A Comparison of 3 Secular Bear Markets. It's time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high. The chart below is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000. [Click all images to enlarge] Here is the nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.
Want more from this author? Follow and be the first to know when they publish. Follow Doug Short (3,370 followers) Investment strategy, economy (You’ll be notified by email with new articles from your favorite authors.) New! Follow these related stocks (Click to add stocks to your portfolio) Insiders Sell Their Shares As Market Rallies. The corporate insiders running our country's publicly traded companies have been heavily selling their stock, which some market pros say speaks volumes about the veracity of the current rally. The market has moved sharply higher since August 27, when Fed Chairman Ben Bernanke suggested that he and his allies on the FOMC might consider another bond purchase program in order to juice economic activity.
The SPDR S&P 500 ETF (SPY), which includes holdings like Exxon (XOM), Apple (AAPL), Microsoft (MSFT), IBM (IBM), and Bank of America (BAC), is up 11% since Bernanke's speech. But, even as hedge funds and prop traders at the big commercial banks might be buying, one group of investors has carefully side-stepped this rally: corporate insiders.
The MBA-stamped professionals with the most knowledge and insight about their company's prospects -- the chief executives and chief financial officers -- have been busy selling their shares. Newman looked at two other sectors as well. BUFFETT’S FAVORITE VALUATION METRIC: STOCKS ARE MODESTLY EXPENSIVE. Warren Buffett was famously bearish in the late 90′s and has happened to be very bullish at some of the most opportune moments to be buying equities. The world’s most famous investor claims to have no market timing ability, but still manages to make remarkable deals when stocks are severely depressed. His latest ventures into Burlington Northern and Goldman Sachs are two notable crisis purchases that, in retrospect, appear like remarkable cases of market timing.
In a famous Fortune magazine article in 2001 Buffett disclosed his favorite market valuation metric and showed why he was bearish in the late 90′s and bullish at the time of this writing (which proved prescient again): “On a macro basis, quantification doesn’t have to be complicated at all. Below is a chart, starting almost 80 years ago and really quite fundamental in what it says. Buffett elaborated on the index explaining that stocks were cheap when the ratio declines to 70%-80%: First Foreclosure in Dubai. Five Trends for Q4. As I write this, the preliminary meeting for the Group of 20 largest economies is taking place.
U.S. Treasury Secretary Tim Geithner wants to force the Chinese to inflate the yuan to reflect true market levels. The yuan has been undervalued for years against the U.S. dollar in order to push their export based economy... This has been the leading factor in global monetary imbalances. And this battle between the two global heavyweights will determine a number of factors in the macro economic situation going forward. You can profit from the Wall of Worry. Today, I give you the five specific situations that will determine what goes up, what goes down, and where you seek your profits. Five topics of doom Helicopter Ben Bernanke has said that he will do all he can to create inflation out of deflation. Ben now plans to credit its own account with money it creates ex nihilo, or out of nothing. Many people think that this policy will destroy the dollar and spur inflation. 2. 3. 4. 5.
Good Hunting, Where Will the Positive Shock Come From? - As the economy sinks closer and closer to double dipping, David Rosenberg asks an important question: where will the positive shock come from that puts a long-term bottom in markets? Mr. Rosenberg notes that most of the major previous market bottoms coincided with some form of government intervention – monetary or fiscal policy: The question that must be answered is what the catalyst will be this time around — if at all. Policy rates are at zero. The deficit is at 10% of GDP and there is little public appetite for more fiscal largesse. If oil prices do come down sharply — a de facto tax cut — it would likely only come about if China heads into an economic downturn, which would carry with it its own set of complicated economic and geopolitical repercussions.Maybe, just maybe, we will have to wait for a bottom that is premised on a market that simply gets so cheap that it won’t even need the helping hand of Uncle Sam to precipitate a firm and durable bottom to feed off.
. (65,185 followers) The Markets Can't All Be Right. - MarketBeat. The Second Great Contraction - Kenneth Rogoff. Exit from comment view mode. Click to hide this space CAMBRIDGE – Why is everyone still referring to the recent financial crisis as the “Great Recession”? The term, after all, is predicated on a dangerous misdiagnosis of the problems that confront the United States and other countries, leading to bad forecasts and bad policy. The phrase “Great Recession” creates the impression that the economy is following the contours of a typical recession, only more severe – something like a really bad cold.
That is why, throughout this downturn, forecasters and analysts who have tried to make analogies to past post-war US recessions have gotten it so wrong. Moreover, too many policymakers have relied on the belief that, at the end of the day, this is just a deep recession that can be subdued by a generous helping of conventional policy tools, whether fiscal policy or massive bailouts. A more accurate, if less reassuring, term for the ongoing crisis is the “Second Great Contraction.” Will the Panasonic Tortoise Win the Lithium-ion Energy Storage R. "We'll be the first to bring to the market a storage battery for home use, which can store sufficient electricity for about one week of use," said Fumio Otsubo, president of Panasonic, in a recent interview with The Yomiuri Shimbun.
Could this little noticed pre-Christmas announcement by the President of Panasonic (PC) be a game changer in the energy storage sweepstakes? Personally, I hadn´t bought a Japanese share since the early 1990s, but this recent comment following Panasonic´s acquisition of Sanyo motivated me to take a look. Panasonic is not only the world´s top manufacturer of electronic products, but also a leading battery manufacturer with over $8.4 billion of energy storage device sales last year. Panasonic is the joint venture partner of Toyota (TM) for the Prius battery, while Sanyo makes hybrid batteries for Honda (HMC), Ford (F) and Peugeot Citroen. Panasonic´s President further commented that Panasonic and Sanyo had already test-manufactured a battery for home use.