just post under the steve nutchinson ID please. No need to switch back and forth
LOL you want to talk GDP? We're going to do 2% at best for 2014. That's if you take inflation numbers at face value. Market cap to GDP is now more than double the historical norm. So about 17 years of 4.5% growth is *already* priced in, idiot.
let that sink in for a minute. Years ago people would have scoffed at the idea the Fed would directly and intentionally create an equity bubble. Now it's accepted by all. We still have a few old school holdouts who think fundamentals are relevant to stock prices. They are quickly being exterminated. 10 years from now nobody will believe that stocks ever could go down, or that anyone ever thought stock prices should relate to the economy. Big, important victory by the Fed.
This market broke long ago man. Everything that was always true about the markets is in doubt now. Valuation metrics that worked for decades are useless now. This is completely uncharted territory. The one thing we can all agree on is that stocks are insanely overvalued. However that means less than nothing about where the stock market will go.
the reason it could be different this time is the Fed has intentionally created the bubble, they have stated this explicitly, so if it's going to pop they're not going to let it happen easily.
John Hussman says it's a bigger bubble than 2000 (seriously) because the median stock p/e is higher. Ha.
Nobody could ever have believed this. What if 30 years ago you told someone savers would be making 0% for FIVE YEARS with no end in sight? Would they have said "that's a healthy situation"? Wow. Just... wow.
Having said that I think we're about to see the market explode to the upside soon. 2500 S&P easy.
Remember what I said earlier- this market has changed for all time now- fundamentals that you used to think matter don't matter anymore.
That's an earth shattering development and one that people would never have foreseen 20 years ago. Who would have thought back then you could have people earning 0 on their savings and nobody would see any harm in that, and that stocks would go up simply because of 0% rates? Truly bizarre, and noteworthy. Capitalism has been defeated by the Federal Reserve Board.
Sorry, I only wanted responses from people who actually have skin in the game, should have specified that.
they're not going to do it though. Even though it's obvious it must be done. They're just going to keep burying this country.
I believe they will not need to because they no longer invest in equipment and machinery since the real economy is permanently dead.
Stock prices are now permanently linked to supply and demand. Supply of stock is decreasing due to buybacks and demand is insatiable because of yield starvation. There is literally no possible way we could ever drop even as low as 1970. Not even possible. We could hit 100,000 on S&P in 10 years. The numbers don't mean a thing anymore.
The economy would be so much better off. Let some #$%$ businesses fail, let some great businesses prosper, stop the constant bailouts and manipulation, let people earn a reasonable interest rate on their savings instead of forcing them to overpay for equities. It's really not that complicated, unless you have a PhD in economics which apparently is like getting hit in the nuts with a dumb stick.
The reason they really can't raise is it would cause a 40% stock market drop. Everybody I talk to is buying stocks because they go up 1% per week and they don't even make 1% per year in fixed income.
This has become a complete farce now.