“In the next recession, I would expect the P/E to bottom at about seven times, a lower low with earnings about 30% lower because of the recession. That would put the S&P lower than the 666 low of the previous crash, versus 2671 Thursday afternoon.”
“If you want to blame someone, blame the Fed. And I am sure that is exactly what President Trump will do when he loses patience and moves to remove their independent status.”
“…a ruinous fiscal deficit in excess of 15% of GDP will be Trump’s legacy.”
“How do you know when an asset price rise has turned into a bubble?”
“Many of these same investors, however, tend to agree with us on a two year view that things are likely to end very badly.”
“The risk is that the market is hugely vulnerable if it hears a distant bark, let alone feels its bite.”
“It could happen tomorrow given the extreme expense of US equities and the near universal consensus of a continued acceleration in the economic cycle despite the Fed also in the midst of a tightening cycle.”
“I was too optimistic!”
“This is quite amazing given where we are in the global economic cycle.”
“If this is, as we strongly believe, an aberration and the equity yield reconnects with the red dotted arrow, then investors should be petrified of the next equity bear market.”
“The last time volatility in the US bond market was this low (and complacency this high), 10y yields spiked up some 150bp in only four months as part of Bernanke’s ‘Taper Tantrum’. “
Yes, “how wrong” I/we was/were.
Or was “we”?
The problem with healthy debate is that so many people back themselves into a corner and take any contrary opinion as a personal attack on their very identity as a human being.”
” Now we have central bankers patting themselves on the back for having done a jolly good job. That surely is the most worrying, hubristic signal of all.”
“Collapsing bank lending growth is signalling that something is amiss and the Fed should stop raising rates, but I expect rapidly rising wage inflation will push the Fed into overkill. Fed tightening cycles almost always end in recession and this time will be no exception.”