MAR 22 17
SIT EC y POL
ZERO HEDGE.
ECONOMICS
With the stunning run-up in markets
since 2009, investors can’t reasonably expect returns to continue at double
the long-term average. At a time of exuberance, it’s important to remember markets are cyclical. The other takeaway from
today’s valuations is that when the drawdown does
come, it will be severe.
…
Like we discussed last
month, with a proliferation of “record” highs in 2017, where are
market valuations at today? The five charts below paint the whole
picture best.
Chart #1: S&P 500
Price/EBITDA
Today, the S&P 500 price/EBITDA
sits at an all-time high.
Source: The Credit Strategist
This tells us that the current rally can be largely
attributed to “valuation expansion.”
Indeed, around 60% of the gains since 2009 have come from this source. At the same time,
earnings growth has been anemic. From
2012–2016, annual earnings growth was just 0.49%. In comparison, from
1995–1999, growth was 9.5%.
Chart #3: Total Market Cap/GDP
Warren Buffet’s favorite valuation metric, total market cap relative to GDP, currently stands at 130%—a
129% increase since 2009. This rise also brings the ratio to its highest level
since 2000.
Chart #5: The Complacency
Index
Margin debt making another “all-time high” signals the cycle
is in late stages when complacency takes hold. And surprise, surprise, that too
is at all-time highs.
Source: Bloomberg
In the past, when the complacency index was high, stocks
invariably saw big corrections shortly thereafter.
By most metrics, equities look pricey. But even with the bull market now
eight years old, sentiment continues to
be extremely bullish. So,
what are the takeaways from these lofty valuations?
Lower Future Returns and
Higher Downside Risk
To quote Warren Buffet, “The
price you pay determines your rate of return.” In a nutshell, this sums up what today’s valuations
mean for investors.
High valuation metrics aren’t indicative of an imminent
market crash. What they do tell us is that we must lower our expectations of
future returns.
While the correlation isn’t perfect, this chart shows a
higher CAPE ratio usually means lower future returns.
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Two rate
hikes since last year have weakened the dollar. Why is that, and what’s ahead for dollar, currencies & gold?
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.with 30Y yields dropping below 3.00% intraday and erasing
March losses...
The Dollar Index has erased 75% of its gains post-election...
Cable rallied after dropping in the terror attack...
Finally, as we noted earlier, the S&P's six-month cycle
is peaking...
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The
Bloomberg Dollar Index has given up almost three-quarters of the
post-Trump-election gains - having tumbled for 5 days straight. However, with
seemingly everything on the line in Thursday's Obamacare repeal vote, the USD index is within
1% of two crucial technical levels.
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US
equity markets suddenly dumped on heavy volume after House Freedom Caucus chairman Mark
Meadows, speaking after White House meeting, said there are still not enough votes to pass healthcare bill. .. only to
surge on a headline of Barletta flipped to support the bill.
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"The affordability constraints holding back
renters from buying is a signal to many investors that rental demand will
remain solid for the foreseeable future. Investors are still making up an above
average share of the market right now despite steadily rising home prices and
few distressed properties on the market,
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The
total value of student loans in America today is LARGER than the total value of
subprime loans at the peak of the financial bubble. And just like
the subprime mortgages, many student loans are in default.
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POLITICS
As the immigration debate goes on,
many commentators continue to sloppily ignore the
difference between the concept of naturalization and the phenomenon of
immigration. Immigration
results naturally from allowing persons to exercise their property rights. Naturalization, on the other hand, is a political act.
