Irrational investing stock market crash
According to Gallop, economic confidence has never been higher in the general population. The US dollar has reached its highest peak in fourteen years. The surge in consumer confidence is primarily due to a collective sense of relief among Americans over the conclusion of the contentious presidential election season, as well as a feeling of hope regarding the prospect of a new administration taking office….
Consumers are ecstatic that the election is finally over. Many analysts believe the push through a major milestone, if it happens, confirms a strong new market trend; but what does history say about breaking past such major psychological resistance barriers? Some will argue otherwise, but hang with me a minute. So were the late s. Someone who sold their stocks in late , when the CAPE hit 28, missed out on the biggest free-money bubble bonanza in recorded history….
But history has said they should flee stocks when the Shiller PE is at extreme levels — like now. It is, however, not just the height of this peak, but the rate of rise that evidences irrational exuberance. This month, the US stock roller coaster ratcheted its way relentlessly up its highest hill one clanky link at a time. If the Dow closes above 20, this week, it will be the fastest 1,point rise in market history! Of course, the higher the market is, the less meaningful a thousand-point rise is.
Fastest, longest rise of the Dow in the past two years. Notice that it is not just prices that have shot up.
Sometimes prices soar while trading volume treads flatly.
In other words, there are very few traders, but those that are buying are willing to pay more. The last time we saw this kind of trading volume was …. Is the steepest climb in a decade irrational exuberance, particularly when accompanied by the highest trading volume since the Great Recession began?
Some market experts are espousing an unequivocally bullish outlook for equities.
Stock Market Crash: Definition, Examples,Cause,Impact
Apparently neither do others: Seems almost no one sees any reason for concern at all. In fact, as the article concludes: Someone has to be selling for all that buying to happen.
Why are insiders at banks and industrial companies selling their shares as if there were no tomorrow? Banks had a blistering run. Are their banks, perhaps, getting clobbered by the bond crisis that is now developing on the other side of all this trading? So, one more reason to exit bonds. Goldman Sachs believes the main effect from fiscal stimulus this late in the employment recovery curve will be to drive up interest and inflation.
That is why it was easy for the Fed to say it will increase its number of rate increases. I suspect its stated target will play catchup all year in to what the market is already doing with interest rates.
Also, a year Treasury above 3 percent in my view starts to bring into question some of the aspects of the stock market and of the housing market in particular. Will the insolvency of bond funds wipe out some banks and hedge fund managers, taking their stocks down to nothing, or will irrational exuberance in the stock market give way to panic? Right now, it appears to me that bonds will lead the crash.
Though I did say it might not happen until after the election when the Fed gives up and lets Trump take the fall. My predictions for were apparently badly off at least in timing for the first time in almost a decade.
This year, the euphoria is MUCH higher, so the fall could be much greater and be the kind that I anticipated for What if it repositions to this large degree, and then Trump changes his positions … again? Rapidly rising interest rates already mean the infrastructure program will become much harder to finance. He will need that capital to get the plan through a reluctant congress. He is already fading back on his own push for the plan … before he is even in office.
He has faded back on almost everything he has promised. Gathering around the stock ticker in the US stock market crash of Who knows what the maximum height or duration of irrational exuberance is because who knows how crazy people can get ; but I am certain of this much: NO significant economic reforms have happened since the start of the Great Recession.
Stock Market Crash of | Federal Reserve History
There has been no significant improvement in corporate earnings, just a lot of expanded debt to buy back shares in order to improve Price-Earning ratios, which still look terrible.
The entire market is but a poof of speculative hot air.
Books on Investing, Finance, and the Stock Market
But, for the time being, Merry Christmas. Cockroaches are out of woodwork like Doll, James Funds cockroach said on CNBS pimp parade " after tax profits could DOUBLE in Here's our Cookie Policy. How to report offensive comments. Home Contributors Newsletter Donate More Store ZH-TShirt Glossary Archive Manifesto RSS. INTRoDuCiNG ReBu, THe WORLD'S FiRST RoBoT CeO Dec 23, Do these graphs look like irrational exuberance?
Sometimes a visual says more than words: Knave Dave's blog Printer-friendly version Dec 23, Comment viewing options Flat list - collapsed Flat list - expanded Threaded list - collapsed Threaded list - expanded. Date - newest first Date - oldest first. Select your preferred way to display the comments and click "Save settings" to activate your changes.
TheVoicesInYourHead Dec 24, Just wake me up when the Fartman goes bigly long equities. Oh yes, and " long LARGE, long larrrrgggge RagaMuffin Dec 24, The calculus changes if you are "escaping" the yuan, the euro and the yen doesn't it? Iconoclast Dec 24, Fisherman Blue Dec 24, Create new account Request new password.
To prevent automated spam submissions leave this field empty. Zero Hedge Reads Acting Man Alt-Market Benzinga Boom Bust Blog Capitalist Exploits China Financial Markets Chris Martenson's Blog Contrary Investor Daneric's Elliott Waves Dr. New Comments So far they've pretty much swmnguy. No one is Cordeezy.
Progressive liberal democraps drendebe Every lamppost in the USA hootowl.
Illinois can right its ship Hal n back. See Mackinders Heartland Glyndwr will return. I was trying to get far from Doubleguns. The Democrats have no clue.
Democrats Get Crushed In Georgia Election Despite 7x Spending Advantage. Russian, NATO Jets In Near Standoff After F Buzzes Defense Minister's Airplane. At Least It Tried".
Will It Be Economic Collapse? We Won't Have To Guess Much Longer The Militarized Police State Opens Fire.
How to report offensive comments Notice on Racial Discrimination. RanSquawk News US Coast Guard says that Hurricane Cindy is no threat to Houston ship CBS CBS said to get single digit increases in upfront sales volume France name Benjamin Griveaux Secretary of State for Economy and General Electric GE and its JV partners receive more than USD 31bln General Motors GM sees disposal loss of up to USD mln on Peugeot Altice USA IPO deal size increased to Arista says ITC issues favorable 'initial determination' in Diamond Offshore put volume heavy and directionally bearish.
CBS gets single-digit increases in upfront sales volume, Bloomberg CBS heads to ad talks with upbeat pricing gains in prime time, Golar LNG call volume above normal and directionally bullish.
Anthem to reduce Obamacare offerings in Wisconsin, Indiana. Clovis Oncology CLVS Pushes to Highs Following Equity Pricing. Republicans mull inviting Democrats into U.
Pandora P Gains as Shares Recover from Multi-Year Lows. Fed's Harker asys could begin trimming balance sheet in September. Ollie's Bargain Outlet OLLI Guides FY Below Views. Discrimination Notice Cookie Policy.