Category: Liquidity Bubble
The analysis published under this category are as follows.
Sunday, June 27, 2021
Market Bubbles Galore / Stock-Markets / Liquidity Bubble
By: MoneyMetals
Is the entire financial system currently in a massive bubble? That is the question that astute investors may now be asking.
According to Nouriel Roubini, CEO of Roubini Macro Associates and professor at NYU Stern School of Business, now is the time to be overweight gold as more bubbles pop up.
Stocks, bonds, crypto, tech, real estate, whatever sector you want to focus on – these all appear to now be building into or rapidly falling from bubble territory.
The higher these markets do ascend, the greater the eventual fall may be.
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Friday, April 16, 2021
See what Anatomy of a Bursting Market Bubble looks like / Stock-Markets / Liquidity Bubble
By: EWI
Those who are familiar with the Elliott wave model for analyzing and forecasting financial markets know that a main trend takes the form of five waves.
Thus, when the fifth wave is complete, a trend in the opposite direction is set to begin.
Another insight into the Wave Principle that's relevant to the present discussion is that corrections often end at the terminus of the previous fourth wave of one lesser degree of trend.
If that sounds like a mouthful, hold on, you're about to see a market example that'll make it plain as day.
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Wednesday, November 11, 2020
What Causes a Financial Bubble? / Stock-Markets / Liquidity Bubble
By: Travis_Bard
Financial bubbles refer to a situation in which an asset sees a rapid increase in price and demand driven by a theoretical interest, then crashes as the rising prices become unsustainable over time. When reaching a specific value, the asset bubble bursts, and its prices reduce to a level that more accurately reflects its intrinsic value. Financial bubbles are typically attributed to a sudden change in investor behaviour, in which hypes, excessive speculation and the strong desire to ‘jump on the bandwagon’ of a certain trending asset play a part. In this article, let’s explore the potential causes of a financial bubble.
For a comprehensive history of financial bubbles, check out this comprehensive timeline by DailyFX.
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Friday, September 25, 2020
A Look at the Perilous Psychology of Financial Market Bubbles / Stock-Markets / Liquidity Bubble
By: EWI
Investors acknowledge a market bubble but optimism prevents them from seeking financial safety
The months before the 2000 and 2007 stock market peaks saw a measurable rise in news stories that used the phrase "financial bubble."
But instead of selling, many investors kept right on buying.
The logic went something like this: "This bubble could burst one day -- but not just yet."
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Monday, February 17, 2020
Stock Market Bubble - No One Gets Out Of Here Alive! / Stock-Markets / Liquidity Bubble
By: James_Quinn
“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.” – Strauss & Howe – The Fourth Turning
As we wander through the fog of history in the making, unsure who is lying and who is telling the truth, seemingly blind to what comes next, I look to previous Fourth Turnings for a map of what might materialize during the 2nd half of this current Fourth Turning. After a tumultuous, harrowing inception to this Crisis in 2008/2009, we have been told all is well and are in the midst of an eleven-year economic expansion, with the stock market hitting all-time highs.
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Thursday, February 06, 2020
TESLA vs Bitcoin WTF Chart / Companies / Liquidity Bubble
By: The_Gold_Report
Bob Moriarty of 321gold provides three charts for readers.
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Friday, January 17, 2020
What Expiring Stock and Commodity Market Bubbles Look Like / Stock-Markets / Liquidity Bubble
By: Gary_Tanashian
The Nasdaq bubble popped in 2000 after motoring upward on increasing volume in two separate phases. Volume rammed upward and RSI diverged. Like shootin’ fish in a barrel it was, except that at the time I was too inexperienced to see it. It was a steep slope and blow out.
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Thursday, January 09, 2020
The Fed Is Creating a Monster Bubble / Stock-Markets / Liquidity Bubble
By: John_Mauldin
Ignoring problems rarely solves them. You need to deal with them—not just the effects, but the underlying causes, or else they usually get worse.
In the developed world and especially the US, and even in China, our economic challenges are rapidly approaching that point. Things that would have been easily fixed a decade ago, or even five years ago, will soon be unsolvable by conventional means.
Central bankers are the ones to blame. In a sense, they are far more powerful and dangerous than the elected ones.
Hint: It’s nowhere good. And when you combine it with the fiscal shenanigans, it’s far worse.
Tuesday, November 12, 2019
Fed Can't See the Bubbles Through the Lather / Interest-Rates / Liquidity Bubble
By: Michael_Pento
Recently, there has been a parade of central bankers along with their lackeys on Wall Street coming on the financial news networks and desperately trying to convince investors that there are no bubbles extant in the world today. Indeed, the Fed sees no economic or market imbalances anywhere that should give perma-bulls cause for concern. You can listen to Jerome Powell’s upbeat assessment of the situation in his own words during the latest FOMC press conference here. The Fed Chair did, however, manage to acknowledge that corporate debt levels are in fact a bit on the high side. But he added that “we have been monitoring it carefully and taken appropriate steps.” By taking appropriate steps to reduce debt levels Powell must mean slashing interest rates and going back into QE. The problem with that strategy being that is exactly what caused the debt binge and overleveraged condition of corporations in the first place.Read full article... Read full article...
Wednesday, March 20, 2019
Asset Bubbles and the Economy Are Now One / Economics / Liquidity Bubble
By: Michael_Pento
After this latest round of a deflationary recession/depression consummates, global central banks and governments will engage in an epoch battle to re-inflate asset prices such as never before contemplated. Indeed, they are laying the framework for that assault right now.
Global central banks took interest rates to the zero percent range a decade ago and, for the most part, they remain there today. These confetti pushers printed $15 trillion dollars in order to push rates into history’s basement. Such an enterprise in counterfeiting has never been attempted before outside of a banana republic.
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Saturday, December 08, 2018
The Future of Net Worth / Stock-Markets / Liquidity Bubble
By: Harry_Dent
Have I mentioned that this bubble in stocks – the one that most economists and analysts still claim “is not a bubble” – is now the greatest by far in its numerical advance, its percentage gains, and time frame?You’re damn right I have!
I’m broadcasting the warning far and wide, to any who will listen. Hopefully I can save a few, including you…
Unfortunately, people fat and drunk and high on free-money crack don’t see any bubble (nor do they want to, even if they could)!
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Friday, November 16, 2018
When This Liquidity Bubble Pops, We’ll Face The Biggest Crisis Yet / Stock-Markets / Liquidity Bubble
By: John_Mauldin
Debt is a huge a drag on the economy. It’s especially true after it rises over the 80 to 90% of GDP level.US government debt is now 106% of GDP. And if you add state and local debt, total government debt is over 120% of GDP.
Shades of Italy and Greece.
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Monday, November 05, 2018
A Year of Inflated Market Bubbles / Stock-Markets / Liquidity Bubble
By: Harry_Dent
So far, the 21st Century has seen one B.S. bubble after another.Even worse, these bubbles have inflated beyond any recognizable or manageable form. They’ve morphed into monsters, seemingly with minds and wills of their own.
There are, at the least, two forces at play here: central banks (the crack dealers)… and cycles. Let’s continue our discussion of the most important cycle that will impact us next year, particularly in the last half…
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Monday, March 26, 2018
The ABCs Of Popping A Third Asset Price Bubble / Stock-Markets / Liquidity Bubble
By: Dan_Amerman
Movies can have quite predictable plot lines that we know in advance - but we love them anyway. It could be a romance, where the girl is going to end up with the right guy through a series of improbable events, even though that looks impossible to begin with. It could be an action movie, where our tough and underestimated hero overcomes seemingly impossible odds to just barely win in the end, after all.
There are movies that play over and over again in the financial markets and the economy as well, and while the particulars change, the plots can repeat themselves.
In this analysis, we are going to take a look at a market "movie" that has played out twice in the modern era, and follow the A-B-C-D plot line that was followed in each case. We will then take a look at more recent events, see if A-B-C have been occurring, and ask if D could be coming after C for the third time in a row?
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Thursday, March 22, 2018
The Tertiary Bubbles Have Blown Up… Can the Fed Manage the Secondary Ones? / Stock-Markets / Liquidity Bubble
By: Graham_Summers
The big questions being tossed around Wall Street today are: why are markets such a mess? Why are we getting these wild swings?
The reality is that the markets are NOT a mess. These are actually normal healthy markets. Healthy markets move, sometimes a lot in a small span of time.
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Friday, March 09, 2018
The Stock Market Bubble Conversation / Stock-Markets / Liquidity Bubble
By: Harry_Dent
If there’s anything super-important in life, it’s reproduction. Without it, there’s no life… that’s why sex was designed to be so pleasurable.But pleasure is an addiction (to all creatures). Everyone has their guilty little pleasure. It might be chocolate or coffee, alcohol or opioids, a foot fetish or talking a lot. Some birds get drunk off of fermented berries. African elephants, monkeys, meerkats and giraffe get drunk eating fermented marula fruit.
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Saturday, February 10, 2018
Financial Markets Bubble Watching / Stock-Markets / Liquidity Bubble
By: The_Gold_Report
Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, explain why they believe financial markets have generated the biggest bubble in history.
As we have noted here before, we believe that financial markets have generated the biggest bubble in history. There are many supporting facts for this view, from extreme measures of market sentiment to prolonged record low volatility, unprecedented low interest rates, record levels of leverage and historic over-valuation.
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Sunday, December 10, 2017
Is it “Late 2007” For the Everything Bubble? / Stock-Markets / Liquidity Bubble
By: Graham_Summers
Timing the end of a major bubble is extraordinarily difficult as it entails figuring out when a critical mass of investors shift from greed to fear.
Having said that, we’ve recently seen a number of developments that would suggest we’re near the end of the current Bond Bubble.
Back in June the world saw the unveiling of perhaps the single most insane investment of all time: the 100-year bond.
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Tuesday, October 31, 2017
The Bubble Economy Is Set To Burst / Stock-Markets / Liquidity Bubble
By: John_Mauldin
My friend Andy Xie, based in Shanghai, is a very independent-minded investment analyst and economist. With a PhD from MIT, he has been at the IMF and was a star economist for the Morgan Stanley Asia-Pacific group.
His often bearish calls on various parts of the Chinese economy have elicited a lot of criticism from Chinese officials and retail investors. I have been on the stage with him several times, both on the same side of debates and on opposite sides—he is a formidable opponent!
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Wednesday, September 20, 2017
Infographic: The Everything Bubble Is Ready to Pop / Stock-Markets / Liquidity Bubble
By: John_Mauldin
BY JARED DILLIAN : It wasn’t always this way. We never used to get a giant, speculative bubble every 7–8 years. We really didn’t.
In 2000, we had the dot-com bubble.
In 2007, we had the housing bubble.
In 2017, we have the everything bubble.
