Here’s Why Central Bank and Stock Market Hedonism Won’t Be Stopped For At Least Another Decade
We are currently in year 6 of the current secular bull market. Let that fact sink in. The secular bull market that started in 1982 and ended in 2000 went on for 18 years, with the S&P 500 going up 10x in that time period. As it stands now, from the beginning of the current secular bull market, defined as the breakout of the S&P 500 to new all-time highs in 2013, the S&P is up less than 100%. Very simply put, bears are, at a minimum 12 years early with the various pieces of analysis they are continuously throwing at the market wall, hoping something will stick. On top of that, central bankers worldwide are more dependent on equity markets appreciating in value in order to sustain economic growth than ever. While its very easy to understand the bearish argument of all the economic moral hazard this entails, it doesn't mean that the global economic system will collapse on itself tomorrow. Quite the contrary, it means that global central bankers are more incentivized than ever to keep this train going at warp speeds into the edge of infinity and beyond. These guys are getting together begging the inflation gods for asset appreciation while juicing their respective economies with every bit of monetary and now fiscal stimulus measures they can think of. You want the big story of the next economic decade? It's fiscal stimulus measures gone crazy as world governments borrow money cheaply to build everything they have ever dreamed of, creating an endless stream of job growth, economic prosperity and glittering cities the world has never seen. All funded by artificial stimulus measures that keep the cost of money next to the zero. If the long end of rates starts getting out of control they cap rates. They are going to tinker, modify and create economic Frankenstein monkeys that are going to have traditional students of economics doing Exorcist like tongue dances and neck twists. Central bank hedonism won't be stopped. Invest accordingly. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where...
The Latest In A Long String Of Bearish Billionaires You Shouldn’t Listen To
The current secular bull market has been masterful in its ability to keep the vast majority of market participants completely off-balance for the entirety of its inception. Whether due to macro misinformation, geopolitical calamity, unprecedented economic events or downright disbelief in a market that has done nothing but move up, the number of so called "smart money billionaires" this market has punched in the face with its persistence on the upside has been epic in scope. Add another to the growing list. Well, actually, let's walk that back. Paul Singer has been a vocal bear on U.S. equities for a number of years now. Just today a headline came out about Singer hedging against an imminent market crash. The type of market crash that, according to Singer, will be brought on by excessive global debt paired with an imminent global economic slowdown. These types of blurbs from bearish billionaires has been a hallmark of the current secular bull market. Every month another billionaire decides that the wealth effect of an unstoppable bull market has gone on long enough, citing any number of economic statistics one can grab to justify their bearish stance. And every month, the market has caused these billionaire investors to walk away bowlegged and sore from its persistence in a single direction....UP. The number of bearish billionaires will only continue to grow as the market prepares for a near unprecedented move up in the coming months, built on the back of global QE, ultra-low interest rates, generally good earnings, massive misallocation of capital and an investor population that is clueless as to the power of this bull market, forcing investors to play catch up the longer it goes on. Keep the ear plugs intact. Invest accordingly. Zenolytics now offers Turning Points and ETF Pro premium service Click here for details. Disclaimer This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice. This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website. T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC...
Markets Going Nowhere Over The Past Month Has Created Two Camps Of Investors
What follows is a portion of yesterday's premium note. Almost exactly one month ago, the S&P 500 was trading at 2900. As we open September, the S&P 500 sits at 2906. We have gone exactly nowhere over the course of one month. All the meanwhile, we have seen a ratcheting up of every negative expectation one could have desired to witness over the past month. Everything from recessionary expectations with respect to the global economy, to the worst fears of a complete stalemate with U.S. and China trade talks. We have seen it all. The economic environment, at least from a headline perspective, has gone from hopeful to downright dreadful. Of course, with pessimistic headlines, economic data and zero hope for a trade deal comes the accompanying pessimistic sentiment. Here is one illustration of how investors are dealing with the markets going nowhere while headline risk blows up. Investors are buying puts. This is the 5 and 10 day moving average for the put/call ratio. Notice the ratcheting up of pessimistic sentiment expressed via put buying in early August that has sustained all the way up until today. Investors are preparing for a worst case scenario into the fall months by buying insurance. It's not just put options that are popular. Investors want insurance in numerous forms. Safe haven assets such as precious metals have become some of the best performers in the markets. And it's not just gold. Silver has taken on a parabolic trend to the upside in what is investors scrambling to catch up to what has been a missed opportunity to get into gold earlier this year. In fact, it wasn't too long ago that we discussed silver being a catch up trade for investors, as the latter stages of metal bull runs see speculators piling into more and more volatile asset classes. Investors are all-in on metals, with silver leading the charge, by far. The only thing in the markets that looks remotely close to silver, other than gold obviously, is the ultimate safe-haven asset play: U.S. Treasuries. And it's not foreign countries or institutions that are leading the charge, as detailed in the Wall Street Journal recently, it is individual investors who are the biggest hoarders of U.S. Government debt at this point in time. All the meanwhile, the S&P 500 is going nowhere. Let's go over that last point one more time for clarity: Everyone is seeking safety in the face of a symphony of negatives and stocks are allowing investors a cushy exit, just a few percent off all-time highs. It's almost as if equities are trying to convince investors to...