{"id":24306,"date":"2017-06-29T07:34:13","date_gmt":"2017-06-29T12:34:13","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24306"},"modified":"2017-06-29T07:34:13","modified_gmt":"2017-06-29T12:34:13","slug":"the-ambiguity-of-stock-value-why-its-so-difficult-to-call-the-top","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24306","title":{"rendered":"The Ambiguity of Stock Value: Why It\u2019s So Difficult to Call The\u00a0Top"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"https:\/\/macromon.wordpress.com\/2017\/06\/28\/the-ambiguity-of-stock-value-why-its-so-difficult-to-call-the-top\/\" rel=\"bookmark\">The Ambiguity of Stock Value: Why It\u2019s So Difficult to Call The\u00a0Top<\/a><\/h3>\n<div class=\"entry-meta\">This is one of our favorite posts of all-time.<\/div>\n<div class=\"entry-content\">\n<p>Thought it apropos to re-post given that everyone and their mother is trying to call the top in stocks.\u00a0 It\u2019s all about yield-seeking capital flows, my friends.\u00a0\u00a0 Tell us what interest rate is the tipping point which thwarts that behavior and we will tell you when the stock and credit markets top and flop.<\/p>\n<blockquote><p><em><strong>\u201cJohn Bull can stand many things, but he cannot stand\u00a0 2\u00a0,\u00a00,\u00a0.5\u00a0,1,\u00a01.5\u00a0, 2 percent\u201d\u00a0 \u2013 <a href=\"http:\/\/www.econlib.org\/library\/Bagehot\/bagLom6.html\" target=\"_blank\" rel=\"noopener\">Bagehot<\/a><br \/>\n<\/strong><\/em><\/p><\/blockquote>\n<p>We are still far from the tipping point interest rate that sends the yield seekers back to their caves, in our opinion.<\/p>\n<p>I just borrowed 5-year money for my daughter\u2019s first car at 2.64 percent.\u00a0 That is less than 85 basis points over the 5-year note, for a used car!<\/p>\n<p><strong>Expensive Assets<\/strong><br \/>\nYes, absolutely, all assets are incredibly expensive.\u00a0 But pension funds are not going to make their nut sitting in cash waiting for them to get cheaper.\u00a0\u00a0 Seniors in Europe can\u2019t eat with their interest earnings from negative rates.<\/p>\n<p>Argentina floating a 100-year bond at 7 percent-ish, even after defaulting several times over the past 30 years, is definitely the warning bell of a credit bubble closer to the top. \u00a0 And a contrarian call inflation is about to ignite.<\/p>\n<p>The FOMO * yield and return chasing behavior of the markets\u00a0 reminds us of portfolio managers running to catch the Titanic,\u00a0 knowing full well the ship is going down.\u00a0 They just want to enjoy the 3-day party.<\/p>\n<p>How long will the party last?\u00a0\u00a0 O Lordy, help us.<\/p>\n<p>* Fear of Missing Out<\/p>\n<p class=\"entry-title\"><strong><a href=\"https:\/\/macromon.wordpress.com\/2010\/12\/27\/the-ambiguity-of-value-of-stock-value\/\" rel=\"bookmark\">The Ambiguity of Stock\u00a0Value<\/a><\/strong><\/p>\n<div class=\"entry-meta\"><span class=\"meta-prep meta-prep-author\">Posted on<\/span> <a title=\"9:26 PM\" href=\"https:\/\/macromon.wordpress.com\/2010\/12\/27\/the-ambiguity-of-value-of-stock-value\/\" rel=\"bookmark\"><span class=\"entry-date\">December 27, 2010<\/span><\/a><\/div>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Ambiguity of Stock Value: Why It\u2019s So Difficult to Call The\u00a0Top This is one of our favorite posts of all-time. Thought it apropos to re-post given that everyone and their mother is trying to call the top in stocks.\u00a0 It\u2019s all about yield-seeking capital flows, my friends.\u00a0\u00a0 Tell us what interest rate is the [&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":[15450,1138],"class_list":["post-24306","post","type-post","status-publish","format-standard","hentry","category-economics","tag-global-macro-monitor","tag-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24306","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=24306"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24306\/revisions"}],"predecessor-version":[{"id":24307,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24306\/revisions\/24307"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}