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Friday, July 14, 2017
Bubble Update: Stocks Are Now at 1999 Bubble Levels (Guess What’s Next) / Stock-Markets / Liquidity Bubble
By: Graham_Summers
Remember the 2007 Bubble?
Remember how everyone said that it really wasn’t that big of a bubble because stocks weren’t as expensive as they had been during the previous bubble (the Tech Bubble).
We all remember how that turned out: the bubble burst leading to the greatest financial crisis in 80 years.
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Friday, July 07, 2017
The Fed Just Admitted, On RECORD, Stocks Are In a Bubble / Stock-Markets / Liquidity Bubble
By: Graham_Summers
Yesterday, the Fed made the single largest announcement of the last 10 years.
The media didn’t catch it. Nor did the markets.
The reason?
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Friday, June 23, 2017
Did Central Banks Just Pull the Plug On Another Credit Bubble? / Stock-Markets / Liquidity Bubble
By: Graham_Summers
Last week the NY Fed downgraded its economic forecast for 2Q17 to just 1.9%. Even worse, it is now forecasting 2017 total growth to be a measly 1.5%.
Yes, 1.5%.
There is a clear trend to this chart… and it’s NOT up.
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Thursday, May 04, 2017
Stock Market Largest Bubble Since 1983 - Why to Think Like a Surfer / Stock-Markets / Liquidity Bubble
By: Harry_Dent
I took up surfing in my early 30s.It didn’t last long. But I learned a tremendous amount from the experience (least of which is that I suck at surfing).
Well, it’s time to think like a surfer.
Your sole focus is to catch the wave.
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Sunday, February 19, 2017
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts / Stock-Markets / Liquidity Bubble
By: Adam_Taggart
Chris Martenson writes: At PeakProsperity.com, we pride ourselves on providing fact-based context to breaking important events.
Within 72 hours of the Japan tsunami in 2011, we had analyzed the situation and concluded with high probability that three core meltdowns had occurred at the Fukushima nuclear plant. While it took years for officials to finally admit to the full extent of the crisis, history has validated our initial analysis.
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Monday, October 17, 2016
Stock Market Bubble Has Run Out of Excuses and Time / Stock-Markets / Liquidity Bubble
By: Michael_Pento
It is finally going to be a make or break earnings season for stocks. This is because the justification for record high stock prices that have been perched atop extremely stretched valuation metrics has been the following false assumptions: the hope that the Federal Reserve will not resume its interest rate hiking cycle, the U.S. dollar stops rising, the price of oil enters a sustainable bull market and long-term interest rates continue to fall.
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Friday, July 29, 2016
Asset Bubbles Tend to Crash with a Vengeance / Stock-Markets / Liquidity Bubble
By: Dr_Jeff_Lewis
Despite short-term memory loss affecting most investors, asset bubbles tend to crash with a vengeance. From over-valuation, risk ignorance, and reactionary sentiment, the current bubble-trifecta shows signs of turning over.
The monetary powers that be have succeeded in creating serial asset bubbles. Each is extending from the great expansion of credit pivoting on the last official dollar default in 1971.
And yet once, again we are bombarded with the mantra: “This time it’s different”.
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Friday, June 24, 2016
How Investors Are Impacted By The Central Banking Bubble / Stock-Markets / Liquidity Bubble
By: InvestingHaven
Bubbles are not new. The tulip mania, for instance, peaked some 400 years ago. Interestingly, there is one common characteristic about bubbles: that they are considered ‘normal’ during the bubble but ‘abnormal’ after their implosion.
Nowadays, it seems that the whole world has accepted zero (even negative) interest rates. Media and your friends write about negative interest rates as if that is nothing special, and people do not have make a point about it. Never in history, at least not in regular times (non-war), have interest rates been negative. Does this sound like a bubble?
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Friday, June 10, 2016
Central Banks Inflating an Epic Bond Bubble - Video / Interest-Rates / Liquidity Bubble
By: Mario_Innecco
hi it's Friday a June tenth 2016
malekko 64 here home of alternative economics and contrarian view
i'm going to cover the sovereign bond market today or government bond market
mainly because we're hearing more and more how trillions and trillions of
government bonds are yielding a negatively
right now they have negative yields and right now we're up to 10 trilling about
10 trillion and i think is good about to get big bigger than the number and it's
mainly in Europe and Japan and there's a story from two days ago in the aft
uh-huh and it says Japan's BTM you threatens to quit jgb primary dealers
club bank of tokyo-mitsubishi is the biggest bank in Japan they're
threatening to quit as a primary dealer of japanese government bonds primary
dealers basically they buy government bonds when the government issues it and
then they take it on their books and then they try to sell it on to their clients...
Tuesday, May 24, 2016
"We're in the Biggest Financial Bubble Ever", say James Turk - Video / Stock-Markets / Liquidity Bubble
By: Mario_Innecco
ok ya Tuesday May 24 to 2016 I'm gonna be interviewing James Turk he's the
founder of gold money and he also worked as an international bank of forty years
at the Chase Manhattan Bank and the Abu Dhabi Investment Authority James would
you like to see a bit more about your background
well I got about 45 years of experience in international banking and finance but
my specialty is really cold and investment strategy I say and one
question I would like to ask you don't think is quite important for the
listeners of my channel is why why is gold money you know like gold money and
explain to people you know the history maybe of our involved as money
Saturday, April 30, 2016
How Much Longer Until Stock Market Bubble Bursts? / Stock-Markets / Liquidity Bubble
By: Graham_Summers
It’s been a rough week for stocks.
Traders gunned for 2,100 on the S&P 500 time and again. All of those efforts failed to hold. And this was despite the Fed failing to raise rates again.
The market is now rolling over and likely to test the downward trendline established by a series of lower highs in 2015. Currently this level is around 2,030 or so.
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Tuesday, April 26, 2016
Fed Induced Bond Bubble Will Devastate Financial System - Video / Interest-Rates / Liquidity Bubble
By: Mario_Innecco
Transcript Excerpt:Hi it's a Tuesday April 26 2016 I'm gonna be talking about a subject a
little bit technical but I think people need to know about this and it's to do
with central banks and you know what the bond markets so in my opinion central
banks they planted or clean been planting the seeds of a bond market
meltdown with the zero interest rate policy and the negative interest rate
policy and by the bond markets I mean government bond markets which are
supposedly risk-free assets are not of course and then corporate bonds you know
all kinds of ratings you know junk bonds but our focus on the bond market
government bond market because that's the biggest market in the world so the
policy observed with zero interest rates implemented through quantitative easing
and officially set raids has resulted in the bond market but never seen before in
the history of financial markets basically the only way to get interest
rates were is to buy bonds because the ruling bond bond prices and yields is
that the bond price goes up goes down if the deal goes up ...
Friday, April 22, 2016
Market Bubbles, Bubbles, Toil and... Pop / Stock-Markets / Liquidity Bubble
By: Doug_Wakefield
"Prosperity is like a Jenna tower. Take one piece out and the whole thing can fall." That's a direct quote from John Williams, the President of the San Francisco Federal Reserve Bank in a speech a few weeks ago. - US Recession Data Shows It's a Very Short Road to Capital Controls, Simon Black, March 15, 2016
Wednesday, August 19, 2015
Keeping the Stock Market Bubble-Boom Going / Stock-Markets / Liquidity Bubble
By: Thorsten_Polleit
The US Federal Reserve is playing with the idea of raising interest rates, possibly as early as September this year. After a six-year period of virtually zero interest rates, a ramping up of borrowing costs will certainly have tremendous consequences. It will be like taking away the punch bowl on which all the party fun rests.
Tuesday, August 04, 2015
Why This Stocks Bubble Is Actually WORSE Than the Internet Tech Bubble / Stock-Markets / Liquidity Bubble
By: Harry_Dent
I’ve been invited to speak on many media outlets lately, hammering on and on about how this is another bubble. Worse, an artificial one!
A bubble occurs naturally when market forces converge. Trends come together and make the markets so hot that everyone starts piling in.
But it’s one thing when investors speculate on the fundamentals like demographics, rising technology, and falling interest rates. For example, like in 1925 to 1929, and 1995 to 1999.
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Tuesday, July 28, 2015
How to Identify a Classic Market Bubble / Stock-Markets / Liquidity Bubble
By: Michael_Pento
One of the most ironic and fascinating characteristics about an asset bubble is that central banks claim they can't recognize one until after it bursts. And Wall Street apologists tend to ignore the manifestation of bubbles because the profit stream is just too difficult to surrender.
The excuses for piling money into a particular asset class and sending prices several standard deviations above normal are made to seem rational at the time: Housing prices have never gone down on a national basis and people have to live somewhere, the internet will replace all brick and mortar stores, and perhaps the classic example is that variegated tulips are so rare they should be treated like gold.
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Wednesday, July 22, 2015
Market Bubble in Trouble? Rinse & Repeat / Interest-Rates / Liquidity Bubble
By: EWI
Our new, FREE report shows you specific areas of the U.S. stock market that have become dangerously frothy
When I was in college, I had this weekly ritual. I'd drive home to my parents' house every Friday, run inside to say hello, grab some food, and leave several bags of dirty laundry to be picked up the next morning.
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Thursday, July 16, 2015
Bubble in Trouble: Record Debt. Unprecedented Optimism. You can be ready Before it bursts... / Stock-Markets / Liquidity Bubble
By: EWI
Exclusive invitation: Our friends at Elliott Wave International have just released a new subscriber report, A Bubble in Trouble. On an exclusive, limited-time basis, they've allowed us to share it with you, for FREE. Learn more and read their research-packed report now >>
Tuesday, July 14, 2015
Bulletin: It’s a Credit Bubble! / Stock-Markets / Liquidity Bubble
By: Gary_Tanashian
You may have caught the title’s little inside joke.
Sometimes you (well, I anyway) can look at a graph representing data that is a culmination of history (i.e. reality) and just let it settle in for some perspective and even some conclusions.
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Monday, June 29, 2015
Bubbles Never Pop Painlessly / Stock-Markets / Liquidity Bubble
By: Michael_Pento
Investors are obsessed over predicting the timing of the Fed's first interest rate hike. Will it raise the Fed Funds rate in September, or wait until next year? But it is far more important to get a grasp on the pace of rate hikes. Will it be a one and done move, or does this mark the beginning of an incremental tightening cycle? Those of us who are not in the inner circle are forced to only speculate.
But one thing is certain: If history is any guide, whatever they do the Fed will get it wrong. Most market commentators place unfounded belief in the Fed's acumen. But the truth is: I wouldn't trust the Fed to tell me what the weather is going to do in the next 30 seconds -- even if they were looking out the window.
