Wednesday, November 23, 2016

Same Old Shit

We've seen this before. It happens every once in a while, but I think Jeff Snider from Alhambra Investment Partners says it the best:
1. Dollar doesn’t matter, indicates strong economy relative to the world
2. Dollar matters for oil, but lower oil prices mean stronger consumer
3. Manufacturing slump doesn’t matter, only temporary
4. Manufacturing declines are consumer spending, but only a small part
5. Manufacturing declines are becoming serious, but only from overseas
6. Maybe domestic manufacturing recession too, but the rest of the economy is strong
7. Rest of the economy might not be as strong as thought, but only an “earnings recession.”
By the time #8 appeared, which was growing acceptance that full-blown recession might be a very good possibility, it had been two years since the “dollar” first warned about the next global leg down. That difference, however, is important to keep in mind; 2014 was supposed to be the year that the global recovery was initiated, the long-awaited liftoff, but was instead beset by seemingly minor disturbances supposedly unrelated to the US as at least the “cleanest dirty shirt.” In truth, the US was just as dirty a piece of clothing as all others; the only actual difference was that by overlooking the grime the mainstream was able to wallow once more all over again in confirmation bias.
The fact that stocks are at record highs as the “dollar” disrupts still another time is as regular as the seasons. Stocks are fueled by hope which takes time for the “dollar” to disprove through first its own systems and then full economy; as it has time and again.
Excellent piece.

Perhaps like the shitty MSM bias of only reporting the good stuff, people generally seem very positive and upbeat about this eventual (but never here) recovery of the US which will be a boost to the global economy.

From the stats that I come across, it points towards the opposite direction. Anything bad is getting worse and anything good is approaching turning points.

Then again, you can't trust the MSM. Didn't like 99% of all news outlets not only predicted, but cheerleaded for a Clinton win? The MSM is bullshit and your best defence is just finding the FACTS and stripping away the OPINIONS.

PEs for the major indices are insane. DOW is at 21, Naqdaq is at 24, S&P500 is at 24 and the Russell... oh boy, the Russell is tricky.

If you check the WSJ which has all those PE ratios I listed above, the Russell shows a nil. Why? (more detailed explaination by Mish here) Because the Russell has NEGATIVE earnings. Guess what's the PE excluding negative earnings?


No, it's not 17. It's not 26. It's not even 72. Or even 172. Or even 726.

It's a freaking mindblowing 1726. (source)

All the valuation guys I follow are out and dumbfounded by this madness. Can the stock markets continue going up? Certainly. Will they remain at these levels? I highly doubt so.

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