{"id":6813,"date":"2015-03-25T05:55:24","date_gmt":"2015-03-25T10:55:24","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6813"},"modified":"2015-03-25T05:55:24","modified_gmt":"2015-03-25T10:55:24","slug":"some-folks-at-the-fed-are-lost-no-juice-to-the-macros-part-1","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6813","title":{"rendered":"Some Folks At The Fed Are Lost\u2014\u2014No Juice To The Macros, Part 1"},"content":{"rendered":"

Some Folks At The Fed Are Lost\u2014\u2014No Juice To The Macros, Part 1<\/a><\/h3>\n

Yesterday we demonstrated that stock market valuations are not merely \u201con the high side\u201d as Janet Yellen averred last week. Instead, they are positively in the nose-bleed section of history.<\/p>\n

You don\u2019t get the Russell 2000 trading at 90X honest-to-goodness GAAP earnings or 125 biotechs with aggregate LTM losses of $10 billion sporting a combined market cap of $280 billion unless you are deep\u00a0into bubble land. In fact, the chart on the median PE multiple for all NYSE stocks bears repeating.<\/p>\n

Recall this graph\u00a0is based on trailing GAAP earnings for all companies with positive income. But\u00a0that was for the LTM period\u00a0ending in June 2014.\u00a0 Since then the market is up by 7%,\u00a0yet reported earnings have basically flat-lined. S&P 500 earnings for the June 2014 LTM\u00a0period, for example, were $103 per share\u2014\u2014-a level that has now dropped to $102 per share for the December LTM period.<\/p>\n

In short, the median NYSE valuation\u00a0multiple is now\u00a0at upwards of 22X\u2014a level far above even the\u00a0dotcom and housing\u00a0bubble peaks. It is no wonder, therefore, that even a certified Cool-Aid drinker\u00a0like\u00a0St Louis Fed head, James Bullard, has now confessed that he fears a \u201cviolent\u201d Wall Street sell-off when the Fed finally ends an 80 month streak of ZIRP sometime this fall.<\/p>\n

\"\"<\/a><\/p>\n

So what are they waiting for? Actually, this morning\u2019s
\nWall Street Journal expressed it\u00a0about as\u00a0plaintively as it comes. In a word, the monetary politburo is waiting for zero interest rates, massive debt monetization and its wealth effects promises and \u201cputs\u201d to goose the macros:<\/p>\n

 <\/p>\n

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

Some Folks At The Fed Are Lost\u2014\u2014No Juice To The Macros, Part 1 Yesterday we demonstrated that stock market valuations are not merely \u201con the high side\u201d as Janet Yellen averred last week. Instead, they are positively in the nose-bleed section of history. You don\u2019t get the Russell 2000 trading at 90X honest-to-goodness GAAP earnings […]<\/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":[1806,303,305,4405,451,4406,4404,860,1940,1939],"class_list":["post-6813","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-fed","tag-federal-reserve","tag-gaap","tag-janet-yellen","tag-nyse","tag-stock-market-valuations","tag-wall-street","tag-zero-interest-rate-policy","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6813","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=6813"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6813\/revisions"}],"predecessor-version":[{"id":6814,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6813\/revisions\/6814"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}