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Tuesday, June 09, 2015
Housing and Stocks Bubble - The Punch Bowl Stays / Stock-Markets / Liquidity Bubble
By: Peter_Schiff
It is well known that I don’t think much of the ability of government officials to correctly forecast much of anything. Alan Greenspan and Ben Bernanke have made famously clueless predictions with respect to stock and housing bubbles, and rank and file Fed economists have consistently overestimated the strength of the economy ever since their forecasts became public in 2008 (see my previous article on the subject). But there is one former Fed and White House economist who has a slightly better track record...which is really not saying much. Over his public and private career, former Fed Governor and Bush-era White House Chief Economist Larry Lindsey actually got a few things right.
Wednesday, June 03, 2015
How To Spot A Bubble / Stock-Markets / Liquidity Bubble
By: Raul_I_Meijer
We’ve been entertaining ourselves to no end the past couple days with a ‘vast array’ of articles that purport to provide us with ‘expert’ opinion on the question of whether we are witnessing a bubble or not. Got the views of Goldman’s David Kostin, Robert Shiller, Jeremy Grantham, Jeremy Siegel, Howard Marks.
But although these things can be quite amusing because while they’re at it, of course, the ‘experts’ say the darndest things (check Bloomberg ‘Intelligence’s Carl Riccadonna: “You had equity markets benefit from QE, but eventually QE also jump-started the broader recovery.. Ultimately everyone’s benefiting.”), we can’t get rid of this one other nagging question: who needs an expert to tell them that today’s markets are riddled with bubbles, given that they are the size of obese gigantosauruses about to pump out quadruplets?
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Sunday, May 24, 2015
The Chinese and U.S. Economies Are Bubble-Thin / Stock-Markets / Liquidity Bubble
By: ...
MoneyMorning.com Michael E. Lewitt writes: The Shanghai Composite Index soared by 8% last week to its highest level since 2008 and is up about 130% over the last year.
The Shenzhen Composite Index jumped by 12% last week and is up 166% over the same period and is now trading at 66x earnings according to Bloomberg, three times the level of the Shanghai Index.
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Thursday, April 23, 2015
Stocks Bubble - The Spread between Stock Prices and GDP is Blowing Out / Stock-Markets / Liquidity Bubble
By: Michael_Pento
On a fundamental basis stock prices are reflective of both economic and earnings growth. When growth is strong, stock prices should increase in value. And when economic activity decelerates or turns negative, stock prices should go down. Of course nothing is that simple -- especially today, when all markets are so highly manipulated by governments and central banks. Beginning in 2008 the markets followed the Fed on a magical journey down the rabbit hole into a wonderland where bad news is good news; and economic fundamentals and stock prices no longer move in tandem.
Tuesday, April 14, 2015
Tech Stocks Bubble: Different this time? / Stock-Markets / Liquidity Bubble
By: EWI
Editor's note: This article is from Elliott Wave International's brand-new investment report, "U.S. Investors Face a Giant, Historic Bubble." It originally appeared in the April issue of The Elliott Wave Financial Forecast, published March 27, 2015. For a limited-time, EWI has agreed to give our readers exclusive free access to the full report. Please click here to read it now.
In March, we covered the return to a popular fascination with technology.
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Monday, April 13, 2015
Daggers for this Stock Market Bubble / Stock-Markets / Liquidity Bubble
By: Michael_Pento
The recent stock market volatility has caused the major averages to lose nearly all their gains for 2015. However, it is clear stock prices are still extremely overvalued by virtually every metric, especially when viewed in the absence of GDP and earnings growth.
For starters, the Cyclically Adjusted PE Ratio on the S&P 500 is currently 27, whereas the normal level for this longer-term valuation metric is just 15. Also, the ratio of Total Market Cap to GDP is currently at 125%. This reading, which measures the value of all stock prices in relation to the economy, is the second highest in history outside of the tech bubble and is far above the 110% level witnessed in 2007. And with a median PE ratio of all NYSE stocks at a record-high 22, there can''t be any doubt that stock prices are at extreme valuations.
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Thursday, February 19, 2015
Does Economic Stagnation Create Dangerous Financial Bubbles? / Stock-Markets / Liquidity Bubble
By: Dan_Amerman
The Federal Reserve has a seemingly odd fear about the markets that may appear completely upside down to most investors – but this fear is so serious it is helping to determine the Fed's actions, even as it poses a potentially acute risk for investors. As reported in MarketWatch on February 19th, there was a wide ranging discussion at the January, 2015 meeting about if and when to raise interest rates, and this was part of the discussion:
"Fed members who supported an early move said they were concerned that holding rates low for too long might lead to asset bubbles."
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Monday, February 16, 2015
Bubbles, Tensegrity and Fragility / Stock-Markets / Liquidity Bubble
By: Dr_Jeff_Lewis
"....I thought sympathetically of nature's having to make all those myriad frustrated decisions each time she made a bubble. I didn't see how she managed to formulate the wake of every ship while managing the rest of the universe if she had to make all those decisions. So I said to myself, "I don't think nature uses π. I think she has some other mathematical way of coordinating her undertakings."—R. Buckminster Fuller, Your Private Sky
About 15 years ago I was lucky enough to see a one man play - a monologue portraying the life of R. Buckminster Fuller, the anti-establishment dreamer-mad genius most famous for geodesic domes.
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Friday, January 30, 2015
To Create Unlimited Market Liquidity or Not; That Is the Question / Stock-Markets / Liquidity Bubble
By: Doug_Wakefield
"On October 15, 2014 between 9:33 and 9:45, liquidity evaporated in Treasury futures and prices skyrocketed (causing yields to plummet). Five minutes later, prices returned to 9:33 levels.
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Monday, December 08, 2014
Credit Bubble World in a Box / Stock-Markets / Liquidity Bubble
By: John_Rubino
Of all the problems with fiat currency, the most basic is that it empowers the dark side of human nature. We're potentially good but infinitely corruptible, and giving an unlimited monetary printing press to a government or group of banks is guaranteed to produce a dystopia of ever-greater debt and more centralized control, until the only remaining choice is between deflationary collapse or runaway inflation. The people in charge at that point are in a box with no painless exit.
Thursday, September 25, 2014
Federal Reserve Policies Cause Booms and Busts / Interest-Rates / Liquidity Bubble
By: MISES
Richard M. Ebeling writesL Since the economic crisis of 2008-2009, the Federal Reserve — America’s central bank — has expanded the money supply in the banking system by over $4 trillion, and has manipulated key interest rates to keep them so artificially low that when adjusted for price inflation, several of them have been actually negative. We should not be surprised if this is setting the stage for another serious economic crisis down the road.
Tuesday, August 19, 2014
Market Bubbles, Bubbles Everywhere / Stock-Markets / Liquidity Bubble
By: John_Mauldin
The difference between genius and stupidity is that genius has its limits.
– Albert Einstein
Genius is a rising stock market.
– John Kenneth Galbraith
Any plan conceived in moderation must fail when circumstances are set in extremes.
– Prince Metternich
Wednesday, July 02, 2014
Inevitability of Financial Bubbles / Stock-Markets / Liquidity Bubble
By: BATR
Financial instruments are inventions of gnomes from investment houses and exchanges. There is nothing intrinsic about profitability or guarantee that over time such transactions will be rewarding. Much like the games played at a casino, the baccarat banks that run the betting sport and wheel of fortune, are running the odds in their favor. If only the payoff was similar to the gambling den probability, the consistency of indulgence might be worth the risk. However, the systemic incentivisations within the markets themselves are designed to reflect little of economic proportion to actual trading results. Just look how the financial firms compensate their traders to substantiate that the underlying security of the "so called" investment, which bears little resemblance to quoted pricing.
Tuesday, June 10, 2014
The Debt Bubble is Back / Stock-Markets / Liquidity Bubble
By: John_Rubino
For all those analysts (including this one) who thought the debt binge of the previous decade marked end of the Age of Leverage, well, not so fast. It turns out that memories are short and government printing presses are powerful, and this combination has turned the "Great Deleveraging" into a minor speed bump on the road to something even more extreme. As the following chart illustrates, the growth in total US debt flattened in 2009 and 2010, with government borrowing more-or-less offsetting a decrease in consumer and business loans. But now the trend is once again onward and upward across the board.
Wednesday, May 07, 2014
Stocks, Housing and Bond Market Castles in the Air / Stock-Markets / Liquidity Bubble
By: Fred_Sheehan
The word "bubble" is suffering from overuse. Still, with money for nothing inflating markets around the world, we are seeing how prices inflate to enormous proportions where the prospect of pushing those prices even higher draws a crowd. When such artificial stimulants to bond, mortgage and tea-cup enthusiasm reaches a peak, the switch from green to red is often quick.
A reminder comes by way of "Run, Run, Run, Was the Financial Crisis Panic over Institution Runs Justified?" by Vern McKinley. Published on April 10, 2014, by the Cato Institute, McKinley writes: "Countrywide's [a premier sub-prime lender when the going was good - FJS] second-quarter 2007 financial results indicated no significant weaknesses and the major rating agencies assigned it strong ratings with a stable outlook. [Although, a MarketWatch headline on July 24, 2007: "U.S. Stocks Close Sharply Off on Credit Woes, Dow Slides 226 points; Countrywide Says Risks Extend Beyond Subprime." This is a reminder that "the market" quickly forgets what it does not want to know, as we see on May 1, 2014. - FJS]
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Friday, May 02, 2014
How Bubbles Burst In A Global Market / Stock-Markets / Liquidity Bubble
By: Raul_I_Meijer
More curious numbers every day. An increase of 288,000 jobs in the BLS report’s Establishment Survey, but a decline of 73,000 jobs in the Household Survey; an additional 988,000 Americans left the labor force for an all time high of 92 million not in the labor force, as the Labor Participation Rate moved towards lowest since January 1978 and the Birth/Death model added 234,000 jobs. This is where I think: you tell me.
Sunday, April 27, 2014
The Cost of Code Red - Speculative Bubbles / Stock-Markets / Liquidity Bubble
By: John_Mauldin
(It is especially important to read the opening quotes this week. They set up the theme in the proper context.)
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
– Ludwig von Mises
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Tuesday, April 22, 2014
Is This What a Credit Bubble Looks Like? / Stock-Markets / Liquidity Bubble
By: F_F_Wiley
There’s been some buzz recently about a pick-up in business lending. The six largest banks increased business loans at an average annual rate of 8.5% in the first quarter, according to a Wall Street Journal report last week. Other first quarter data reported by the Fed shows commercial and industrial loans jumping 12% from last year. Charles Schwab’s chief strategist went so far as to call a chart depicting the Fed’s broader lending data “the most important chart in the world.”
Wednesday, March 26, 2014
Cold Warning - When Market Bubbles Burst / Stock-Markets / Liquidity Bubble
By: Raul_I_Meijer
You can hurt a few handfuls of Putin’s people for a few days with sanctions like closing their Visa accounts. But if you threaten to buy less Rosneft oil and Gazprom gas, why should they really care? It’s not as if there’s a glut of either available. Any pain will be short lived. Moreover, it’s all but certain that such actions will drive Russia and China closer together, and is that such a dream scenario for America and Europe?
