{"id":21024,"date":"2016-06-07T19:20:46","date_gmt":"2016-06-08T00:20:46","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21024"},"modified":"2016-06-07T19:20:46","modified_gmt":"2016-06-08T00:20:46","slug":"grinding-in-harms-way-the-feds-sick-wall-street-puppies-will-self-destruct","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21024","title":{"rendered":"Grinding In Harms\u2019 Way\u2014\u2014The Fed\u2019s Sick Wall Street Puppies Will Self-Destruct"},"content":{"rendered":"
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Grinding In Harms\u2019 Way\u2014\u2014The Fed\u2019s Sick Wall Street Puppies Will Self-Destruct<\/a><\/h3>\n<\/header>\n
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Whatever is going on in the daily stock market, you can\u2019t call it \u201cprice discovery\u201d or even remotely rational.<\/p>\n

In fact, it amounts to grinding in harms\u2019 way, and measures the degree to which the Fed and other central banks have turned the Wall Street casino into a\u00a0giant litter of\u00a0sick puppies who are bent on rolling the dice until they\u00a0self-destruct.<\/p>\n

Even MarketWatch has noted that the S&P 500 has climbed above 2100 on\u00a0more than 30\u00a0occasions during\u00a0the last 18 months, but\u00a0has retreated each and every time.<\/p>\n

So buying the dips in that context is based on eyes wide shut speculation; it essentially implies there is no material downside, and that one of these days the market will bust loose from\u00a0its 2130 top of May 2015 and soar\u00a0to spectacular new highs.<\/p>\n

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\"\"Source: FactSet<\/em><\/cite><\/p>\n

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Now exactly how could that possibly happen? There is no macroeconomic or profits upsurge in sight, yet the market is already trading at\u00a024X<\/strong>\u00a0<\/em>reported S&P 500 earnings. And even\u00a0a modest\u00a05% gain from the old\u00a0May 2015 high would take\u00a0valuations to a hideous\u00a026X<\/strong><\/em>.<\/p>\n<\/div>\n

By contrast,\u00a0when earnings for the S&P 500 came in at\u00a0$87<\/strong>\u00a0<\/em>share for the LTM ending in March, it\u00a0signaled that corporate profits remain\u00a0on a slippery slope heading due\u00a0south.\u00a0Last quarter\u2019s results\u00a0were\u00a0down\u00a012%<\/strong><\/em>\u00a0from prior year ($99), and fully\u00a018%<\/strong><\/em>\u00a0from the cycle peak recorded for the September 2014 LTM of $106 per share.<\/div>\n<\/div>\n<\/figure>\n
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So what is happening is that every notion of economic and earnings fundamentals has now been completely\u00a0suspended. The cowardly,\u00a0dithering fools who run the Fed have created a horribly dangerous\u00a0one-decision trade.<\/strong><\/em><\/p>\n

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

Grinding In Harms\u2019 Way\u2014\u2014The Fed\u2019s Sick Wall Street Puppies Will Self-Destruct Whatever is going on in the daily stock market, you can\u2019t call it \u201cprice discovery\u201d or even remotely rational. In fact, it amounts to grinding in harms\u2019 way, and measures the degree to which the Fed and other central banks have turned the Wall […]<\/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":[5979,2120,303,5220,1716,1138,3650,860],"class_list":["post-21024","post","type-post","status-publish","format-standard","hentry","category-economics","tag-contracorner","tag-david-stockman","tag-fed","tag-marketwatch","tag-sp-500","tag-stock-market","tag-us-federal-reserve","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21024","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=21024"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21024\/revisions"}],"predecessor-version":[{"id":21025,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21024\/revisions\/21025"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}