Don’t Look Down
This time is different.
As ever, those four words are very dangerous when arranged in that order and applied to markets.
But in the current context, the danger emanates not from the notion that this time is never different, but rather from the distinct possibility that it is. "The starting point for this cycle is very different," Goldman's Peter Oppenheimer and Sharon Bell wrote, in a new note. "Interest rates are at record low levels, leaving less room for valuations to increase; margins are
Dont believe GDP is capturing the massive amount of intangible assets in the world economy at the moment
It’s interesting to me that the previous peaks almost exactly align for the dotcom bubble and the GFC. The difference being the valley got deeper during the GFC. A chart is just a chart but this one doesn’t look good.
It appears the music might stop playing just like the dot com crash and GFC with such stretched valuations and underlying issues.
You gotta get up and dance until the music stops- Chuck Prince, Citibank
I love that quote – makes me feel nostalgic …
Previous dips ended at 60%, and lower during a financial crisis. We’re at 140%. We’re looking at drop of 60% in equity prices from current levels if the last hike causes a mild recession.
If Goldman analysts thought things will get this bad, would they even publish their analysis or just trade with it in secret?
Probably not the best time to “lie flat” or retire any earlier than necessary. A great time for individuals to have capital, especially the human kind but financial always helps too, if Powell can’t steer the wealth-effect rocket sideways for a couple of years. Not that I could do any better, but sometimes, I get the feeling Mr. Toad is doing the driving here. To bad, for passengers just along for the ride, that liquid rocket fuel is so volatile. If the chart above follows it’s jagged pattern so far this millennium it will have profound and unpredictable implications on Homo sapiens. The last chart I viewed purporting to graph “excess liquidity” (SentimenTrader.com) looked disturbingly like PIOs (Pilot Induced Oscillations), in that, each came in regular waves each with greater amplitude. Of course, uncorrected PIOs quickly tear the wings off.