Fri SEP 14 18
SIT EC y POL
ND denounce Global-neoliberal debacle
y propone State-Social + Capit-compet in Econ
"Cajun Navy"
deployed; over 500 calls for
assistance
….
….
ZERO HEDGE ECONOMICS
Neoliberal globalization is over.
Financiers know it, they documented with graphics
Chinese stocks slipped lower
once again with CHINEXT (China's tech/small cap index) tumbling the most to its
lowest since August 2014..
European Stocks rallied
though led by Italy and Spain
Trannies outperformed among
the US majors while Small Caps lagged - though all closed the week higher...
S&P 2900 was defended
again despite the tumble on the heels of Trump's trade tariff headlines...
See Chart:
FANG Stocks managed to hold
gains on the week...
See Chart:
Outperforming Financials
once again...
See Chart:
Flattening the curve notably on the
week...
See Chart:
The Dollar ended lower on
the week...
See Chart:
Offshore Yuan fell for the
3rd week in a row - after its brief respite - to its weakest weekly close against the dollar since
May 2017...
See Chart:
Emerging Market FX rallied
broadly on the week...
See Chart:
But Brazil and Argentina
struggled...
The Argentine Peso closed at
a new record low..
See Chart:
Finally, we note that 'hard'
US macro data (i.e. not 'soft' survey data), tumbled for the 8th week in the
last 9 to its most disappointing since Oct 2017...
See Chart:
….
….
----
----
Hedge fund net leverage had continued to
decline steadily during recent months, even as the S&P 500 recovered to
within 1% of its record high.
Last
week we
discussed why even as the stock market ramped to new all time highs,
hedge funds found themselves badly underperforming the S&P, and are now not only more than 5% below their January highs, but
remain red for the year near the worst levels for 2018.
See Chart:
…
…
See more
interesting charts at:
----
----
The flow winners since 2008 illustrate investor desire for safe haven (cash, gold), yield (EM debt, MLPs),
growth (tech) & QE (banks & Japan) themes.
See Chart:
…
----
----
“Most people get interested in stocks
when everyone else is. The time to
get interested is when no one else is. You can’t buy what is
popular and do well.”
One of the ongoing thesis behind a continuation of a bull market
from current valuation levels is that there has been a permanent shift higher
in valuations due to changes in accounting rules, propensity for share
buybacks, and a greater adoption by the public of investing (aka ETF’s).
This apparent shift to
valuations is shown in the chart below.
See Chart:
There are two important things to
consider with respect to the chart above.
- The shift higher in MEDIAN valuations was a function of falling economic growth and inflationary pressures.
- Higher prices were facilitated by increasing levels of leverage and debt, which eroded economic growth.
The chart below tracks the
cumulative increase in “excess” Government spending above
revenue collections. Notice the point at which nominal GDP growth stopped
rising. It is also the point that valuations shifted higher.
See Chart:
Ed Easterling at Crestmont
Research made a great point recently in this regard:
“However, as real economic growth
significantly declined over the past two decades, it triggered a series of
adjustments that represent the forces behind The Big Shift. Most importantly, the downshift in
real economic growth disrupted the financial relationship of profits,
future growth, and market value.
Slower growth drives P/E downward for
similar reasons that it drives EPS upward.”
Of course, much of the shift upward to
EPS has been a function of wage suppression, buybacks and tax cuts more than
actual top-line revenue growth as I
discussed just recently. Ed continues.
“Therefore, since future economic growth
is expected to be slower, it is only consistent that the future average for the
market P/E will be lower. The new
normal growth rate (i.e., slower) for the economy will drive slower
overall earnings growth. Such
slower growth will drive market P/E lower, just as previously higher
growth supported the market’s P/E at a higher level.
The
inflation rate also drives the level of market P/E, but it occurs within the
range driven by the growth-rate environment. Higher inflation drives P/E lower; deflation
drives P/E lower. The level of P/E peaks when the inflation rate is low
and stable. Thus, while the growth rate drives the level of the P/E range,
the inflation rate drives the relative position of P/E within the
range.
Figure
6 illustrates these effects. The bar on the left illustrates the range for
P/E under a historically average level of growth. The bar to its right
illustrates the range for P/E under slower growth. Not
only does the range downshift, the expected long-term average P/E also
downshifts. This has major implications for analyzing the stock market.”
See Figure 6 Below:
Game charger: Effect of Slower Growth on P/E
“Going forward, we should expect a new paradigm. Slower growth drives the ranges for P/E
lower, which will affect future assessments of fair value. Keep in mind that, had real economic
growth averaged 2% instead of 3.3% over the past century, the
historical average for P/E would have been near 11—not 15 or 16. In the future,
the fair value for P/E when the inflation rate is low will be 13 to 15. With average inflation, expect P/E to be
near 11. During periods of high inflation and significant deflation,
expect the low range for P/E to be 5 to 8.”
With the markets still
currently trading near 30x earnings, a revaluation of markets will likely be
just as painful to investors in the future as they have in the past.
LET’S CATCH UP THE WEEKEND READING
LIST.
