The Off The Charts Bull Market

#CKStrong

Bezos, Musk, and Branson (BMB) are not the only ones to recently touch the earth’s thermosphere for a brief and shining moment; take a look at today’s stock market valuation.  Note the structural shift, which took place around 1995. Before the mid-1990s, valuations traded in a nonvolatile range of around 50 percent of GDP.   

Lots happened in the 1990s,  the internet, the return of the emerging markets post debt crisis, the rise of China (probably the most important factor), the end of the Cold War, and some massive sovereign bailouts. 

We get the trade, as we do in Crypto, but we do dare ask if valuations can continue to defy gravity, or will they be forced to return to earth – as in revert to the mean valuation — as did BMB?   If so, that would reverse the fears of inflation to deflation.  Is that what the bond market is signalling?  

Nah, the bond market is not a real market.  

Valuations Lost In Space

The reservoir of liquidity, wealth, stimulus and base money in the global financial system coupled with highly negative real interest rates probably allows valuations to stay lofty and lost in space until the worldwide reversal of monetary policy starts to bite.   Until then, in the words of the great Carol K., who remains in a coma in a Boston hospital,

“Ride the gravy train while it lasts.”

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23 Responses to The Off The Charts Bull Market

  1. socraticeclectic says:

    As the Prince said, when the music plays …

    >

  2. macromon says:

    And then the deluge….and bailouts…

  3. Joe Rourke says:

    Sports versus Shares… https://youtu.be/B_9D5jeby_8

  4. Joe Rourke says:

    A Max Keiser mantra is you “can’t taper a ponzi scheme…” which would imply given the current senario the that monetary injections for “the patient” will continue for as long as there is something to inject or “the patient” is clearly far, far beyond help to all concerned.

    I am not sure though, that the medical analogy here is a good one because it infers that Central Bank Economists are like like Doctors and everybody knows that Doctors swear the Hippocratic oath and can be trusted to act in a Patient’s best interest based on the scientific information and tested treatments that are available, and not say, unsupported quasi-religious dogma and homemade remedies like a tribal Medicine Man or modern Alternative Medicine practioner might use.

    So, I guess what I mean to say is that I am bothered that the Medicine Men are running the show.

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