Are US Equities In A Bubble?

By Rudi Fronk and Jim Anthony –  Re-Blogged From http://www.Silver-Phoenix500.com

As we have noted, there is a very important difference between a bull market and a bubble. Valuations are certainly one means of distinguishing them. In retrospect, we can recognize previous historic bubbles such as 1929 and 2000. When basic ratios such as Price-to-Sales and Tobins’ Q have reached the levels that marked these bubbles, as they have, we can make a reasonable inference that another bubble has formed.

But there are other measures besides valuation. The most characteristic indicator of a bubble vs. a bull market is that bubbles ignore risk. Bubbles don’t discount risk, they don’t sniff out the next recession, they ignore or even fight the Fed, they don’t fall when earnings do and they do not herd into the long end of the Treasury curve for safety.

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Blow Off Top…Could It Happen?

By David Chapman – Re-Blogged From http://www.Gold-Eagle.com

Every time we pick up some article on the stock market of late, all we read is the stock market is on the verge of a devastating wipeout, or that the next collapse is just around the corner. One of the best headlines we saw recently was from a famed market guru with a headline of “2017 Is Going to Be Worse than the Great Depression!” It is enough to make you run home, pour a long hot bath, slit your wrists, and climb in to the tub.

Okay, maybe that is extreme. Naturally, there are many reasons writers give to back up their case. Those range from the election of Donald Trump, Brexit, rising interest rates in the US, and of course the best one—that the bull market is now into its ninth year from the major low of March 2009 without a correction exceeding 20% and is in the mother of all bubbles. All of that is true. But none of that makes for a final top just because the stock market has been rising for eight years plus.

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Here Comes Quantitative Tightening

By Peter Schiff – Re-Blogged From http://www.Silver-Phoenix500.com

All of a sudden the Fed got a little tougher. Perhaps the success of the hit movie Wonder Woman has inspired Fed Chairwoman Janet Yellen to discard her prior timidity to show us how much monetary muscle she can flex when the time comes for action.

Although the Fed’s decision this week to raise interest rates by 25 basis points was widely expected, the surprise came in how the medicine was administered. Most observers had expected a “dovish” hike in which a slight tightening would be accompanied by an abundance of caution, exhaustive analysis of downside risks, and assurances that the Fed would think twice before proceeding any farther. But that’s not what happened. Instead Yellen adopted what should be viewed as the most hawkish policy stance of her chairmanship.

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Falling Rocks In The Promised Land

By Gary Christenson – Re-Blogged From http://www.Gold-Eagle.com

Yes, traumatic market events (falling rocks) occur, even though markets are “managed,” statistics are manipulated, and politicians pretend to care about something besides their next election.

From John P. Hussman, Ph.D. Fair Value and Bubbles: 2017 Edition

“Unfortunately, investors seem to have concluded that central bank easing is omnipotent, despite the fact that the Fed eased persistently and aggressively, to no effect, through the entire course of 2000-2002 and 2007-2009 market collapses.”

From Bill Gross: Bill Gross Says Market Risk is Highest Since Pre-2008 Crisis

“Central bank policies for low-and-negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks, and insurance companies, according to Gross.”

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Ultra-Low Volatility…This Time Is Different…?

By Axel Merk – Re-Blogged From http://www.Silver-Phoenix500.com

We increasingly see claims low volatility in the markets may be structural. Even as we agree that some of the analyses we see make good points, we are concerned we may be setting ourselves up for a major shock. Let me explain.

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Mile Markers On The Road To Ruin

By Gary Christenson – Re-Blogged From http://www.Gold-Eagle.com

As discussed in the James Rickards book “The Road to Ruin” and elsewhere, we know much is currently wrong with our financial world.

  • The official US government debt is nearly $20 trillion. Unfunded liabilities are 5 – 10 times larger. Debt has doubled every 8 – 9 years for decades – since the Federal Reserve was put in charge of devaluing the dollar. Debt will continue to grow, obviously out of control.
  • Millions of Americans are out of work, regardless of the official statistics.
  • Prices increase, some rapidly, regardless of the official statistics on consumer price inflation.
  • More government spending and debt are looming on the horizon. New and escalating wars are likely. Expect more deficits, debt, and inflation.
  • The U.S. stock market is selling at all-time highs, levitated by “easy money” and unsupported by fundamentals or breadth.

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Robert Shiller is Worried

Re-Blogged From http://reports.pmcapital.com.au

Legendary Economist Robert Shiller is Worried. Maybe You Should Be Too.

Robert Shiller, renowned economist, Yale professor and Nobel Laureate, is worried about the over-priced stock market.  So much so that he is refraining from adding to his own stock positions. One factor, among many, that he says makes him nervous is the CAPE ratio. A recent Bloomberg article notes that while the CAPE metric is still about 30 percent below its high in 2000, it shows stocks are almost as expensive now as they were on the eve of the 1929 crash. “The market is way over-priced,’’ Shiller says. “It’s not as intellectual as people would think, or as economists would have you believe.’’