Here's When The Economic Crisis Actually Ended JOE WEISENTHAL Link
There’s nothing going on today, so I’d like to quickly post something I’ve been meaning to post for well over a year but never had the moment. It’s about when the economic crisis ended.
The answer is Fall 2011.
Here’s proof.
The stock market, when priced in gold, bottomed in October 2011. This chart is important. Stocks represent a bet on human ingenuity. Gold is a rock. When stocks started outperforming gold again, it represented a belief that the crisis was over.
Homebuilding stocks bottomed for the final time at the same time, and then proceeded to take off.
Here’s the XHB ETF.
Finally, searches for the term “ZeroHedge” the pre-eminent doom blog peaked in November 2011.
So now you know. October/November 2011 is when stocks turned around against gold, interest in doom peaked, and the homebuilders really began to take off.
Let history show that that was the end.
PS: There’s one more interesting chart that corroborates this.
Real hourly earnings growth (as measured by year-over-year wage growth minus year-over-year change in the CPI) also bottomed in October 2011.
Any expressed market opinion is my own and is not to be taken as financial advice
Here's When The Economic Crisis Actually Ended JOE WEISENTHAL Link
There’s nothing going on today, so I’d like to quickly post something I’ve been meaning to post for well over a year but never had the moment. It’s about when the economic crisis ended.
The answer is Fall 2011.
Here’s proof.
The stock market, when priced in gold, bottomed in October 2011. This chart is important. Stocks represent a bet on human ingenuity. Gold is a rock. When stocks started outperforming gold again, it represented a belief that the crisis was over.
Homebuilding stocks bottomed for the final time at the same time, and then proceeded to take off.
Here’s the XHB ETF.
Finally, searches for the term “ZeroHedge” the pre-eminent doom blog peaked in November 2011.
So now you know. October/November 2011 is when stocks turned around against gold, interest in doom peaked, and the homebuilders really began to take off.
Let history show that that was the end.
PS: There’s one more interesting chart that corroborates this.
Real hourly earnings growth (as measured by year-over-year wage growth minus year-over-year change in the CPI) also bottomed in October 2011.
Catweasel say problem with devotion to squawk gurus,
is there always alternative narrative,
for which mouse congregation oblivious to.
So it never know if it on right train to a salvation.
Only its faith can guide it through.
Even if have cursory the understand,
best the short-term in a stock markets,
is a Nikkei.
And Mrs the Catweasel point to a inflection is a 2012/12,
That's true in a certain conventional sense. But the patient is still brain dead on life support, after that we can say the patient is doing pretty well.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
Yes, 2011 is when margin debt began to climb again. When interest rates are kept artificially low, banks and insurance companies are forced to sell fixed income products and seek out returns in stock markets. There are trillions of dollars worth of financial products with capital or income guarantees, written by large financial institutions whose long term liabilities were priced under the assumption of a long term interest rate mean of a 5%.
When rates are kept artificially low by the central bank, these institutions borrow in short term money markets or take on margin debt to purchase stocks. As soon as the interest rate returns to the long term mean of 5%, these institutions will need to sell stocks to cover their borrowings and the stock market will return to a P/E ratio that more closely resembles the risk weighted returns over treasury bills (between 7-9%), which would represent a drop of around 40-50%.
Catweasel say problem with devotion to squawk gurus,
is there always alternative narrative,
for which mouse congregation oblivious to.
So it never know if it on right train to a salvation.
Only its faith can guide it through.
Even if have cursory the understand,
best the short-term in a stock markets,
is a Nikkei.
And Mrs the Catweasel point to a inflection is a 2012/12,
which at the odds with squawk guru.
And a gold in same markets,
exactly at same prices at a same the time.
Thank the goodness for a squawks,
or the mouse would splash around like flounder,
wondering what a hell the going on.
Actually Business Insider is very much an alternate narrative to Squawk but you don't know the difference between the two because you can't understand monetarists. I note that you jump on anyone who has anything positive to say no matter how well reasoned but you never jump on anyone who has something negative to say no matter how poorly reasoned.
You have a bias a mile wide cat but you kid yourself that you are neutral.
You have been lying to yourself for years. Thank god no one listens to you.
HardTruths
27 Dec 2013, 10:20 AM
Yes, 2011 is when margin debt began to climb again. When interest rates are kept artificially low, banks and insurance companies are forced to sell fixed income products and seek out returns in stock markets. There are trillions of dollars worth of financial products with capital or income guarantees, written by large financial institutions whose long term liabilities were priced under the assumption of a long term interest rate mean of a 5%.
When rates are kept artificially low by the central bank, these institutions borrow in short term money markets or take on margin debt to purchase stocks. As soon as the interest rate returns to the long term mean of 5%, these institutions will need to sell stocks to cover their borrowings and the stock market will return to a P/E ratio that more closely resembles the risk weighted returns over treasury bills (between 7-9%), which would represent a drop of around 40-50%.
Interest rates are always set by the fed, so they are not artificially low, they are at the fed setting.
I will pay the margin loan point though. Margin loans worry me, they put the market at risk from a margin call en masse if there was a price correction.
Actually Business Insider is very much an alternate narrative to Squawk but you don't know the difference between the two because you can't understand monetarists. I note that you jump on anyone who has anything positive to say no matter how well reasoned but you never jump on anyone who has something negative to say no matter how poorly reasoned.
You have a bias a mile wide cat but you kid yourself that you are neutral.
You have been lying to yourself for years. Thank god no one listens to you.
Interest rates are always set by the fed, so they are not artificially low, they are at the fed setting.
I will pay the margin loan point though. Margin loans worry me, they put the market at risk from a margin call en masse if there was a price correction.
Catweasel say why does a squawk focus on Anglo Saxon as its the focal point?
And is a Nikkei not the "positive"?
So why squawk the authority?
While mice was tucking into feasts and shopping the sprees,
I will pay the margin loan point though. Margin loans worry me, they put the market at risk from a margin call en masse if there was a price correction.
Yes and now the FED has a giant time bomb on its balance sheet. What do you think would happen to the MBS and Treasuries if the FED stopped buying, or even unloaded?
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
I will pay the margin loan point though. Margin loans worry me, they put the market at risk from a margin call en masse if there was a price correction.
Yes and now the FED has a giant time bomb on its balance sheet. What do you think would happen to the MBS and Treasuries if the FED stopped buying, or even unloaded?
And if we stopped breathing we would die, so why would we choose to stop breathing?
The fed is expected to taper very gradually and allow the market to buy the MBS. Yellen is expected to be dovish.
Any expressed market opinion is my own and is not to be taken as financial advice
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