Thursday, February 20, 2014
The U.S. Bubble Economic Recovery / Stock-Markets / Liquidity Bubble
By: Jesse
"Double, double toil and trouble,
Fire burn and cauldron bubble.
Cool it with a baboon’s blood,
Then the charm is firm and good...
By the pricking of my thumbs,
Something wicked this way comes."
William Shakespeare, Macbeth, Act 4 Sc. 1
Monday, January 27, 2014
When Bubbles Bite - Debt Rattle 2014 / Stock-Markets / Liquidity Bubble
By: Raul_I_Meijer
I guess I may be getting myself in a bit of a jam here, since I posted no Debt Rattle yesterday, but did do the Daily Links, and I do have things to say about some of those. For instance, I think it’s a big piece of news to see Stephen Hawking say black holes don’t exist, and I also think that Mish’s line “Bubbles burst when the pool of greater fools runs out” is important to note, certainly in view of recent events. So this will be a lightly longer Debt Rattle, in all likelihood. I’ll just get started, and let’s see where this goes. Please do note that present bubbles in finance have an incestuous releationship with those in energy: when one pops, the other starts biting.
Thursday, January 16, 2014
Stock Market Liquidity Boom - Enjoy it While it Lasts / Stock-Markets / Liquidity Bubble
By: Fred_Sheehan
"Enjoy it while it lasts"
-Sir Alan Greenspan, June 13, 2007,after suggesting "the global liquidity boom, which he dates back to the end of the Cold War, is nearing its end."
"The fragile five" appears with rising frequency in the financial columns. This warning to stand aside, much as the "Asian contagion," in 1997, is bound to boomerang on Wall Street since Wall Street will keep selling as long as demand exists. At that time, U.S. investment banks were distributing sub-prime, Thai auto-loan securitizations to Greenwich. The hedge funds leveraged such securities into a Fed-led, Wall Street bailout in October 1998. The question of whether the Long-Term Capital Management (LTCM) rescue party should be considered a bailout was answered conclusively in Alan Greenspan's Age of Turbulence scrapbook: "[A]n orderly liquidation of [LTCM] was by no stretch of the imagination a bailout." Greenspan's assertions of blamelessness when he is guilty-as-charged are the foundation for his fortune.
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Wednesday, January 15, 2014
Marc Faber Warns of Massive Financial Assets Bubble / Stock-Markets / Liquidity Bubble
By: Bloomberg
Marc Faber, publisher of the Gloom, Boom & Doom Report, appeared on Bloomberg Television's "Street Smart" today to discuss the impact of Fed policy on the global economy and his predictions for 2014.
Faber told Trish Regan and Adam Johnson that "we are in a gigantic financial asset bubble." He also spoke about Bitcoin, saying, "I prefer physical gold and silver, platinum to bitcoin. Bitcoin can have a lot of competition. Gold, silver, platinum -- they have no competition. How do you value a bitcoin?... How do you value Netflix? Is it overpriced or underpriced? Is Tesla overpriced, underpriced?"
Thursday, November 28, 2013
FOMC Open Letter - Recognizing the Valuation Bubble In Stock Market Equities / Stock-Markets / Liquidity Bubble
By: John_Mauldin
In today's Outside the Box, my friend John Hussman of Hussman Strategic Advisors addresses the members of the Federal Open Market Committee, the Federal Reserve committee that makes decisions about interest rates and national monetary policy. The Fed has been notoriously clueless about bubbles, particularly in the run-up to the Great Recession, and so John would like to help them recognize the currently inflating bubble in equities.
He leads off with the key point that when the Financial Accounting Standards Board abandoned the FAS 157 "mark-to-market" accounting standard on March 16, 2009, in response to Congressional pressure from the House Committee on Financial Services, the FASB removed at a stroke the threat of widespread insolvency by making insolvency opaque. In other words, anyone with anything to hide could now hide it. John goes on:
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Sunday, November 24, 2013
Blowing Asset Price Bubbles With Paul Krugman / Stock-Markets / Liquidity Bubble
By: Mike_Whitney
America’s “highest profile economist” thinks we need more asset bubbles to battle negative real interest rates and persistent secular stagnation.
In a controversial post on his blogsite, New York Times columnist Paul Krugman argues that bubbles may be necessary to make up for insufficient demand, high unemployment, and sluggish growth. Here’s the clip from his blog “The Conscience of a Liberal”:
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Wednesday, November 20, 2013
Stock Market Rally - If It Looks Like a Bubble and Acts Like a Bubble… / Stock-Markets / Liquidity Bubble
By: DailyGainsLetter
John Paul Whitefoot writes: Maybe I’m reading into the economy too much, but the current state of the U.S. economy and Wall Street isn’t adding up. The vast majority of people don’t think we’re in a bubble, including Federal Reserve chair nominee Janet Yellen. Granted, you can only really point to a bubble in retrospect, but still, it certainly looks and feels like we are in one.
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Monday, November 18, 2013
Yellen as a Predictor of Market Bubbles? / Stock-Markets / Liquidity Bubble
By: Matt_Machaj
Economics is an ironic science (if it is science at all by physicists' standards). One can be perfectly correct about various phenomena in general, but offer completely wrong predictions in detail. Nevertheless offering correct predictions is still a significant skill, even if your theories are wrong. Living aside Janet Yellen's theories for the moment, we should praise her for the prediction abilities. As the study of Wall Street Journal confirms, she was the best predictor from the group of the Federal Reserve Policy makers.
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Wednesday, November 06, 2013
Bubble That Everyone Admits is a Bubble / Stock-Markets / Liquidity Bubble
By: EconMatters
This is one of the few times where the benefactors or professionals who benefit from the bubbles, in this case created by the Federal Reserve, fully and openly acknowledge that stock prices and certain other asset classes are completely divorced from fundamental valuations.
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Sunday, November 03, 2013
Easy Money, Excess Liquidity, Anatomy of Market Bubbles and Crashes / Stock-Markets / Liquidity Bubble
By: John_Mauldin
John (Note to readers: A small number of readers reported receiving a blank email of today's Thoughts from the Frontline, and so we decided to resend the letter in order to ensure that all readers were getting it.)
The difference between genius and stupidity is that genius has its limits. – Albert Einstein
Genius is a rising stock market. – John Kenneth Galbraith
Any plan conceived in moderation must fail when circumstances are set in extremes. – Prince Metternich
You can almost feel it in the fall air (unless you are in the Southern Hemisphere). The froth and foam on markets of all shapes and sizes all over the world. It is an exhilarating feeling, and the pundits who populate the media outlets are bubbling over with it. There is nothing like a rising market to help lift our mood. Unless of course, as Prof. Kindleberger famously cautioned (see below), we are not participating in that rising market. Then we feel like losers. But what if the rising market is … a bubble? Are we smart enough to ride and then step aside before it bursts? Research says we all think that we are, yet we rarely demonstrate the actual ability.
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Saturday, September 21, 2013
Coming Soon – The Bubble Economy Tapers Down And Out / Stock-Markets / Liquidity Bubble
By: Andrew_McKillop
IT CERTAINLY HAPPENED BEFORE
By the end of October 1929, the total value of stocks listed on the New York stock exchange had fallen by nearly 40% against early 1929 levels, but this was only the beginning. When the bottom was finally reached in March 1933, stocks had declined by more than 80%. Commodity prices fell by around 50%. World manufacturing output declined by 33% to 60% depending on country. World trade declined by about 67% or two thirds. In less than one year unemployment doubled in several countries, such as the UK, and quadrupled in most countries within 4 years. The International Labor Office in 1933 said that unemployment in the developed world had increased by 33 million since 1928. Corrected for today's population against the world's 2.2 billion in 1933, this would mean about 110 million people losing their jobs, today. The total US labor force as of 2013 is about 150 million.
Tuesday, September 17, 2013
Prepare for "The Mother of All Bubbles" / Stock-Markets / Liquidity Bubble
By: Money_Morning
Shah Gilani writes: There are lots of reasons to be fully invested in the stock market. And that's why it's so important right now to keep an eye on all the bubbles.
They're everywhere. And we have plenty of reasons to fear any number of them bursting.
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Thursday, May 30, 2013
This Is What Real Stock Market Bubbles Look Like / Companies / Liquidity Bubble
By: Charles_Carnevale
With the stock market currently doing so well, numerous articles are popping up playing the bubble card. Personally, I don’t believe we are anywhere near bubble levels for equities, at least in the general sense. I do think there are certain stocks that are currently overvalued, but very few that I would describe as dangerously so. To me, the true definition of a bubble is when prices have become so ludicrously high, that the dangers of a catastrophic loss large enough to be considered almost permanent become imminent or at least quite obvious.
Starting in calendar year 1999 and then peaking in calendar year 2000, we saw a true bubble emerge and inevitably burst in technology stocks. The following F.A.S.T. Graphs™ on three prominent technology stalwarts, Oracle Corp (ORCL), Cisco Systems Inc (CSCO) and finally EMC Corp (EMC) provide quintessential examples of a true bubble. To clarify what they are depicting, we see the stock price closely correlate and track earnings both before and after the bubbles. However, during the bubble periods we see clear and undeniable insane valuation that fundamentals do not justify.
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Wednesday, May 29, 2013
Stock Market Bubble - Not So Sweet Sixteen / Stock-Markets / Liquidity Bubble
By: Doug_Wakefield
"In the spring of 1720, Isaac Newton stated, "I can calculate the motions of the heavenly bodies, but not the madness of people." On April 20, accordingly, he sold out his shares in the South Sea Company at a solid 100 percent profit of £7,000. Unhappily, a further impulse later seized him, an infection from the mania gripping the world that spring and summer. He reentered the market at the top for a larger amount and ended up losing £20,000. In the irrational habit of so many of us who experience disaster, he put it out of his mind and never, for the rest of his life, could he bear to hear the name South Sea." [Manias, Panics, and Crashes: A History of Financial Crises, Fourth Edition (2000), Charles P. Kindleberger, pg 31]
Monday, May 13, 2013
Central Bank Asset Price Bubbles Inflating Faster Than GDP / Economics / Liquidity Bubble
By: Michael_Pento
Global central banks have clearly demonstrated the ability to re-inflate stock and real estate bubbles. Global stock markets are roaring ahead of their economies and real estate prices are quickly rebounding from their recent collapse. However, rock-bottom interest rates and massive money printing have yet to show an aptitude for creating sustainable GDP growth.
