fears have led AT&T and Verizon to make their prepaid plans 3G-only; Sprint (S) and T-Mobile (TMUS) offer 4G. A mix shift towards unsubsidized prepaid phones could also be a challenge for Apple (AAPL), estimated to have just 8% of the Q1 U.S. prepaid smartphone market (though that's up 4x Y/Y). [View news story]
Who offers the best plan for a husband and wife? I feel like Verizon is ripping us off but don't know for sure.
Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. [View news story]
I'm guessing he prints $85 billion a month for at least the next 3 months to coincide with the summer selling season of housing. Then I'm guessing he reduces purchases to $70 billion per month.
In the end though, it's just a guest. I just hope you think of me if something similar happens!
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Don't get me wrong, I'm happy about housing personally. I bought my first house in late 2011 and have truly benefitted from these historically low interest rates. If I really wanted to, I could probably sell it for about 13-18% higher than I paid for it so QE and ZIRP have been a home-run for me personally.
What is concerning is the increasing rate of growth over the last 6 months in housing prices so I hope they moderate some for stability's purposes.
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Another point was to support the housing market by allowing solid borrowers to refinance their mortgages (reducing interest payments so that they could pay down other debt, spend more money consuming goods/services, or save it) while also providing 1st-time home buyers with incredibly low rates. I bought my house in late 2011 with a fantastic mortgage rate though it actually concerns me how much it has apparently risen in value in less than 2 years (same for the equity markets).
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
I do see what you're saying but when was the last decade we didn't have a recession? Besides, after doing a quick google search, there have been 47 recessions since 1790 or a recession every 4.74 years.
Also, the current S&P 500 P/E is 19.23 while the mean over its history is 15.49 (and the median 14.51)...that means the P/E is about 24.5% above its long-term average, which is another bad indicator.
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
That's a fair point but then how do you explain then how do you explain the CAPE 10 correlation with the beginning and end of secular bull and bear markets?
And you are right that the CAPE 10 isn't the end all-be all. However, it makes me pay more attention that it is approaching 25 which, before the tech bust and fake housing led recovery, hadn't been reached since 1966 (at the beginning of a long-term secular bear market from 1966-1982).
That's still not the end all-be all but earnings growth has been declining for many quarters and top line growth has been even less impressive:
What I'm most concerned about is main-street retail investors jumping back into the markets, causing equities to become a supernova (during which the Wall St banksters and algos get out just in time).
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Hi David, thanks for the response and I should ask my question in a more detailed way: do you think the Fed will be able to correctly time their reverse of QE and its zero interest rate policy ? I am highly doubted because the Fed poorly managed rates in the mid/late 90's and was even worse in leaving rates too low for too long after the tech bust and 9/11 (which helped inflate the housing and Commercial Real Estate bubble).
Bernanke also famously said that the effects of the housing bubble popping were "contained" and that obviously proved to be terribly incorrect.
In sum, all of us are human and make mistakes. The Fog of Investing (like the Fog of War) is always present and that applies to the people and Bernanke who are running the Federal Reserve. I fear Bernanke will inadvertently quote one of my favorite songs, in 5 to 10 years from now, "If I knew then what I know now" (my favorite version is by The Faces):
Silver is cheaper so it has more industrial uses but according to the article, the first transaction involving gold dates back over 6,000 years.
I don't own any silver miners and own a few gold miners, miner ETFs, and coins...don't get me wrong though, I also own PSLV and have a limit order for SLW at $20.
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
Exactly and outside this secular bear market, the Shiller PE ratio hasn't been this elevated since 1966 (the start of the last secular bear market before the current one started in 1999):
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
While things could be worse, do you really think the high U-6 unemployment rate, low labor-force participation rate, and nearly non-existent wage growth since 2009 is something to truly like?
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
I think a better measure is the expansion of the Fed's balance sheet since 2007. It has increased about 361% since August 2007 and very well could see the total increase rise to above 400% by the end of the year. If I had to guess, the Fed won't stop QE in some form until the Fed's balance sheet is over $4 trillion.
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
Couldn't the Fed actually charge banks to park their cash with them? Not saying I agree with that policy but I don't know the exact answer.
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Well thought out post and my question to you would be, what will happen when money velocity returns? Will the Fed be able to withdraw liquidity in enough quantities and in a timely manner? The Fed is run by human beings so it's no wonder they left rates to low in the late 90's (and even cut them at one point) and made an even worse mistake in the 2000's (yes, I know hindsight is 20/20 but the general point is that the Fed is not infallible).
Or will money velocity never reach previous levels again? Doubtful but I can't say it's entirely impossible.
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
32% of Q1 U.S. smartphone sales involved prepaid phones, up from 21% a year ago, says NPD. That trend could spell trouble for AT&T (T) and Verizon Wireless (VZ, VOD), whose recent growth has been heavily tied to selling costly postpaid data plans. With 72% and 61% of the carriers' postpaid bases now respectively on smartphones, they face pressure to gain prepaid buyers without cannibalizing postpaid subs. Cannibalization fears have led AT&T and Verizon to make their prepaid plans 3G-only; Sprint (S) and T-Mobile (TMUS) offer 4G. A mix shift towards unsubsidized prepaid phones could also be a challenge for Apple (AAPL), estimated to have just 8% of the Q1 U.S. prepaid smartphone market (though that's up 4x Y/Y). [View news story]
Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. [View news story]
In the end though, it's just a guest. I just hope you think of me if something similar happens!
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
What is concerning is the increasing rate of growth over the last 6 months in housing prices so I hope they moderate some for stability's purposes.
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
Also, the current S&P 500 P/E is 19.23 while the mean over its history is 15.49 (and the median 14.51)...that means the P/E is about 24.5% above its long-term average, which is another bad indicator.
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
And you are right that the CAPE 10 isn't the end all-be all. However, it makes me pay more attention that it is approaching 25 which, before the tech bust and fake housing led recovery, hadn't been reached since 1966 (at the beginning of a long-term secular bear market from 1966-1982).
That's still not the end all-be all but earnings growth has been declining for many quarters and top line growth has been even less impressive:
http://onforb.es/113NEUh
What I'm most concerned about is main-street retail investors jumping back into the markets, causing equities to become a supernova (during which the Wall St banksters and algos get out just in time).
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Bernanke also famously said that the effects of the housing bubble popping were "contained" and that obviously proved to be terribly incorrect.
In sum, all of us are human and make mistakes. The Fog of Investing (like the Fog of War) is always present and that applies to the people and Bernanke who are running the Federal Reserve. I fear Bernanke will inadvertently quote one of my favorite songs, in 5 to 10 years from now, "If I knew then what I know now" (my favorite version is by The Faces):
http://bit.ly/15WJxSV
Will Silver And Silver Wheaton Keep Falling? [View article]
http://bit.ly/AlAjza
Silver is cheaper so it has more industrial uses but according to the article, the first transaction involving gold dates back over 6,000 years.
I don't own any silver miners and own a few gold miners, miner ETFs, and coins...don't get me wrong though, I also own PSLV and have a limit order for SLW at $20.
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
http://bit.ly/QqZ06c
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
The Myth Of Liquidity And Bubbles In Financial Markets [View article]
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
Beware Long-Term Damage From Stock Market Bubble Forming Now [View article]
Or will money velocity never reach previous levels again? Doubtful but I can't say it's entirely impossible.