Economy, 2008 & Fed
- Overlooked Cause Of The Financial Crisis by Caroline Baum via MarketWatch
- I Just Don’t Understand by Scott Sumner via The Money Illusion
- Further Tax Cuts, Further Fiscal Irresponsibility by Committee For A Responsible Federal Budget
- The Real Cost Of The 2008 Financial Crisis by John Cassidy via The New Yorker
- The Recovery Threw The Middle Class Under The Bus by Nelson Schwartz via NYT
- 6-Signs We’re Closer To A Recession Than You Think by Sean Williams via Motley Fool
- Secular Stagnation by Roger Farmer via Project Syndicate
- 10-Years Later, What’s Changed by John Stepek via MoneyWeek
- Economic Bump Due To Stimulus by James Macintosh via The New Yorker
- A Misunderstood Case Of Poverty by Kevin Williamson via National Review
- Who Really Creates Value In An Economy by Mariana Mazzucato via Project Syndicate
- A Decade Later, Is The Global System Safer by Knowledge@Wharton
----
Markets
- Edwards: We Are Destined To Repeat Our Mistakes by Tyler Durden via Zerohedge
- GS: Warns Of Bear Market Approaching by Lu Wang via FA Mag
- Don’t Look At This Chart by Shawn Langlois via MarketWatch
- It’s Hard To Be A Contrarian These Days by Joe Calhoun via Alhambra Partners
- Tepper Has Been Cutting Stock Holdings by Mark DeCambre via MarketWatch
- Trends Being Tested by Dana Lyons via The Lyons Share
- What IS Market Breadth? by Simon Constable via WSJ
- Horrid Facts, Stubborn Facts by Robert Seawright via Above The Market
- Analyst Makes Rare Call To Buy Gold by Ryan Vlastelica via MarketWatch
- Ominous Pattern In The S&P 500 by Michael Harris via Price Action Lab
- Gundlach: Stocks And Bonds Could Be Burnt Out by Robert Heubscher via Advisor Perspectives
----
Most Read On RIA
- 3000 Or Bust by Lance Roberts
- We The People by Michael Lebowitz
- Employment: The Trend Matters by Lance Roberts
- 8-Steps To Fiscal Fitness by Richard Rosso
- The Bullish Bias Resounds by Doug Kass
- The Money Game & The Human Brain by Lance Roberts
----
Research / Interesting Reads
- It’s The Fed, Not Investors To Blame For Bubbles by Frank Shostak via The Mises Institute
- How Long Until “All Hell” Breaks Loose” by Tyler Durden via ZeroHedge
- End Offshore Corporate Tax Havens by Patrick Hill via The Progressive Ensign
- A Great Opportunity To Lose Money Is Coming by James Mackintosh via WSJ
- The Result Of Jack Asset Monetary Policy by Global Macro Monitor
- Are Americans Ready For The Next Recession by James Koren via LA Times
- The Next Recession Could Be In 2019 by Upfina
- BLS’ Job Rejiggering Doesn’t Compute by John Crudele via NY Post
- Yes, It Could Happen Again by Steven Pearlstein via Washington Post
- Feds Haven’t Fixed The Main Problem by Charles Gasparino via New York Post
- The Will Be The Mother Of All Minsky Moments by John Mauldin via Mauldin Economics
- The Real Goldfinger: The Banker Who Broke The World by Oliver Bullough via The Guardian
----
SOURCE:
----
----
US DOMESTIC POLITICS
Seudo democ y sist duopolico in US is obsolete; it’s full of frauds & corruption. Urge
cambiarlo
"For the President, who is Commander
in Chief, to act as the protective big brother of al-Qaeda and other jihadists
must be condemned by every Member of Congress” –Gabbard
----
----
Are you on the "allowed list"?
The media structure for blacklisting contrary opinions...
[[ Are neo-nazis taking control of
America? ]]
----
----
“beyond
inappropriate"
----
----
US-WW ISSUES (Geo Econ, Geo
Pol & global Wars)
Global depression is on…China, RU,
Iran search for State socialis+K- compet. D rest in limbo
A
$3 billion tranche from the IMF that was supposed to be disbursed to Argentina
this month under the country's bailout deal has been postponed while the
government hammers out the terms of the bailout agreement.
----
----
SPUTNIK and RT SHOWS
US
inside GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
----
----
----
----
----
----
----
----
----
----
RT SHOWS
----
----
----
----
----
----
NOTICIAS IN SPANISH
Lat Am NEW FOCUS: alternat to
neo-fascist regimes, breaks to HR, Peace & support to US-terrorism
----
----
----
----
----
----
----
COL Paramiltares
Amenazan a periodist y medios de comunicación
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
INFORMATION CLEARING HOUSE
Deep on the US political crisis:
neofascism & internal conflicts that favor WW3
Join Us In The Fight For Justice And Peace IF
YOU WANT PEACE WORK FOR JUSTICE
By John Pilger, Paul Craig Roberts, Pepe Escobar, Peter Koenig, Finian Cunningham, Andre Vltchek, Gilad Atzmon, James Petras and Dr. César Chelala Continue
By John Pilger, Paul Craig Roberts, Pepe Escobar, Peter Koenig, Finian Cunningham, Andre Vltchek, Gilad Atzmon, James Petras and Dr. César Chelala Continue
----
U.S. Protects Al Qaeda in Syria, Proved By Eric Zuesse Continue
----
Syria, Russia Right to End This War Editorial
Continue
----
Lynch Mob Mentality By Craig Murray Continue
----
Denouncing Obama By Professor Francis A. Boyle Continue
----
The Book: AMERICAN
TRAJECTORY: DIVINE OR DEMONIC? By Paul Craig Roberts
----
----
Central Banks Have Gone Rogue, Putting Us All
at Risk By Ellen Brown Continue
----
----
GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that
leads to more business-wars from US-NATO
allies
----
----
----
----
----
DEMOCRACY NOW
Focus on Trump policies & the Econ
& Pol crisis he creates
----
----
----
----
PRESS TV
Resume of Global News described by
Iranian observers..
----
----
----
----
----
----
----
----
----
----
----
----
----
====
No hay comentarios:
Publicar un comentario