Thursday, May 02, 2013
How the Fed Creates Stocks Bull and Bear Markets / Stock-Markets / Liquidity Bubble
By: Clif_Droke
Bull and bear markets don't just happen - they're created by the Federal Reserve. While few investors dispute the power that Fed interest rate policy has on the market, the extent to which it influences the direction of stock prices in both directions is often downplayed. Moreover, the health of the economy is often decided by the Fed's interest rate policy.
Friday, April 26, 2013
Which Market Bubble is Larger - Stocks or U.S. Treasury Bonds / Stock-Markets / Liquidity Bubble
By: J_W_Jones
Today we have a plethora of companies reporting earnings and are moving through the 1st Quarter earnings season at a rapid pace. Thus far, earnings have been far from exciting and have made the previous 2013 forward earnings estimates laughable.
The only way we get to the proposed valuations is through multiple expansion which is simply going to require the Federal Reserve to continue to pump $85 billion into Treasury’s and MBS securities each month. I am confident they will comply.
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Thursday, March 07, 2013
Is China the Biggest Bubble in Human History? / Stock-Markets / Liquidity Bubble
By: Bill_Bonner
Dow up 125 points yesterday, to a new all-time record.
Why? What's behind it? The economy is not so hot. Why the red-hot stock market?
China is back in the news. A new report from CBS's "60 Minutes" documents the extent of the ghost cities in China – miles and miles of empty highway, office towers, apartments and malls. Analysts are talking about the biggest real estate bubble in history!
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Saturday, February 09, 2013
Monetary Flood, Nothing At All, Then All at Once / Stock-Markets / Liquidity Bubble
By: Adrian_Ash
Where money was tight, suddenly it's all arrived at once. Just like trouble does...
Everywhere we look, investors suddenly see nothing but blue skies, plain sailing ahead. Their change of heart makes us nervous, writes Adrian Ash at BullionVault.
New York's S&P index is back where it stood in July 2007 - right before the global credit crunch first bit, eating more than half the stock market's value inside 2 years...
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Tuesday, September 25, 2012
Investor Rules for Avoiding Stock Market Bubbles / InvestorEducation / Liquidity Bubble
By: Casey_Research
Dan Steinhart, Casey Research : Warren Buffet's #1 rule of investing is "Don't lose money."
It's good advice, though not to be taken literally; all investors lose on occasion. Still, it is a worthy goal for which to aspire. And to have any chance of reaching it, you must learn how identify and avoid bubbles.
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Sunday, July 29, 2012
Market Bubbles and the Titanic Betrayal of Public Trust / Stock-Markets / Liquidity Bubble
By: Raul_I_Meijer
Robert Shiller, co-creator of the Case-Shiller index for US housing and author of Irrational Exuberance, has an interesting perspective on markets. Unlike the vast majority of economists, he recognizes both the role of speculative fervour in driving prices to over-reach themselves as a bubble develops and the fact that bubbles and their aftermath are swings of positive feedback inherently grounded in ponzi dynamics. As such, his position has considerable overlap with ours at The Automatic Earth:
Friday, July 27, 2012
Four Ways To Not Lose Money In A Bubble Economy / Stock-Markets / Liquidity Bubble
By: Money_Morning
Many experts claim we're not in a bubble economy because they can't see the "bubble."
Why is beyond me.
The bubble is so enormous right now that any serious bailout attempt would have to encompass the entire shootin' match or roughly $600 trillion to $1.5 quadrillion ($1,500,000,000,000,000) in order for it to work.
Wednesday, March 30, 2011
Commodities, Another Bubble that Breaks the World? / Commodities / Liquidity Bubble
By: Clif_Droke
In 1931 a financial writer named Garet Garrett wrote the now classic book, “A Bubble That Broke the World.” Garrett’s contention was that the Great Crash of 1929 was made possible by the Federal Reserve’s monetary policy. Eighty years later another Fed-induced crisis is forming which, if allowed to continue, threatens to again break the back of the U.S. economy.Read full article... Read full article...
Saturday, March 26, 2011
Unintended Consequences of Central Banks Money Printing, Bubbles in Emerging Markets / Stock-Markets / Liquidity Bubble
By: John_Mauldin
The central banks of the developed world are printing money and are engaged in a very-low-interest-rate regime. What does that mean for emerging markets? It is more than just a dilemma, it is a tri-lemma – they have problems not just coming and going but also sitting still! I am in Zurich tonight after a long day, with a 4:30 AM wake-up call to get back home, but deadlines are deadlines. So, to make this one easier on me as well as hopefully instructive for you, you will get chapter 15 of my new book, Endgame, in which coauthor Jonathan Tepper and I speculate about the future of emerging markets in general and investments in them in particular. We once again are on the New York Times best-seller list this week, by the way (thanks to many of you).
Monday, February 14, 2011
Viral Bubbleomics: Debt infected Housing infected Oil …Now Gold / Stock-Markets / Liquidity Bubble
By: Andrew_Butter
This article, references two articles put out recently, one on oil and one on how America has been financing its trade deficit. The only place that published them was Market Oracle:
Saturday, February 12, 2011
Bernanke Bubblenomics Succeeds in Inflating Another Bubble, Get Those Wheelbarrows Ready / Stock-Markets / Liquidity Bubble
By: Mike_Whitney
The game is on. Two years of zero rates, limitless guarantees, and a $2 trillion drip-feed from the Fed, has lifted Wall Street from the canvas and put the speculators back in the thick-of-things. It's a miracle. Who would have thought that Bernanke could engineer another bubble this fast. But he has. Mergers and Acquisitions (M&A) are increasing, LBO's (Leveraged buyouts) are on the rise, revolving credit ("plastic") is expanding, and investors are scarfing up low-yield junk bonds wherever they can find them.
Friday, January 07, 2011
Emerging Bubble Alert: "Zero-down" loans to "credit challenged" applicants are on the rise / Stock-Markets / Liquidity Bubble
By: Mike_Whitney
Counterfeiting is an effective way to stimulate the economy, but the costs can be quite high. For example, if trillions of dollars in fake cash was injected into the financial system (undetected), we'd probably see the same type of thing that we see when a credit bubble is inflating; asset prices would rise, unemployment would fall, economic activity would increase, and GDP would soar. But when people figured out what was going on, investors would panic, the markets would crash, and the economy would go into a deflationary nosedive.
Tuesday, December 28, 2010
China Syndrome: A Building Bubble This Way Bloweth / Stock-Markets / Liquidity Bubble
By: Midas_Letter
The investment world has become obsessed with phenomena that cause catastrophic loss – so much so that a new language has evolved, subjugating old words to new meanings. Melt-downs, for example. Collapse. Bubbles.
Bubble, in fact, is now the word that classifies any asset class believed to be overpriced as a result of investment hysteria. Right now, we have the gold bubble, the silver bubble, more generally, the commodities bubble. The real estate bubble, now burst, precipitated the world financial crisis of 2008, which, according to most financial press, is now over. Strange, that, since unemployment remains rampant, home prices are still at rock bottom, and earnings for any corporation who didn’t get stimulus cash to superficially improve their balance sheet optics, are non-existent.
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Friday, October 29, 2010
Debt Bubbles and the Commodities Bull Market / Commodities / Liquidity Bubble
By: Frank_Holmes
The “World’s Greatest Investment Event,” the 2010 New Orleans Investment Conference kicked off on Wednesday as gold and natural resources investors descended on the Crescent City for answers to today’s market questions.
The list of speakers for this year’s conference reads like a who’s who of the natural resources and commodity world—Dr. Marc Faber, Newt Gingrich, Dennis Gartman, Dick Armey, Peter Schiff and others.
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Saturday, August 14, 2010
Stocks, Housing and Economy, Mass Delusion American Style / Stock-Markets / Liquidity Bubble
By: James_Quinn
"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." - Charles Mackay- Extraordinary Popular Delusions and the Madness of Crowds
The American public thinks they are rugged individualists, who come to conclusions based upon sound reason and a rational thought process. The truth is that the vast majority of Americans act like a herd of cattle or a horde of lemmings. Throughout history there have been many instances of mass delusion. They include the South Sea Company bubble, Mississippi Company bubble, Dutch Tulip bubble, and Salem witch trials. It appears that mass delusion has replaced baseball as the national past-time in America. In the space of the last 15 years the American public have fallen for the three whopper delusions:
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Friday, May 28, 2010
Central Banks Blowing Asset Bubbles / Stock-Markets / Liquidity Bubble
By: Puru_Saxena
BIG PICTURE – Let’s face it; central banks are blowing another asset bubble. As if two burst bubbles in the prior decade are not enough, the money maestros have decided to fuel another speculative orgy.
Let there be no doubt, both the technology and real-estate bubbles were spawned by cheap credit and it is now clear that the central banks have learned nothing from those two episodes. Despite the fact that near-zero interest-rates caused the previous mishaps, the central banks are (once again) pursuing a suicidal monetary policy. By keeping interest-rates well below the rate of inflation, the officials are encouraging speculation, thereby sowing the seeds of yet another asset bubble.
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Friday, April 09, 2010
Deflation, Inflation, Hyperinflation, Bubbles and Gold / Economics / Liquidity Bubble
By: Andy_Sutton
Sometimes a picture really is worth a thousand words, even if it is only to prove a point that common sense dictates should have been won a long time ago. But common sense seems to be in short supply and not only has the point not been won, it isn’t even being discussed right now. Yes, it is the age-old debate on where price inflation comes from. It is also a foregone conclusion that the US is heading towards a Weimar style hyperinflationary depression. Left to normal circumstances, that is logical conclusion. However, there are several developments that point to the possibility of another deflationary depression, similar to the 1930’s. We’ll get to that later. For starters, let’s put to bed (hopefully) once and for all where price inflation comes from.
Thursday, March 25, 2010
What if the Stock Market, Housing and Economy Since 1970 Was Just a Big Bubble? / Stock-Markets / Liquidity Bubble
By: Tim_Iacono
One of the things that many people go through their entire lives without ever realizing is that conditions haven’t always been the way they remember them to be. Due to the length of a typical lifetime and the number of those years that individuals are productive, it’s reasonable to think that someone in their mid-60s could retire today and look back at the last 40 years only to conclude that what they just experienced was normal.
Friday, January 22, 2010
BubbleOmics, The Ancient Art of Spotting Financial and Commodity Market Bubbles Before They Pop / Stock-Markets / Liquidity Bubble
By: Andrew_Butter
George Soros has been playing with bubbles since when I was a baby. The Great Sage once said that “recognizing a bubble is not hard, but figuring out when it will pop is guesswork”.
According to his son he was being economical with the truth. Apparently how his dad tells a “pop” is coming is that his back starts to hurt like crazy, so then he goes out and does things like break the Bank of England.
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Friday, November 27, 2009
Fed in Denial on Existence of Asset Bubbles / Stock-Markets / Liquidity Bubble
By: Mike_Larson
Ever see one of those “See no evil, hear no evil, speak no evil” statues or pictures? The ones with the three monkeys, one covering his eyes, one covering his ears, and one covering his mouth?
