by James Corbett
corbettreport.com
August 25, 2018
Let's party like it's 1999! No, better yet, let's party like it's 2018!
What? Haven't you heard the news? The US stock market bull run of 2009-2018 has just surpassed the 1990-2000 bull run to become the longest period of continually-rising stocks in US history.
It was March 9, 2009 when the market finally bottomed out after the Lehman crisis. That was the day that the S&P 500 hit precisely 666 (nothing to see here, conspiritards!). From that day on, both the S&P and the Dow have been on an uninterrupted upward trend, hitting all-time record high after all-time record high. For those keeping track at home, that's 3,453 days of uninterrupted gains as of last Wednesday.
To put that number in perspective, the previous longest-ever period of rising markets lasted 3,452 days, from October 12, 1990, to March 24, 2000. You might remember the latter half of that bull run as the dotcom bubble, which came to a crashing halt when people finally realized that websites like Webvan (look it up) weren't quite worth their billion dollar valuations. In other words, the last bull run was a big, fat, festering bubble inflated by hype and greed and "irrational exuberance," and it came to a messy end that wiped out many people's savings.
But that was so last century, right guys? It's different this time! . . . Right?
Well, I know you'll find this hard to believe but the US dinosaur media—yes, the same ones that feed the hype in every bubble and openly laugh at those who dare to speak economic truth—are assuring us that this time it is different.
Take CNN. (No, seriously, take them!) When the market officially broke the record earlier this week they commemorated the event with the article, "Market milestone: This is the longest bull run in history." It's a marvel of propaganda (and probably worthy of its very own installment of #PropagandaWatch), so go ahead and read it.
The first thing you'll notice is how they play up the post-Lehman "recovery," justifying the record-breaking streak by touting the "skyrocketing" valuations of companies like Netflix and Amazon. But if you read in between the lines of that blather, you'll notice how they blithely admit that the markets were helped along by "unprecedented aid from the Federal Reserve." You don't say. As readers of this column will already know, the Fed's flood of funny money in the years after the Lehman collapse was directly responsible for 93% of the market's rise from 2008-2016. 93%! But readers of the CNN article will be left with the impression that the Fed just played some minor role in the creation of this bubble . . . Sorry, I mean this "recovery."
And as if all that isn't enough, the CNN article then goes on to mention that, for some reason or other, those crazy investors and analysts never trusted this marvelous bull run. "No one believed in it all the way through," they quote David Kelly, chief global strategist at JPMorgan Funds, as saying. But apparently that's all to the good because "The pessimism that's been a hallmark of the bull market has actually ensured its longevity." Riiiiiight. It wasn't the trillions of dollars of central bank funny money that made this the longest bull run in history. It was . . . pessimism?
The article then proceeds to argue that although this has been a long bull run, it's definitely not a bubble, and there are no signs of it slowing down any time soon, barring an all-out trade war.
Well, that settles that, then, hey gang?
For a more realistic take on what all of this means, we can turn to Simon Black of SovereignMan.com. In his article on the subject, Black points out that the cyclically-adjusted price/earnings ratio (CAPE) is currently double its historical level. As Black puts it, that means that "investors are literally paying more than TWICE as much for every dollar of a company’s long-term average earnings than they have throughout all of US market history." And the only other time the CAPE ratio has been as high as it is today? 2000, of course. Right before the dotcom bubble burst.
Black also shines a light on an internal contradiction of the Russell 2000 index (the benchmark for small-cap companies' stocks in the US) which itself gives a window into the bubble-like nature of the current stock boom. The Russell 2000 is currently at an all-time high, but fully 60% of corporate debt issued by the 2000 companies listed on the index are rated as junk. As Black writes:
"How is that even possible– a junk debt rating coupled with an all-time high? It’s as if investors are saying, 'Well, there’s very little chance these companies will be able to pay their debts… but screw it, I’ll pay a record high price to buy the stock anyhow.' It just doesn’t make any sense."
How is this possible? It doesn't make any sense. But perhaps that's the point. As I pointed out in my most recent appearance on Financial Survival, we are living in a weird inverse economic reality where cause does not follow effect and nothing does make rational sense. It's a magical world created by the wizards of Wall Street, and, to the extent that we participate in their system by using their monopoly money and investing in their rigged markets, they will continue bending those markets to their will (which, I'm sure I don't need to point out, is very different from our will).
