Nueva Democracia: DEC 5 20 ND SIT EC y POL

DEC 5 20 ND SIT EC y POL

ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco

I recommend my readers to visit in the previous send (Spanish ++) :

1.Voltaire news

2.Information Clearing House &

3.Global Research

For US issues on WW3- Pandemia & other global issues

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ZERO HEDGE ECONOMICS

Neoliberal globalization is over. Financiers know it, they documented with graphics

NO, LOW RATES DO NOT LEAD TO HIGHER EARNINGS MULTIPLES: WHAT THAT MEANS FOR MARKETS

"We don’t yet know the results of an experiment in which rates rise and central banks cannot climb down because the economy is growing and inflation is back" but we may very soon have to find out.

With the S&P closing Friday at a new record high just shy of 3,700, which as we showed last week translates into a Shiller CAPE ratio now above levels where it was on the eve of the crash of 1929 for the first time since the dot com bubble...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/1929%20cape_1.jpg?itok=aH_tkmxE

... even Goldman has been forced to admit that stocks around the globe are at extremely elevated valuations relative to history not just on a forward P/E multiple basis...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/valuation%20vs%20history.jpg?itok=UqWkaFQg

... but across all valuation metrics...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/how%20overvalued%20are%20stocks.jpg?itok=vT8C3SFV

... with one exception: the equity risk premium, which is also used in the so-called "Fed model", both of which boil down to a simple concept: that low interest rates (and rates are now the lowest they have been in 4000 years of history) justify - and "allow" - high earnings multiples, implying that even if stocks are extremely overvalued since rates are at historic lows, investors have no choice but to keep buying stocks as there are no alternatives.

But is that true?

That's the question which Gerard Minack, of Minack Advisors, raised this week as Bloomberg's John Authers noted: do low interest rates on their own lead to higher earnings multiples?

Well, contrary to what Goldman, Morgan Stanley and virtually every other bank writes using the "Fed Model" as the only valuation-based justification for projecting even higher S&P500 targets in 2021 and onward (most banks predict the S&P will rise another 10-15% next year), Minack's answer is a resounding no: it’s not rational to bid up stocks just because rates are low.

Minack digs deeper to find that there is a curved relationship between rates and equities over time: when rates come down from very high levels, equity multiples tend to improve, but when rates then drop to very low levels, equity multiples fall because this generally means that the economy is mired in a recession.

The chart below from Minack maps the CAPE on one scale against the 10-year yield on the other for every month since 1925. It shows that the relationship between the two isn’t that strong. In fact, the best fit Minack can find, excluding the bubble dot-com years, has an R-squared of only 0.12, meaning only a weak correlation:

See Chart:

Valuation: never so high with rates so low

https://www.zerohedge.com/s3/files/inline-images/minack%20rates%201.png?itok=_7Z8JCCv

What if instead of nominal one uses real yields? Minack repeats his exercise to account for inflation, looking precisely at real yields which as one can imagine, are low present, but not historically unprecedented. As Bloomberg's Authers writes, this exercise gives a slightly better correlation, "makes the dot-com bubble look like more of an outlier and, sadly, also makes the current point look like more of an outlier." In short, while there have been a number of observations with 10-year nominal yields below the rate of inflation in the past, this is the most expensive that stocks have ever been during such a period:

See Chart:

Valuation: never so high with ( real ) rates so low

https://www.zerohedge.com/s3/files/inline-images/minack%20real%20yields.png?itok=EA3hcv8M

What is particularly notable is that not every market is an outlier like the US: the next chart, which uses nominal yields since 1987, compares CAPEs and 10-year yields for developed markets outside the U.S., emerging markets, and the U.S. While the US is clearly a bubble, stocks outside the U.S. appear to be reasonably valued given the level of interest rates. It is only U.S. stocks look wildly overpriced across most valuation metrics as even Goldman would agree:

See Chart:

Most markets de-rated as Yields fell

https://www.zerohedge.com/s3/files/inline-images/market%20vs%20yields.png?itok=30jPQfwc

CONTINUE READING & SEE MORE CHARTS AT:

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SOURCE: https://www.zerohedge.com/markets/no-low-rates-do-not-lead-higher-earnings-multiples-what-means-markets

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Billonaires are happy: if the market accepts their tax evasion, bitcoins are OK

WHY DOES BITCOIN HAVE VALUE?

Even after eleven years experience, and a per Bitcoin price of nearly $20,000, the incredulous are still with us...

In this article, I’m updating an analysis I wrote six years ago. It still holds up. For those who don’t want to slog through the entire article, my thesis is that Bitcoin’s value obtains from its underlying technology, which is an open-source ledger that keeps track of ownership rights and permits the transfer of these rights. Bitcoin managed to bundle its unit of account with a payment system that lives on the ledger. That’s its innovation and why it obtained a value and that value continues to rise.

Here we are all these years later and a single bitcoin trades at $18,500. The currency is held and accepted by many thousands of institutions, both online and offline. Its payment system is very popular in poor countries without vast banking infrastructures but also in developed countries. And major institutions—including the Federal Reserve, the OECD, the World Bank, and major investment houses—are paying respectful attention and weaving blockchain technology into their operations..