That’s pretty much what the Federal Reserve appears to be doing now when it comes to the asset markets …
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Wednesday, November 25, 2009
The Financial Markets Liquidity Bubble Religion / Stock-Markets / Liquidity Bubble
By: Brady_Willett
The dreaded “L” word – liquidity – has once again become the word to explain every major movement in every major asset class. Don’t understand why equities are outpacing the fundamentals – liquidity! Can’t grasp why crude oil is up even though the demand outlook remains exceptionally weak – liquidity! Baffled by low or negative U.S. bond rates, the surging price of gold, and the booming Chinese real estate market - liquidity, liquidity, liquidity!
Monday, November 16, 2009
Only a New Credit Bubble (that isn’t coming) Staves Off Deflation / Economics / Liquidity Bubble
By: Chris_Galakoutis
The next issue I wanted to write about in this post is this whole notion of ballooning reserves at the Fed, and how we get to hyperinflation if this money were to ever be lent out and multiplied across the economy. Reserves might have gone from 10 Billion in August 2008, to about 1 Trillion today, but in fact, this money is not being lent out – it is simply sitting there at the Fed, earning interest.
Friday, November 13, 2009
Latest on U.S. Interest Rates, the Fed and Asset Price Inflation / Stock-Markets / Liquidity Bubble
By: Mike_Larson
When it comes to Lay’s potato chips, the saying goes, you can’t eat just one.
And when it comes to the interest rate and financial markets, I just can’t focus on one thing this week. There’s just too much going on.
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Wednesday, November 11, 2009
Failure of Economic Policy Blowing More Financial Bubbles and Next Crisis / Economics / Liquidity Bubble
By: Claus_Vogt
Since last year’s collapse of the banking system, hundreds of billions of dollars have been spent to bail out some of the major players. Additionally, governments all over the world, and their central banks, have implemented huge stimulus programs to combat the consequences of the burst real estate bubble.
Friday, November 06, 2009
Finance's Euphoria: The Epilogue -- What Record High Dollar Volume of Trading Says About Confidence / Stock-Markets / Liquidity Bubble
By: EWI
The following article was adapted from the November 2009 Elliott Wave Financial Forecast and reprinted with permission here. Until Nov. 11, you can read the rest of this brand-new report for free, during Elliott Wave International's FreeWeek of U.S. forecasts. Learn more about FreeWeek, and download the rest of this report and others for free here.
Tuesday, October 20, 2009
Recognizing a Bubble, the Dynamics of Free Money / Stock-Markets / Liquidity Bubble
By: Axel_Merk
The government has splattered lots of money onto the economy, working hard to reflate the bubble that got us into trouble in the first place. The Dow is back at 10,000. What are you to do? If you are a wealth sustainer, you should not be drawn into the market simply because it has gone up. Instead, take a step back, look at the market dynamics and see what risks you can afford to take. I am not preaching to hide in a hole awaiting armageddon – there are always opportunities, but they may be very different from what the pundits may want you to believe.
Wednesday, September 30, 2009
Fed Fuelling the Next Stock Market Bubble / Stock-Markets / Liquidity Bubble
By: Claus_Vogt
Every few weeks the world’s most powerful and influential central bankers — those in charge of the world’s number one reserve currency, the U.S. dollar — come together in what’s called the Federal Open Market Committee (FOMC).
They discuss the economy, interest rates, financial markets and whatever else they deem important. Then they decide to set the Federal Funds Rate at a level they think is appropriate.
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Friday, September 18, 2009
The Only Way to Profit From a Stock Market Bubble / Stock-Markets / Liquidity Bubble
By: Money_Morning
Martin Hutchinson writes: Former U.S. Federal Reserve Chairman Alan Greenspan said it was impossible to tell a bubble while you were in it. Well Alan, I’ve got news for you: We’re in one now.
Thursday, September 10, 2009
Bubbles In Stocks,Commodities and Real Estate? / Stock-Markets / Liquidity Bubble
By: Andrew_Abraham
Has too much liquidity throughout the world caused bubbles in stocks,commodities and real estate again? I have my opinions and others have theirs.What can be considered interesting is that a high level official from the Bank of China has come out publicly and stated in his opinion there are “Asset Bubbles throughout the world”.
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Tuesday, August 04, 2009
The Next Three Government-Backed Asset Bubbles Unveiled / Stock-Markets / Liquidity Bubble
By: Q1_Publishing
The good times are back!
U.S. GDP declined at a mere 1% annualized rate, after inflation, between April and June.
Read full article... Read full article...
Sunday, July 19, 2009
Marc Faber on the Next Bubble, It's Government Spending and Debt / Economics / Liquidity Bubble
By: LewRockwell
Julie Crawshaw writes: Some economists think that another bubble is what’s needed to get the economy moving again.
Gloom, Boom and Doom publisher Marc Faber said this is ridiculous, and that the Federal Reserve – which he holds responsible for creating the housing bubble – wants to do it all over again.
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Friday, July 17, 2009
The Seven Immutable Laws of Bubbles: Example, Housing Markets in USA, UK & Dubai / Housing-Market / Liquidity Bubble
By: Andrew_Butter
The cycle of bubble and bust in housing is drawing to a close. For many the ferocity of the bust and the collateral damage that followed was a shock, but bubbles and busts are not new; chances are there will be more.
I got interested in bubbles in early 2008 trying to figure out why my model of real estate prices that had worked perfectly for ten years was saying that prices in Dubai which is where I was at the time, "should" have been 30% less than where they were.
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Thursday, June 25, 2009
Can the "Mimetic Effect" Explain Speculative Bubbles? / Stock-Markets / Liquidity Bubble
By: MISES
Jeremie T.A. Rostan writes: For the enemies of freedom in general , and of the economy in particular, the recent crash has been the occasion to re-assert that markets in general, and financial ones in particular, are inherently unstable — and thus dangerous — because they are driven by irrational behaviors such as the "mimetic effect," which, according to many experts and politicians, explains how Wall Street booms and then busts.
Tuesday, June 02, 2009
An Avalanche Of Cash Is Set To Slide Triggering a Flood of Liquidity / Stock-Markets / Liquidity Bubble
By: Joseph_Dancy
Last month we read a book by Mark Buchanan entitled “Ubiquity—Why Catastrophes Happen.” It was mentioned by financial commentator James Grant in one of his investment reports. The book does not deal directly with financial markets—just physical systems—and attempts to identify the similarities present when unexpected events surprised observers, whether they were earthquakes, landslides, forest fires, tidal waves, political events, or financial events. In each case a small shock triggered an unexpectedly large response out of all proportion to what was expected.
Tuesday, April 28, 2009
The Housing & Economic Bubble in Real Life / Economics / Liquidity Bubble
By: LewRockwell
Myron Weber writes: As my wife and I were on our way to the home improvement store this past weekend, I saw the economic bubble that brought about the current bust illustrated in stark reality. Near our home in Orange County, California, driving on a beautifully-paved, 6-lane street with a landscaped median and surrounded by relatively new housing developments, the conversation went something like this:
Wednesday, October 15, 2008
Wall of Liquidity Was Wall of Leverage / Stock-Markets / Liquidity Bubble
By: Adrian_Ash
"What we thought was a wall of liquidity, turned out to be a wall of leverage." – Paul Davies in the FT , quoting "a number of senior bankers..."
WANNA KNOW WHY your stock market shares keep on tumbling, right back to what one Fox news anchor just called "the absolute lows" from the end of last week?
Read full article... Read full article...
Monday, October 13, 2008
How Central Banks Destabilized the World's Economies / Economics / Liquidity Bubble
By: Gerard_Jackson
The crisis that America finds itself in is not political in origin nor can it be laid at the feet of any individual or party. The whole world, including Europe, is experiencing a massive monetary disruption. Moreover, it is not the first time that the world has been shaken by a financial crisis. It happened in 1824 and it happened again after WW I. What is depressing is that though these crises have but one single cause today' s central bankers and legions of economists find themselves utterly clueless, readily taking as a causes those data which are in fact symptoms of a very deep monetary disorder. Read full article... Read full article...
Monday, September 15, 2008
The REFLATION Dam Has Burst! Monetary Flooding Anticipated… / Economics / Liquidity Bubble
By: Ty_Andros
Oh what a two weeks it has been. It is a CHALLENGING task to figure out the latest FINANCIAL and Geopolitical curveballs that need to be interpreted. The activity in the last two weeks is EXACTLY why the “Crack Up Boom” series has continued. They stepped over the line with Bear Stearns (they had to) and the next dominoes to fall have done so. As Fannie and Freddie continue on the path to their demise, and that of the US dollar, the money printing now must go into a gear that is feared by the US Treasury and the Federal Reserve. Read full article... Read full article...
Saturday, August 09, 2008
Stocks and Commodities Bubbles, Parabolic Moves, and Resulting Collapses / Stock-Markets / Liquidity Bubble
By: Tim_Wood
In the chart below I have included a weekly chart of the Nasdaq 100. Beginning at the 4-year cycle low that occurred in October 1998, we can see that price rose sharply in February 1999. In fact, in that 4-month period this index moved from a low of 1,063.74 up to 2,150.83. This was a 102% advance in only 4 months. As we moved into October of 1999 this advance was much more orderly, but still managed to advance another 400 points during this time period and in doing so the Nasdaq 100 had advanced 143% in a mere 12 months. As this move received more and more attention more and more people jumped on the bandwagon with the hottest tech stock. As a result, a bubble began to form. Read full article... Read full article...
Tuesday, July 15, 2008
Profit from Economic Boom and Bust Cycles / Economics / Liquidity Bubble
By: Brent_Harmes
Rather than study theory, let's watch the news!
Here is a Yahoo Finance Video . This is exactly the stuff that Mike Maloney was predicting on stage years ago - and it is happening today! Mike sounded slightly nuts when he was talking about this during the housing boom. Few forecasters anticipated that this boom ever really would bust, but the credit balloon can only inflate so far and then it wants to deflate. This has happened repeatedly throughout history.
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Tuesday, June 17, 2008
Lousy Monetary Policy and Economic Commentary Due to Ignorance / Economics / Liquidity Bubble
By: Gerard_Jackson
Some readers think I'm exaggerating the dismal state of economic debate in Australia. Alas, if that were only true. Last April The Australian referred to P. D. Johnson, aka Henry Thornton, as opining that current economic policy with respect to inflation could cause a recession. He went on to argue that we could be seeing the return of 'Goodhart's law'. ( The Australian , Is he on the right track? , Graham Lloyd, 26 April 2008). Johnson defines this law as "Any statistical relationship that is relied upon will cause changes of behaviour that?changes the?relationship". ( The Return of the Check List ). This is really bad stuff.Read full article... Read full article...
