{"id":14124,"date":"2015-11-03T21:21:20","date_gmt":"2015-11-04T02:21:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14124"},"modified":"2015-11-03T21:21:20","modified_gmt":"2015-11-04T02:21:20","slug":"this-time-is-the-same-and-worse","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14124","title":{"rendered":"This Time Is The Same\u2014\u2014And Worse!"},"content":{"rendered":"

This Time Is The Same\u2014\u2014And Worse!<\/a><\/h3>\n

The current stock market melt-up hardly qualifies as limp. Even the robo-machines and hyper-ventilating day traders apparently recognize that their job is to tag the May 2015\u00a0highs and then get out of the way.<\/p>\n

So when and as they complete their\u00a0pointless mission, the question recurs as to why the\u00a0posse of\u00a0fools in the Eccles Building can\u2019t see that they are inflating one hellacious financial bubble; and that when it blows it will deconstruct\u00a0their entire\u00a07-year project of\u00a0make-pretend recovery.<\/p>\n

In fact, if\u00a0it weren\u2019t for the monumental pain and suffering the next bubble collapse will bring to main street, you might even be\u00a0tempted to urge them on toward the Wile E. Coyote moment just ahead.\u00a0After all,\u00a0if\u00a084 straight months of ZIRP and\u00a0$3.5 trillion of fraudulent debt monetization (QE) brings\u00a0nothing more than\u00a0another thundering financial\u00a0collapse, it will be curtains time at the Fed.<\/p>\n

And here\u2019s why they can\u2019t duck the blame this time with tall tales about a global \u201csavings glut\u201d causing lax underwriting in the mortgage market, or the lack of transparency\u00a0on Wall Street balance sheets.<\/p>\n

The fact is, stock prices are just plain nuts and the evidence is\u00a0all there in plain sight.\u00a0And so are\u00a0the intense and manifold economic headwinds arising from all around the planet\u2014\u2013to say nothing of the advanced age of the US business cycle.<\/p>\n

At this point, 75% of\u00a0S&P 500 companies have reported Q3 results,\u00a0and\u00a0earnings are coming in at $93.80 per share on an LTM basis. That happens to be\u00a07.4% below the peak $106 per share reported last September,<\/strong><\/em>\u00a0and means that the market today is valuing these shrinking profits at a spritely\u00a022.49X PE ratio<\/strong><\/em>.<\/p>\n

And, yes, there is a reason for two-digit precision. It seems that in the 4th quarter of 2007 LTM earnings came in at\u00a022.19X<\/strong>\u00a0<\/em>the S&P 500 index price. We know what happened next!<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

This Time Is The Same\u2014\u2014And Worse! The current stock market melt-up hardly qualifies as limp. Even the robo-machines and hyper-ventilating day traders apparently recognize that their job is to tag the May 2015\u00a0highs and then get out of the way. So when and as they complete their\u00a0pointless mission, the question recurs as to why the\u00a0posse […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3598,2120,303,305,1154,661,1716,1939],"class_list":["post-14124","post","type-post","status-publish","format-standard","hentry","category-economics","tag-contra-corner","tag-david-stockman","tag-fed","tag-federal-reserve","tag-interest-rate-policy","tag-qe","tag-sp-500","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14124","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14124"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14124\/revisions"}],"predecessor-version":[{"id":14125,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14124\/revisions\/14125"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14124"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14124"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14124"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}