Economic Fantasies and Cycles

 
The chart above shows very clearly stock market behavior that has never happened before. 
Dow Most Overbought in 20 years
 
“single most extreme syndrome of “overvalued, overbought, overbullish” conditions”
 
Shiller warns stocks are partying like its 1929 
 
Is the market now bullishly positioned? 
 
At record highs its remarkable the economic fantasies you hear. Cycles become forgotten
 
“Cycles have always prevailed eventually” Howard Mark
 
Rule number one: most things will prove to be cyclical.”
Rule number two: some of the greatest opportunities for gain and loss come when other people forget rule number one.”
 
Has the cycle in paper reserves in central banks already turned?
 
Cycles – a fuse, an explosive and the igniting catalyst.
 
It’s a big bet and the house is skewed
————
 
The chart above shows very clearly stock market behavior that has never happened before. 
Over the last 5 years the S&P 500 has almost doubled with no change in GAAP earnings. The most remarkable part is that as earnings have collapsed since the beginning of 2015, the S&P 500 accelerated higher!
Also this happening after a 50 year bear trend in US GDP which is still trending to zero. This is the result of the change in monetary system that happened 50 years ago. Do you really think Trump can change that by essentially just doing more of the same on a smaller scale that what has been attempted before?
Inline image 1
The 3 charts below show different ways of looking at US stocks and clearly show that this is one of the most overvalued stock markets in history. However, earnings have already collapsed for 2 years. The stock market has never been this over valued AFTER earnings peaked 2 years ago!
 
Dow Most Overbought in 20 years
 
 
Inline image 2
 
 
 
“single most extreme syndrome of “overvalued, overbought, overbullish” conditions”
 
Inline image 1
Shiller warns stocks are partying like its 1929 
Inline image 3
Is the market now bullishly positioned? 
Inline image 2
At record highs its remarkable the economic fantasies you hear. Cycles become forgotten
 

“Cycles have always prevailed eventually” Howard Mark

“I think it’s essential to remember that just about everything is cyclical. There’s little I’m certain of, but these things are true: Cycles always prevail eventually. Nothing goes in one direction forever. Trees don’t grow to the sky. Few things go to zero. And there’s little that’s as dangerous for investor health as insistence on extrapolating today’s events into the future. “
In investing, as in life, there are very few sure things. Values can evaporate, estimates can be wrong, circumstances can change and “sure things” can fail. However, there are two concepts we can hold to with confidence:
  • Rule number one: most things will prove to be cyclical.
  • Rule number two: some of the greatest opportunities for gain and loss come when other people forget rule number one.”
 
Has the cycle in paper reserves in central banks already turned?
Inline image 4
Cycles – a fuse, an explosive and the igniting catalyst.

“The Debt Super Cycle is coming to an end. It is the fuse that will ignite this combustible mixture. The explosive mixture is about the Fiat paper reserves underpinning the global economic system which are presently built on failing wealth creation which is  required to maintain the collateral values  supporting the pyramided debt leverage levels through financial “gimmicks” such as rehypothecation. The approximate $600T derivative SWAPs market is the explosive within this mixture.

The catalyst to ignite the fuse will likely be correcting financial markets that are historically highly over-valued, disconnected from fundamentals and can only be described as in the third and final central bank bubble of the new millennium.
No doubt it is going to be both an exciting and troubling period between now and early 2020. You, dear reader, must determine which it is going to be for you personally?”

https://matasii.com/cycles-the-end-of-the-debt-super-cycle/

It’s a big bet and the house is skewed

The bubble may seem a necessity to those that benefit from the current financial system. However, economic fantasies have so far always lost in the end to cycles. It’s a big bet and the house is skewed to the forever “Big Fat Ugly Bubble”. What choice will you make?

Is the most important thing how long of equities you were in the one month Trump trade? Or how well you are going to do when the cycles reassert their influence over asset prices? How do you balance that? What strategy will enable you to come out ahead over the whole cycle?

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