Salient to Investors: Harry Dent writes: The first wave down in a bubble tends to happen in a few months or less. Every major bubble back to the tulip bubble in 1637 did not correct in nice stair steps to a drop of 50% to 90%. We are in the “crash season”
READ MORE... →Salient to Investors: Mark Hulbert writes: The stock market may be overvalued and could begin a bear market but it does not resemble the bubble market in 2000. The explosion of bubble warnings is unwarranted. The 5 identifiers found by JeffreyWurgler at NYU and Malcolm Baker at Harvard in stock market
READ MORE... →David Stockman writes: Amazon’s valuation, its one day gain and last week’s Google gain are reminiscent of the days before the tech wreck 15 years ago. The 12 Big Cap Techs of 2000 saw their peak combined valuation of $3.8 trillion plunge to $875 billion a decade later, even as their sales
READ MORE... →Salient to Investors: David Stockman writes: Google’s unwarranted market cap gain last Friday – 75% of the 9.6% gain in net income from the prior quarter was due to a lower tax rate and a cutback of ballooning G&A expenses – easily passed in one day the entire $50 billion market cap of Caterpillar, though only
READ MORE... →Salient to Investors: Charles Hugh Smith writes: Building new gleaming headquarters generally marks the top of a bank’s fortunes. So Facebook’s glamorous new headquarters, Apple’s under construction “spaceship” campus, Google’s plans for an ultra-modernist headquarters may indicate excessive confidence in endless growth of revenues, profits and valuations. Projections based on permanently parabolic growth
READ MORE... →Salient to Investors: David Stockman writes: The Fed has generated a $50 trillion financial bubble and made money and capital markets to little more than gambling casinos. Speculative rent-seeking in the financial market has replaced entrepreneurial innovation and supply side investment and productivity, resulting in a severe drop in real growth and a
READ MORE... →Salient to Investors: David Stockman writes: The financial carrying capacity of the developed market economies has deteriorated since the 1980s; due to aging demographics, declining competitiveness v. emerging market economies, declining productivity growth, and the big increase in the leverage ratio against public and private incomes. The US’s ability to
READ MORE... →Salient to Investors: Since 2011, online investors since 2011 have helped drive a 50-fold increase in financing through peer-to-peer websites, and are turning to property as falling home prices prompt China to ease curbs aimed at stamping out speculation. China is trying to revive local-government revenues at the risk of
READ MORE... →Salient to Investors: Global debt complacency is evidenced by investor enthusiasm for the debt of Ecuador, Clear Channel Communications, China’s Logan Property Holdings, Greece’s Hellenic Petroleum, Florida’s Orange County Industrial Development Authority. Japan’s Government Pension Investment Fund is even considering venturing into junk bonds. Almost any borrower is able to raise
READ MORE... →Salient to Investors: The stock market is massively overvalued based on multiple measures due to crony financial leverage that has created wealth inequality that is now the worst we have seen during multiple generations. The PE ratio of the S&P 500 is 24.9, or 80 percent higher than the historical
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