Posted on 12/26/2013 10:51:22 AM PST by Signalman
The stock market's torrid rally has left it vastly overvalued and vulnerable to a horrific plunge, says Henry Blodget, editor-in-chief of Business Insider.
"Every valid valuation measure I look at suggests that stocks are at least 40 percent overvalued," he writes on the service.
Among examples Blodget cites is that the cyclically adjusted price-earnings ratio, based on 10 years of profits, stands at 25, compared with a long-term average of 15.
In addition, the current ratio of stock market capitalization to revenue is 1.6, compared with a long-term average of 1.0, he notes.
And the ratio of stock market capitalization to GDP is twice the pre-1990s average, Blodget adds.
(Excerpt) Read more at moneynews.com ...
Or does it reflect the loss of the dollar value?
as long as the current regime continues to print fake dineros out of thin air, em masse, and pump them into the stock market.... there will be upwards price pressure on stocks
It’s almost entirely because of the trillions of dollars Bernanke has conjured out of thin air and injected into the banking/investment complex. It’s simply “reinflating the bubble.”
If there’s a huge crash next year the democrats will scream how the rich people on Wall Street didn’t get hurt but actually made more money. They’ll also remind them that when they got laid off and lost their health insurance, it’s the democrats who are trying to make sure everyone is covered. And the democrats will stay in power.
Is a stock market crash part of their plan? I don’t trust anyone.
Government QE money in MBSs
In a way, it does.
My thinking has it that a large chunk of US Dollar printing press products is being used to buy stocks involved in index lists such as the Dow Jones Average. That's makes markets look good and creates the impression that "all is well."
In actuality, common sense tells me that the US economy is going to hell.
Be prepared. A market crash is coming.
When a loaf of bread costs $3, even a dunce can tell our dollar is only worth about $.35 cents in 1970s money. The Fed has devalued our currency to the point where people can’t buy food if it’s not subsidized by the government.
Look at Twitter. $72+ a share and $40 billion value but has never made any profit and only millions in sales.
They committed stock fraud with claims of hundreds of millions of users. Caught using fake accounts. Just like Facebook which claims 900 million users. This is another scam for Wall street and the democrat party using kickbacks trading behind the scenes for themselves and soon to pull the rug out for those that climb on.
Remember the 1920’s with the stock market collapse.
I guess Blodgett is sitting in for Durden and Fleckenstein? Or are they both broke from their shorts?
They are using the markets as a reservoir for their fake money to keep it out of circulation and thereby try to keep inflation down. When the markets crash, the fake money goes “poof” as though it never existed. That’s what I think they actually want to have happen. As long as they can keep blowing bubbles, they can keep running trillion dollar deficits.
Precisely. But it has a political purpose. Democrats plan to ride a "record high year for the stock market" into the 2014 elections. When the market crashes later you can bet they'll blame "greedy Republicans" and the MSM will be happy to propagandize it, as usual. Liberal political success depends on low information voters.
you may be right.
but they keep inflation “down” by destroying more and more American jobs (lowering demand for goods and services), and they keep inflation down by faking the numbers (not counting several of the largest component costs of living in their reported inflation rate figures, etc.).
just to quibble a bit is all.
you could still be substantially correct
(I think the trick is to figure out or discover just how they siphon off their “take” ? THAT part will continue to be protected, methinks....as long as they are in power)
merry Christmas!
The markets always go UP when bigears is out of the sight.
That's why I've been sitting on the sidelines, think there aren't any good values and overpriced.
Today it is good employment numbers. I don't think pre-Christmas sales were good.
Well, I don't want to wish it to crash and see ordinary investors get hurt. I thought it would correct before now and it hasn't.
I think these are shaky times though. It can't go on like this too much longer.
Which means they will go up another 60%.
And they could go to 100+% overvalued
don’t fight the FED!
"Throw more money into Wall Street, bonds, and 401Ks! It's the only way!!! Hurry!!!!!!!"
Something about all of this makes me very, very nervous.
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