{"id":19444,"date":"2016-04-03T11:40:54","date_gmt":"2016-04-03T16:40:54","guid":{"rendered":"http:\/\/olduvai.ca\/?p=19444"},"modified":"2016-04-03T11:40:54","modified_gmt":"2016-04-03T16:40:54","slug":"yelling-stay-in-a-burning-theater-yellen-ignites-another-robo-trader-spasm","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=19444","title":{"rendered":"Yelling \u2018Stay\u2019 In A Burning Theater\u2014\u2013Yellen Ignites Another Robo-Trader Spasm"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/davidstockmanscontracorner.com\/yelling-stay-in-a-burning-theater-yellen-ignites-another-robo-trader-spasm\/\" target=\"_blank\">Yelling \u2018Stay\u2019 In A Burning Theater\u2014\u2013Yellen Ignites Another Robo-Trader Spasm<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<div class=\"pf-content\">\n<p>Simple Janet has\u00a0attained a new milestone\u00a0as a\u00a0public menace\u00a0with her speech to the\u00a0Economic Club of\u00a0New York. It amounted to yelling \u201cstay\u201d in a burning theater!<\/p>\n<p>The stock market has been desperately trying to correct for months now because even the casino regulars can read the tea leaves.\u00a0That is, earnings are plunging, global trade and growth are swooning and central bank \u201cwealth effects\u201d pumping has not trickled down to the main street economy. Besides, there are too many hints of market-killing\u00a0recessionary forces\u00a0for even the gamblers to\u00a0believe that the Fed has abolished the\u00a0business cycle.<\/p>\n<p>So by the sheer cowardice and risibility of her speech, Simple Janet has\u00a0triggered\u00a0still another robo-trader spasm in the casino. Yet this latest\u00a0run at resistance points on a stock chart that has been rolling over for nearly a year now underscores how absurd and dangerous 87 months of\u00a0ZIRP\u00a0and wealth effects\u00a0pumping have become.<\/p>\n<p>As we have indicated repeatedly,\u00a0S&amp;P 500 earnings\u2014\u2013as measured by\u00a0the honest GAAP accounting that the SEC demands on penalty of jail\u2014\u2014-have now fallen\u00a0<em><strong>18.5%<\/strong><\/em>\u00a0from their peak. The latter was registered in the LTM period ending in September 2014 and clocked in at\u00a0<strong>$106<\/strong>per share.<\/p>\n<p>As is\u00a0shown in the graph below, the index was trading at\u00a01950\u00a0at that time. The\u00a0valuation multiple at a sporty\u00a0<strong>18.4X,\u00a0<\/strong>therefore,<strong>\u00a0<\/strong>was already pushing the envelope given\u00a0the extended age of the\u00a0expansion.<\/p>\n<p>Indeed, even\u00a0back then there were plenty of\u00a0headwinds becoming\u00a0evident. These included global\u00a0commodity deflation, a rapid\u00a0slowdown in the pace of capital\u00a0spending and the\u00a0vast build-up of debt and structural barriers to growth throughout China and its EM supply train, as well as Japan, Europe and the US.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Yelling \u2018Stay\u2019 In A Burning Theater\u2014\u2013Yellen Ignites Another Robo-Trader Spasm Simple Janet has\u00a0attained a new milestone\u00a0as a\u00a0public menace\u00a0with her speech to the\u00a0Economic Club of\u00a0New York. It amounted to yelling \u201cstay\u201d in a burning theater! The stock market has been desperately trying to correct for months now because even the casino regulars can read the tea [&hellip;]<\/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":[124,5979,2120,303,400,451,534,3650,13234,1939],"class_list":["post-19444","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-contracorner","tag-david-stockman","tag-fed","tag-hft","tag-janet-yellen","tag-monetary-policy","tag-us-federal-reserve","tag-wealth-effect","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19444","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=19444"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19444\/revisions"}],"predecessor-version":[{"id":19445,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19444\/revisions\/19445"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}