Hard lessons for hard money

To those educated in the “hard money” tradition, the whole idea has been a serious challenge. This is not how we expected money to be reformed.

There’s the problem: our expectations. We should have been paying closer attention to Ludwig von Mises’ theory of money’s origins—not to what we think he wrote, but to what he actually did write.

In 1912, Mises released The Theory of Money and Credit. It was a huge hit in Europe when it came out in German, and it was translated into English. While covering every aspect of money, his core contribution was in tracing the value and price of money—and not just money itself—to its origins. That is, he explained how money gets its price in terms of the goods and services it obtains. He later called this process the “regression theorem,” and as it turns out, bitcoin satisfies the conditions of the theorem.

Mises’ teacher, Carl Menger, demonstrated that money itself originates from the market—not from the State and not from social contract. It emerges gradually as monetary entrepreneurs seek out an ideal form of commodity for indirect exchange. Instead of merely bartering with each other, people acquire a good not to consume, but to trade. That good becomes money, the most marketable commodity.

TO CONTINUE READING OPEN THI SOURCE:

SOURCE: https://www.zerohedge.com/crypto/why-does-bitcoin-have-value

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There is not way to scape from inflation

BREAKEVEN INFLATION IS BREAKING OUT

Authored by Bryce Coward via Knowledge Leaders Capital blog,

Indeed, there exist multiple structural catalysts for inflationary pressure that haven’t existed in quite some time...

Inflation expectations as priced by the Treasury market are hitting 18 month highs just now. As the reader can see, inflation expectations across all treasury maturities are at cycle highs.

See Chart:

https://www.zerohedge.com/s3/files/inline-images/bfmBFED.jpg?itok=b212PvpD

This is happening coincident with growing expectations for the $908bn bipartisan stimulus deal and widespread expectations that the Fed will ease in some additional way at their next meeting 12 days from now.

There exist multiple structural catalysts for inflationary pressure that haven’t existed in quite some time:

de-globalization
USD which may be under continued pressure from massive twin current account and budget deficits
the possibility that US oil production has peaked, or at least will not grow as it did last cycle
raw material (especially base metal) inflation from the acceleration of green transport and power generation trends
demand-pull inflation from fiscal stimulus

Within the equity market, there are clear implications to a structural change in inflation expectations. If breakevens continue to march higher, it’s clear one wants a more cyclical tilt towards their portfolio.

See Chart:

US10Y breakeven inflation compared to S&P 500 materials vs consum-staples

https://www.zerohedge.com/s3/files/inline-images/2020-12-05_8-36-21.jpg?itok=WWm-0A7s

On the other hand, cyclicality does not equal value. This is apparent in the chart below in which I plot the relative performance of Pure Value vs Pure Growth stocks overlaid on inflation expectations.

See Chart:

US10Y breakeven inflation compared to S&P 500 pure value vs pure growth

https://www.zerohedge.com/s3/files/inline-images/2020-12-05_8-37-28.jpg?itok=O5sjNzAT

The correlation here is much, much less than the preceding chart. As I have argued multiple times in this blog, value as a style is highly dependent on the yield curve steepening. Because the Fed has telegraphed an inclination to push against back against higher long rates (yield curve control, forward guidance, etc.), a material and sustained steepening of the yield curve (i.e. one that lasts through the first half of 2021) doesn’t seem like a particularly high probability bet.

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SOURCE: https://www.zerohedge.com/markets/breakeven-inflation-breaking-out

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US DOMESTIC POLITICS

Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio

"I'M JUST NOT BUYING IT" - JEFF GUNDLACH RAISES QUESTIONS ABOUT COVID VACCINE'S '95%' EFFICACY RATE

"I would take this news more credibly if they came up with a vaccine and they said it worked, like, 53% of the time. There's something about that 94.5% that just looks fishy to me.

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CALIFORNIA SHERIFF SLAMS GOV. NEWSOM'S 'DICTATORIAL' LOCKDOWNS, WON'T BE 'BLACKMAILED, BULLIED OR USED AS MUSCLE' TO ENFORCE

"These closures and stay-at-home orders are flat-out ridiculous."

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TESTED 'POSITIVE' FOR COVID-19? BE SURE TO ASK THIS QUESTION

“What’s the Cycle Threshold (CT) value for that test?”

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El golpe de Estado es real.. se apunta al WW3 y CHINA-Iran-Ven are target 1

HEAD OF WORLD'S LARGEST SOVEREIGN WEALTH FUND FORCED OUT BECAUSE HIS WIFE IS CHINESE

"The Norwegian Civil Security Clearance Authority informs me that the reason that I will not receive a renewed security clearance is that my wife is a Chinese citizen and resides in China, where I support her financially."

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GEORGIA POLL OBSERVERS SAY THEY WERE EFFECTIVELY TOLD TO GO HOME

"A smaller crew continued to work through the night..."

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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)

Global depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo

More than health problem vaccination deal with avoiding capital loss in US-RU..

THE VACCINE RUSH IS A RACE AGAINST CAPITAL FLIGHT

The real agenda is now staring us in the face...

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MOSCOW HAS BEGUN FIRST EVER "LARGE-SCALE" COVID VACCINATIONS SATURDAY

Sputnik V vaccine now available at 70 different clinics across the city, with higher risk 'front line' groups going first...