Posted on 08/08/2016 4:35:18 AM PDT by blam
Submitted by Nick Colas of Convergex
Many of the smartest investors out there hate stocks. Since May, we’ve heard negative equity calls from Stan Druckenmiller, George Soros, Carl Icahn, Jeff Gundlach and Bill Gross. Wall Street lore says “Never argue about markets with a guy who is much richer than you”. So we’ll take the discussion in a different direction: what do they know?
Successful investors are always more plugged in than the market as a whole – hence their success. And while we can only guess at the lynchpins of their negative take on stocks, we do have some idea of how significant they must be. For example, in 2016 the S&P 500 is up 5.9% on a price basis after 1) the Brexit “Leave” vote, 2) dramatically disappointing Q1 and Q2 U.S. GDP, 3) a correction of 20% in oil prices, 4) a Fed that has incorrectly calibrated its public stance on monetary policy, 5) Donald Trump as the Republican candidate for president, and 6) the U.S. 10 Year Treasury at near record low yields.
None of that has been enough to spook U.S. equity markets. So whatever the big boys think they know, it must be really bad. But what is it, and why is it so hidden from view?
* * *
“Someone is getting this information before you.” If you’ve ever worked at a hedge fund, you know this is the worst thing you can hear. It means you are behind the curve, providing yesterday’s news into an investment process meant to predict the future. “Titanic sinks!” or “man lands on the moon!” are the more playful retorts you’ll get from co-workers. But it all means the same thing: up your game, or get a white box from the mail room.
(snip)
(Excerpt) Read more at zerohedge.com ...
Um... why would that be a negative? Wouldn't the fact that Hillary might win be a huge negative? She openly states that she is planning to destroy the economy, I would think that would cause massive unease in the stock market.
Not difficult. The globalists at the Fed have been propping up Zero from Day One. Trump they will trash and blame him.
Used to be you were a nut to believe something “was going on”. Now you are a fool if you don’t.
Trump winning would put in motion major tax and import changes, which would cause a shuffling of investments.
What we are about to witness is the bursting of a bubble.
The greater part of the shock will be absorbed by those least able to withstand the expanding catastrophe - the widows, the orphans, and the small-time investor who was only in the market to “protect” retirement funds. They had all been seduced into investing in “safe” vehicles, and are about to be rudely awakened. Then, suddenly, the reality of the effect of printing billions of dollars by the Fed, as a part of the attempt to “support” the markets, will flood back and swamp the rest of the economy, putting us in a new wave of “stagflation” as known under the latter part of the Carter Administration. Interest rates shot sky-high, sellers forced into severe discounts, buyers reluctant to incur debt, and the velocity of money ground down to near-zero.
I posted this article 19 days ago:
They just want to buy everything up.
I agree with the gist of the article, but it’s sad when a whole article is written when it can be summarized by one sentence.
As Free Republic’s resident Zero Hedge skeptic, I must point out that although ZH is an interesting site, it is always predicting a market crash. It’s just what they do.
So obviously, while Druckenmiller, Soros, Gundlach, et al think the market is going to plummet, many other very smart investors disagree.
ZH focuses on FUNDAMENTALS and points out there is NO RATIONALE for the market multiples based on EARNINGS.
Many “pundits” point this out and the QE money printing has produced a BUBBLE in commercial real estate, auto loans and student loans.... TRILLIONS OF DOLLARS..
As for the stock market, cheap money and STOCK BUYBACKS distort the PRICES...
Here is something to ponder...
People in the market have hit a bonanza for the last 7+ years..
People with savings are suffering.
Corporations have cut way back on capital investments.
State and local pensions are not able to get the return they need (8%/year) to properly fund RETIREMENT PENSIONS.
The unemployment rate is not counting the 94 million who are out of the work force which is UNEMPLOYED in my book...at 25% real rate.
The government publishes deliberately false economic numbers and then revises DOWN later.
WHEN THE FED RAISES INTEREST RATES THE MARKET WILL DROP
WHEN THE MARKET DROPS IT WILL NOT BE BECAUSE JOE SIXPACK IS SELLING
THE INSTITUTIONS CAN DROP THE MARKET LIKE OFF THE SIDE OF A CLIFF WHEN THEY SELL
So “pundits” are saying the UPSIDE MARKET POTENTIAL IS FAR LESS THAN THE DOWNSIDE RISK especially for those sho cannot afford to lose what they have in the market or cant wait or dont wish to wait for the eventual recovery....
NO ONE KNOWS WHERE THE MARKET IS GOING
BUT EVERYONE REALIZES THAT WE ARE WITNESSING AN ARTIFICIAL BOOM DUE TO QE AND THE FED IS ANXIOUS TO RAISE RATES BUT CANT.... AND ‘PUNDITS” SAY CANT BEFORE THE ELECTION... but after is another story...
Insurers offering annuities just got huge losses ($3 billion by MET life) and they want out of the business. They cant find the yield in investment grade securities to pay the annuities. XOM will not be able to sustain its dividend according to some observers and OIL has been leading the market as a refleciton of economic activity on a global scale.
The way politicians solve this scenario is WAR... is it affordable with 22 trillion in debt? Can it be financed with low interest rates... can taxes be raised.???
Go to youtube and search Bill Bonner.
Cash is king, when we go into our brief deflationary spiral, followed by hyper-inflation.
Those rich guys definitely don’t use the LSM for their investment research. Regular guys do.
The explanation the talking heads gave on Fox Business was she represents certainty (which markets like) and Trump is a big unknown. So they prefer a central planning communist to a successful businessman. It was so preposterous!
I used to think the same thing. Bill Clinton, Obama, they should cause the market to tank right? NOPE.
The reality is the market is tied to big government not to the success of the economy.
Actually, Donald Trump stays pretty much out of the stock market himself. He sticks to real estate, lol. I wonder why.
The Obama gravy train will end soon. If Hillary wins, and I think she will due to fraud and the EC installing her, the gravy train will continue with less returns because the bill is quickly coming due. The tax payers will bail every investor out as usual. If Trump wins the gravy train engineer will slam on the brakes and crash world economies just to say “YOU SEE!!! Elect a republican capitalist and this is what happens.”
LOL, I’ve noticed that too. Every Sept. for the last several years especially, things are going to crash.
All I know is my stock looks like a yo-yo at times and there is no reason for it other then stock manipulation.
#9 and remember to buy GOLD! and get Lifelock!
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