Everything has been distorted by the central bankers and their printing presses and, rather than fight the Fed, investors have learned to simply buy everything, all the time. Junk debt? Buy it. Negative yielding bonds? Buy them! FAANG stocks? Buy them!!! After all, it's worked for the last decade, right?
I mean, what could possibly go wrong?
Every time federal reserve bank would like to do contractionary policy, it will gonna be stopped by Trump
Yes we have... a few days ago. But... is any of it real and what is the true adjusted valuations?. Without the extraordinary measeures taken to reach this point. I didnt have time to write about it...maybe later.
good information .., I invest in cryptocurrency so in future BITCOIN approve ETF in long time bull run in BITCOIN ...., ) I Hope Thanks
What goes up must come down. I'll party when it crashes and everyone sweeps into crypto
Posted using Partiko Android
The market is a reflection of western craziness, where normal, hardworking people are depicted as deplorables (racists, islamophobes, mysogynists, Bible thumpers etc.) and the mentally ill are presented as role models for schoolchildren, welfare seekers with no job skills flood in and are welcomed as "undocumented immigrants" while well-educated, high-performing visa seekers are forced though bureaucratic hell for years. Interesting times!
IN GOD WE "TRUST" THE PLAN... It appears to be very nice, what's happening in the Markets, but have you given any thought about what's being used to Measure the Markets Value...???
Nice update
When will it all come crashing down is something I would love to know.
Well, why are "they" keeping this system up and running when we all see and know that it has failed? I think they either need more time to effect their nefarious plans or they know something is coming that will solve their problems... I talked to a scientist that says that the Yellowstone caldera will blow soon, that would create nuclear winter on the northern hemisphere for decades to come, problem solved. And he might be right, judging the earthquake activity in the last months. Or they will start WWIII and create a real nuclear winter. I mean the whole Russia bashing is part of that imo... The plans have been set back in that respect, so i guess we have about 4 to 5 years before that could happen. The US wants the NATO members to spend more on weapons, to be up to scratch in 2022. Either could be the reason for building D.U.M.B.s
and FEMA camps. It could be another reason of course, but I strongly get the feeling it is not about money or power anymore, but survival. Why else would they keep this system running for just a bit longer. I mean, the central banks (EVB, FED etc) bailed out the banks after their collossal fraud and kept the economy running with funny money, the 93% James has mentioned, now there is talk they will be bailing the central banks out via the BIS now. After that we would have to lend from the aliens I guess...
Awesome as ever @corbettreport! Keep up the good work James and team!
They’ve got to be burning 🔥through a GIGANTIC pile of printed money 💵 . Can’t wait to see how this one ends .
There remains no price discovery mechanism, therefore it is not a "market". The banks are insolvent carrying worthless toxic assets at face value (not marked to market) and same assets are planted in the foundation of gov't employee pension funds. Welcome to hell, personally I'm not invested in hell, I'm only here for the theater. By the way, I worked as a self employed series 7 licensed registered rep in New York State from 1995-2000. This game has been dead for decades, 1980 to be accurate. Not one dollar of growth in GDP since 1980 when analyzed by cutting out the deficit spending.
Question: "I mean, what could possibly go wrong?"
Answer: "The ozone layer was deliberately destroyed by over 70 years of geoengineering, and the globally implemented deficit spending, QE, and every other machination is of no cost because it's printed out of thin air and there was never any intention to pay any of the debt. The decision was made long ago to destroy the human population, their preference to pretend to initiate a nuclear war and then nations will nuke their own urban cities while blaming some one else. The "market" is simply nonsensical distraction. Everything you love will be taken away. The apocalypse has been implemented under compartmental security. In the mean time the sheep are free to shear their lives away. However no evidence exists that everlasting life is avoidable. It's never really over. The human life-form is over rated. Those who have lived in pursuit of infinite truth will have superior wisdom earned to make best decisions when they are released. The psychopaths will never win. Love each other and live harmonious."
Woodchuck Pirate
aka Raymond J Raupers Jr USA
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