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WORLD ISSUES and ME
"If Europe continues this way, no European in any part of the world can
walk safely on the streets. We, as Turkey, call on Europe to
respect human rights and democracy,"
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GLOBAL RESEARCH
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INFORMATION CLEARING HOUSE
A
Breach in the Anti-Putin Groupthink By Gilbert Doctorow
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It's
Time to Dismantle Trump's Murder Budget and Defund Militarism By
Maya Schenwar
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COUNTER PUNCH
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SPUTNIK and RT SHOWS
British PM Addresses Nation After Deadly London Terror Attack https://sputniknews.com/europe/201703221051863253-may-addresses-nation-after-attack/
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The
business of war
US Cybersecurity Firm Wins Multimillion Army Space Command IT Services Contract https://sputniknews.com/military/201703231051868944-usa-cybersecurity-it-services/
RELATED
Boeing to Design Navy Destroyer Data Systems for South Korea, Australia https://sputniknews.com/military/201703231051868764-boeing-design-destroyer-korea-ustralia/
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Washington’s Cyber Investigator Tied ‘Russian Hacking’ to Non-Existent Events https://sputniknews.com/military/201703231051865883-washington-cyber-investigator-russian-hacking/ vendio su decencia academica por USD
RELATED
Ex-US Intel Operatives Demand Evidence of ‘Russian Hacking’ – If It Exists https://sputniknews.com/military/201701181049699962-us-intel-operatives-demand-evidence/
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Westminster Attack in London: Live Updates https://sputniknews.com/europe/201703221051849688-london-uk-parliament-shots/
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RT SHOWS
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WASHINGTON BLOG
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Democracy in America has become a
hollow shell. The conventional markers of democracy–elections and
elected representatives–exist, but they are mere facades; the mechanisms of
setting the course of the nation are corrupt, and the power lies outside the
public’s reach.
History has shown that democratic
elections don’t guarantee an uncorrupt, functional government.
Rather, democracy has become the public-relations stamp of approval for corrupt
governance that runs roughshod over individual liberty while centralizing the
power to enforce consent, silence critics and maintain the status quo.
Consider Smith’s Neofeudalism
Principle #1: If the citizenry
cannot replace a dysfunctional government and/or limit the power of the
financial Aristocracy at the ballot box, the nation is a democracy in name
only.
In other words, if the citizenry changes the elected
representation but the financial Aristocracy and the Deep State remain in
charge, then the democracy is nothing but a PR
facade for an oppressive oligarchy.
If the erosion of civil liberties and rising inequality
characterize the state of the nation, democracy is both dysfunctional and
illiberal. A state that strips away the civil liberties of its citizens via
civil forfeiture, a war-on-drugs Gulag and unlimited surveillance may be a democracy
in name, but it is at heart an oppressive oligarchy.
⇒ Keep Reading
⇒ Keep Reading
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NOTICIAS IN SPANISH
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ARG
Chomsky, y otros Intelectuales y
artistas del mundo preocupados por abusos de Macri
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Chile vs Bolivia: lo que nos faltaba G. Jiménez Solo hay 1 soluc:
darles salida al mar. Y un peligro: que el imperio use nuestro pleito para
vender su chatarra bélica y crear + guerras.
Quien invite al US será considerado enemigo común de los pueblos del sur.
Propongo construir puerto Boliv en ILO-Peru y reiniciar la carretera y via
férrea inter-oceánica que una Peru, Bolivia y Brazil. Que el comercio nos una
.. No el militarismo estúpido que drena economías del Sur. Juntos pidamos
condonación d deuda Ext.
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Pánico y caos: ¿Qué es lo que está
sucediendo en Londres? (PUNTOS CLAVE) A mi ver:
regresaron los mercenarios enviados a Syria por el US-NATO para apoyar el terror
Islamico y destituir a Assad. Estan probando su propio veneno. El USA teme lo mismo .. de allí la política “xenofobica “
de Trump. Nos gusta bombardear fuera (es buen negocio) pero jamás quisiéramos
que nos ocurra lo mismo. Nos olvidamos de la mínima decencia ética: “no
hagas a otros lo que no quieres que hagan contigo”
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Alepo
y Mosul, dos 'cunas' del terrorismo con destinos muy diferentes https://actualidad.rt.com/actualidad/233509-mosul-alepo-cunas-terrorismo-destinos
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Keiser
Report 1047 ¿Se avecina una guerra? El
polvorín está listo para estallar
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PRESS TV
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Putin:
Russian arms proved efficient in Syria
war
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Judge rules
freezing of Iran’s EU assets pirataje otra vez
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