Tuesday, June 17, 2008
Financial Market Bubbles- From Euphoria to Credit Collapse Revulsion / Stock-Markets / Liquidity Bubble
By: John_Mauldin
What does a bubble look like and how do they end? In this week's Outside the Box, James Montier of Societe Generale in London looks at not only the psychological analysis, but also at the propensity for commentators to continually proclaim the end of the problem and a resumption of business as usual. He includes a fascinating piece from Marc Faber documenting the various quotes about how well the economy was doing from 1928-32. This makes for fun, if a little sobering, reading.
To quote from his summary: "We have seen the heads of virtually all financial institutions stand up over the last few months and claim the worst is behind us. Why would anyone listen to these people? They didn't see the disaster coming, and yet somehow they are qualified to tell us it is all alright! Perhaps I am just unduly sceptical, but this reeks of a conspiracy of optimism. The recession has barely started, let alone reached its nadir. The market moves of late have all the hallmarks of a classic sucker's rally. This isn't discounting the recovery, this is denial! Far from being behind us, the worst may well still be ahead!"
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Monday, June 09, 2008
The Wealth Effect Goes into Reverse / Economics / Liquidity Bubble
By: Chris_Ciovacco
In our current global economic environment, the number of moving parts for the individual investor to track and attempt to analyze is often overwhelming. Without a systematic approach to the global asset markets, it is virtually impossible to discern the relative importance of an almost infinite number of inputs. While it is a tall order, we'll attempt to highlight the some of the key moving parts of the economic engine in terms of the possible long-term impact on your portfolio and purchasing power.Read full article... Read full article...
Tuesday, May 27, 2008
Greenspan's Incessant Contradictory Ramblings / Economics / Liquidity Bubble
By: Brady_Willett
In yet another attempt to defend his legacy, Greenspan resorts to semantics and outrageous contradiction ( FT Article ). On the topic of asset ‘bubbles' – which Greenspan preferred to completely ignore as they acquired air and help reflate after they burst – he asked the following: “Is there a bubble today in food, energy, gold, currencies? If so, what specifically should we do about it?”
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Friday, February 08, 2008
The Financial Tsunami Endgame: Unregulated Private Money Creation - Part IV / Stock-Markets / Liquidity Bubble
By: F_William_Engdahl
Asset Securitization - The Last Tango: What had emerged going into the new millennium after the 1999 repeal of Glass-Steagall was an awesome transformation of American credit markets into what was soon to become the world's greatest unregulated private money creation machine.
The New Finance was built on an incestuous, interlocking, if informal, cartel of players, all reading from the script written by Alan Greenspan and his friends at J.P. Morgan, Citigroup, Goldman Sachs, and the other major financial houses of New York . Securitization was going to secure a “new” American Century and its financial domination, as its creators clearly believed on the eve of the millennium.
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Friday, February 01, 2008
US Fed Insanity - Bernanke Repeating the Same Mistakes as Greenspan / Economics / Liquidity Bubble
By: Peter_Schiff
Despite the fact that the Fed still believes that a recession is unlikely to occur, Bernanke & Co. followed up on last week's emergency 75 basis point rate cut with a 50 basis point kicker on Wednesday. Not to be outdone by the Fed's generosity, the House of Representatives and the Bush Administration slapped together a $150 billion “stimulus package”, which can only be delayed by the Senate's desire to join in the bead throwing. On Wall Street these actions were cheered as heroic, with praise and accolades for all (what could be more politically courageous than handing out free money in an election year.) In a recent poll, fully 78% of economists thought these policies were appropriate…while 18% thought that they were not aggressive enough.Read full article... Read full article...
Wednesday, January 30, 2008
Greenspans Unbelievable Response to Financial Market Turmoil Due to Formation of His Bubbles / Stock-Markets / Liquidity Bubble
By: Brian_Bloom
If you read the media article below (Greenspan interview) in context of an understanding that “energy drives the economy”, and in context of the rising trendline of the PMO oscillator on the 30 year Bond Yield monthly chart, you have to agree with Greenspan.
The third quote highlighted is almost unbelievable in its disingenuousness. The man is either unbelievably stupid or unbelievably dishonest or unbelievably obtuse. But the emphasis is on the word “unbelievable”. How else could these bubbles have formed, Mr Greenspan? Please explain.
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Monday, January 28, 2008
US Government Rescue Plan is Too Little Too Late as the Liquidity Bubbles Burst / Stock-Markets / Liquidity Bubble
By: Money_and_Markets
For politicians, the government's $150 billion stimulus package is a no-brainer. But for investors, it's a bomb that could greatly intensify the flood of disasters now unfolding. In my open letter below, I explain why. And in the days ahead, we will give you step-by-step instructions for an ark of protection that would make Noah proud. — Martin Read full article... Read full article...
Saturday, December 15, 2007
Liquidity Crisis Would Be Reflected in High Interest Rates, That hasn't happened! / Interest-Rates / Liquidity Bubble
By: Adrian_Ash
"... The Dollar's holed up in a hotel shooting neat vodka, whatever its "people" are telling the press..."
IT'S A COLD & BITTER TRUTH that the world's investment markets rarely act as sober as Britney Spears in a new wig.
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Wednesday, December 12, 2007
Greenspan: Housing and Stocks Bubbles Not My Fault / Stock-Markets / Liquidity Bubble
By: Brady_Willett
In today's Wall Street Journal former Fed boss, Alan Greenspan, attempted yet again to explain why he wasn't to blame for all the ‘bubbles' that coincidentally transpired during his tenure. In the piece Greenspan adds color to the same storylines he has harped on before, those being 1) that he took the Federal Funds rate down to 1% because he was scared of deflation, and 2) crazy investors, not him, are to blame for the euphoric booms in stocks and real estate while he was Fed boss.Read full article... Read full article...
Thursday, November 15, 2007
Will the Fed Continue to Inflate the Stock Market By Printing Money? / Stock-Markets / Liquidity Bubble
By: Greg_Silberman
The 100 Dollar Bill drop - In spite of money drops and liquidity injections we continue to see a volatile scary stock market. Will the Fed ultimately lose control and the stock market deflate or will the money presses continue to levitate the stocks at the expense of the Dollar?
The market got its ¼ point rate cut on Wednesday the 31 st of October and has been slaughtered ever since. Gee, thanks a lot Mr Bernanke!
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Thursday, October 11, 2007
US Economy Living in Perilous Times Due to the Financial Bubble / Economics / Liquidity Bubble
By: Richard_C_Cook
The U.S., as the only so-called superpower, exerts a decisive influence on the fate of the world. Today peace and stability are threatened by three giant problems whose outcome depends a great deal on U.S. decisions. These problems are linked to each other synergistically in ways that increase the overall danger. Read full article... Read full article...
Tuesday, September 25, 2007
Global Housing Markets Burst As Risk is Being Repriced - Fingers of Instability, Part 7 / Housing-Market / Liquidity Bubble
By: Ty_Andros
In This Issue – 6 Fingers
- Federal Reserve and G7 Central Banks See The “FACE OF GOD”
- Unintended Consequences
- The 11% Solution, aka “Locusts”
- Under The Stealth of The Headlines!
- China and The Dollar!
- Important Conclusions
What's unfolding in the world of finance and economics is extremely interesting. As financial authorities try and contain the growing financial turmoil, illusions abound and thus confusion reins supreme. Confusion and uncertainty are the markets' worst enemy. This week we witnessed many things which have occurred very rarely in history and the response to them set in motion a game of dominoes which will be interesting to watch unfold. The “Fingers of Instability” are cascading through the financial system and where they ultimately leave us is at an opportunity of epic proportions.
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Thursday, September 13, 2007
Fed Policy on Asset Price Bubbles Inflation and Burst / Interest-Rates / Liquidity Bubble
By: Paul_L_Kasriel
Is Mishkin Mishuga* about Asymmetric Monetary Policy Responses?
In his treatise delivered at the Fed's recent Jackson Hole retreat ( Housing and the Monetary Transmission Mechanism ), Fed Governor Mishkin hues to the Greenspan party line of an asymmetric monetary policy response to asset-price bubbles. That is, monetary policy should not be used to prevent asset-price bubbles, but rather should be used to mitigate the effects on real economic performance from the bursting of the price bubbles.
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Tuesday, September 11, 2007
Housing and Credit Bubbles - Why the Fed is Such a Lousy Wizard of Oz / Housing-Market / Liquidity Bubble
By: EWI
Susan C. Walker of Elliott Wave International write: Central bankers who "follow the yellow brick road" end up in Jackson Hole, Wyoming, every Labor Day weekend for their annual symposium sponsored by – who else? – the Kansas City Fed. (Who can forget Judy Garland saying to her little dog, "Toto, I've got a feeling we're not in Kansas anymore," in the 1939 movie, The Wizard of Oz ?)Read full article... Read full article...
Wednesday, August 15, 2007
Fingers of Global Financial Markets Instability Returns! / Stock-Markets / Liquidity Bubble
By: Ty_Andros
Fingers of Instability – Series Introduction - FIRE!
This marks the return of the “Fingers of Instability” series begun in February of this year, as we look to see these emerging regularly over the coming weeks until they are priced into the market. First let's look at the “shortened” description of what they are from that issue of Tedbits:
This is a metaphor for the present structure of the Global financial systems as practiced by the G7 Central banks and Government Financial officials around the world. I read a missive from a prominent newsletter writer sometime in the last 6 to 12 months and he described a computer study of Sand piles. In this study they piled on grains of sand on a pile one by one. It went on to describe how the mound could grow one grain at a time, and was stable and that as it grew areas of instability emerged and that once it got to critical mass as little as 1 grain of sand could spark a complete collapse of either the whole pile, a major portion of the sandpile, or just a small part of the pile.
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Tuesday, August 14, 2007
Blame Central Banks For Sinking Stock Markets / Stock-Markets / Liquidity Bubble
By: Gerard_Jackson
For years I have been warning readers that monetary expansion would inevitably bring recession. This, I forewarned, would probably occur when central banks decided to apply the monetary brakes. This now appears to be the case: hence falling share markets. The problem, as I have explained numerous times, is the grim fact that central bankers in particular and the economics profession in general has no genuine understanding of the nature of interest. In addition, they believe that money is neutral and that a stable price level is necessary to avoid recessions. What we have here is a very dangerous cocktail of ignorance and economic fallacies that has brought the world to the brink of recession.
Monday, August 13, 2007
A Bull Market in Fools / Stock-Markets / Liquidity Bubble
By: Adrian_Ash
"...All financial bubbles need the rabble to pile in before the bubble goes bang. But something's amiss this time round..."
DAY TRADERS in spring 2000, shoe-shine boys in 1929, the "meaner rabble" in 1720's London ...
Glancing at the history of speculative bubbles, as we do all too often here at BullionVault , we find the ordinary sort in fact acts as the very pin itself.
The one thing needful at the top of each bubble, the rabble also take on the role of greatest sucker, too. Piling in as the smart money runs for the exits, the common-or-garden investor pays top price. He or she is then left holding the "asset" as its price collapses...and by that time, the Lear Jets have long since cleared the tarmac...taking the money with them.
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Monday, August 06, 2007
Japanese Deflation... A Global Liquidity Wild Card / Stock-Markets / Liquidity Bubble
By: John_Mauldin
This week in Outside the Box we turn our eyes on Japan and as promised offer a report by macro-maven and good friend Greg Weldon. Japan is the world's second largest economy and a major source of liquidity. While China has captured the headlines in Asia, Japan is still the big economic dog and supplier of capital on the block.
Greg argues that there is the potential for another asset bubble popping in Japan at the same time as we see our housing market and subprime mortgages implode. That could have considerable implications for world wide liquidity and the yen carry trade.
While this prints out longer than usual, it is mostly charts, as Greg likes to illustrate his thinking with lots of graphs. Follow his logic and reasoning. He is pointing out a potential problem that no one else I know is paying attention to. At the end is an offer for a trial subscription to his work, which I find quite valuable... John Mauldin, Editor
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Tuesday, July 03, 2007
Sub Prime Mortgage Woes, US Dollar, Gold and Liquidity / Stock-Markets / Liquidity Bubble
By: Christopher_Laird
As further revelations of sub prime derivative losses emerge after the latest Bear Stearns episode, the USD takes another hit. Indeed, Right after the Bear mess came out in the news, the USD has been falling badly. Obviously, gold eventually is reacting to the continuing decline. We are looking at a rapid test of the approximately 80.5 level of the USDX. Of course, it took gold a while to react to the weakening USD.Read full article... Read full article...
Friday, June 22, 2007
Predicting The Future / Stock-Markets / Liquidity Bubble
By: Investmentscore.com
As investors our most valuable tool is definitely the crystal ball, but unfortunately we have yet to find a wizard that is willing to part with his. So if we do not have a crystal ball can we predict the future?
In our opinion the answer is in part, yes. An absolute prediction would be to call specific events at specific times with impeccable accuracy. We can not do this, but we do believe we can reasonably hypothesize what we think will happen in the markets. But what will give us the insight we require to invest accordingly?
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Thursday, June 14, 2007
Higher Interest Rates Reflect Default Risk as Credit Boom comes to an End / Interest-Rates / Liquidity Bubble
By: Paul_Lamont
From our last report on the Panic of 1837, titled ‘ May 10th Credit Collapse ':
“In late 1836, the Bank of England concerned with inflation raised interest rates. As rates rose in England, credit tightened, and U.S. asset prices began to fall. On May 10 th , investors panicked and scrambled for cash.”
The markets are now tightening credit with higher interest rates. The 10 year Treasury Bond has recently confirmed its break out of the 1982-2006 trend channel.
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Thursday, June 14, 2007
Debt Bubble - Feeling Normal Yet? / Interest-Rates / Liquidity Bubble
By: Adrian_Ash
"Might this bubble in debt really have grown so enormous that somehow it can end – as no bubble before it – without bursting...?"
"TOO MANY PEOPLE think risk is dead, that they can't lose money anymore," said Tom Metzold, manager of the Eaton Vance Municipals Fund, at the Reuters Investment Outlook Summit in New York earlier this week.
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Wednesday, June 06, 2007
Global Liquidity Crisis when the Credit Boom comes to an End / Stock-Markets / Liquidity Bubble
By: Mike_Whitney
Stock markets around the world have been skyrocketing lately. In fact, Forbes reported on Tuesday that: “all 22 of the developed-world markets tracked by Morgan Stanley Capital International are in positive territory year-to-date… Emerging markets are looking just as flush. Of the 29 emerging market countries that MSCI tracks, only four — Argentina, Sri Lanka, Russia and Venezuela — are in negative territory.”There's just one little problem; the Commerce Department announced yesterday that that GDP in the first quarter was revised downward to a measly .6%.
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Wednesday, June 06, 2007
Are the Worlds Stock Markets and Commodity Bubbles Peaking? / Stock-Markets / Liquidity Bubble
By: Christopher_Laird
Get this:
- China is serious about slowing their stock bubbles. They just increased a stamp tax to .3% on stock sales, formerly a .1% rate. This is not a miniscule amount because it is assessed on every trade - they add up. China has raised interest rates repeatedly, and their senior economic leaders have stated that their stock bubbles are rising too fast. China intends to cool their bubbles. More on that, but they may be the ones to break the entire world financial bubbles - first - judging on the reaction to their February 9% stock declines that led to two weeks of serious Asian market crashes - and one 500 point drop in the US DOW - that led to so much volatility that Dow fell behind in the quotes for several hours that day.
Monday, June 04, 2007
In the Heart of The Stock Market Mania / Stock-Markets / Liquidity Bubble
By: Captain_Hook
This article was posted for the benefit of subscribers on May 15, 2007
That's where we are at present – right in the heart of the mania. Are we referring to the stock market mania in isolation? Heck no. We are referring to the source of all the manically derived asset bubbles floating round these days, that being the mother of all bubbles then, the credit bubble . And as Doug Noland correctly points out this week in his column, Credit Bubble Bulletin , and as alluded to above, it should be realized these bubbles include more than just ‘investments', but all sorts of things (collectibles), such as fine art . Of course the banking community does not care what people are buying and selling just so long as they are doing exactly that, and at an increasing rate if possible so their job of tinkering with growth rates is eased.
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Wednesday, May 30, 2007
GOLD THOUGHTS : Surge in Investing in Paper Equities, Tail End of the Boom? / Stock-Markets / Liquidity Bubble
By: Ned_W_Schmidt
Investing in paper equities has apparently become far easier. Either a stock will be taken private by a speculative investment fund or it will be purchased with money from China's foreign currency reserves. Investment gains have rarely been so assured. Not since internet stock bubble or Florida condo mania have investors faced such odds of winning. Combine those odds with a Federal Reserve dwelling in the la la land of core inflation creates a near perfect story for placing wealth into paper equities.
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Tuesday, May 22, 2007
Make That a Cheap Money Bubble to Go / Stock-Markets / Liquidity Bubble
By: Adrian_Ash
"...From Shanghai to Soho, the flood of cheap money is causing fresh mischief each day. Investors beware! Creating value is fast losing out to just taking profits..."
"WHY NOT SELL UP? He's been grilling cheese sandwiches for the last 40 years. Now his café and the apartment upstairs are worth £2.5 million [just shy of $5 million]. He can retire rich overnight!
"So what if Costa Coffee or one of the other chains move in? Okay, London's famously cool Soho district loses character...and it loses a little institution, too. But who cares? This guy certainly doesn't. He cashes out and never has to make a frothy coffee again.
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Monday, May 21, 2007
Central Bankers Playing A Global Game of Chicken with Inflation / Economics / Liquidity Bubble
By: Michael_Pento
Central banks across the globe have succeeded in creating a worldwide bull market in most asset classes and we now approach a watershed moment in international markets. Will central bankers keep fueling this rally by lowering interest rates and increasing the money supply, or will they opt to fight the inflationary spiral they created and cause this liquidity boom to dry up—sending asset prices correcting across the globe?Read full article... Read full article...
Sunday, May 20, 2007
Eau de Liquidity and the consequences of the spectacular boom in securitized lending / Interest-Rates / Liquidity Bubble
By: Michael_J_Panzner
Recent news reports highlight the difficulties some troubled borrowers are facing when trying to renegotiate payment and other terms with lenders. In many instances, the problems stem from the fact that the loans have been sliced, diced, and repackaged into mortgage-backed securities, which have then been sold to investors in the U.S. and around the world.Read full article... Read full article...
Saturday, May 19, 2007
The Dark Side of the Credit Boom / Economics / Liquidity Bubble
By: mises.org
"The bright side of the credit boom is an apparently expanding economy. Sooner or later, however, the boom is going to show its dark side. The gap between the credit and money induced increase in demand for and supply of resources becomes obvious."
by Thorsten Polleit
I. Introduction
Under today's government-controlled paper-money standards, the world's major economies have embarked upon an unprecedented expansion of credit, starting in the early 1980s. As credit growth has been outstripping economies' rise in output, total debt levels in percent of gross domestic product (GDP) have increased strongly.
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Tuesday, April 24, 2007
First Comes Denial – And Then Acceptance / Economics / Liquidity Bubble
By: Captain_Hook
Below is an excerpt from a commentary that originally appeared at Treasure Chests for the benefit of subscribers on Tuesday, April 10, 2007
It's no secret markets are dramatically affected by investor psychology. And it's also no secret the right investor psychology can cause prices to soar with a healthy liquidity backdrop, as was the case with both the tech bubble in 2000, and in real estate more recently. In fact, given participation rates in both of these bubbles was so high, it would not be a stretch to categorize them as manias in the truest sense of the word.
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Monday, March 12, 2007
Financial Markets Sell-off Fundamentals, Two Weeks Later / Stock-Markets / Liquidity Bubble
By: Michael_Pento
Nearly two weeks removed from the “scary” 500 point Dow drop, Wall St. Strategists have been correct thus far in saying the slide had nothing to do with foreign central banks dumping U.S. treasuries—that's not a problem yet . However, it should be clear that the decline has everything to do with the gradual contraction of global liquidity imposed by central bankers from the globe's fastest growing economies.
Central banks in China and Japan made moves to tighten liquidity and curtail the rampant growth in their money supplies-- with rumors from India that it may join in the squeeze. Gold's fall in the immediate aftermath was a validation of this view. To be clear, any deflationary trend will be slight and temporal in nature and I maintain my secular view that the trend towards rampant global inflation is still intact. However, it would be foolish to ignore the affect this liquidity squeeze will have on most markets, including gold.
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Thursday, January 25, 2007
Liquidity to drive global Bull Markets in 2007 / Economics / Liquidity Bubble
By: Clif_Droke
It may not be apparent yet, but the story of the next six months will be the improvement in monetary liquidity and the subsequent bull market in stocks that accompanies it.
The previous two years were notable for the decline in monetary liquidity as shown in the Federal Reserve money supply statistics. It almost seemed that the Fed wanted to bring the economy to the very brink of recession before priming the credit pump once again at the last possible minute. The Fed very nearly succeeded in bringing about a recession but thankfully this threat has now been averted. Listening to some mainstream economists and financial analysts talk, one gets the impression that the threat of a further economic slowdown is still a very real one. But such is not the case, a point we'll try to make in this commentary. Indeed, monetary liquidity hasn't looked this good in years.
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