As long as there is a “Progressive” in the White House, the MSM will sing the Lego Song...Everything is awesome. Everything is cool.... (See! no need to panic!! As long as there is no one to report anything bad, Happy Days are Here!)
I’ll never forget the Clinton Campaign slogan, “It’s the Economy, Stupid!”. They made hay when GHWB gdp hit 1.4% early 1992, only to be revised up by the Govt Bureaucrats to 4% long after the election.
That is not exactly news shattering. Everyone knows there is a bubble. The only thing that surprises me, is that Cramer knows it.
He solved the problem in 1991
We;ve had almost 7 years of near ZERO interest rates.
this is NOT a free market. Our monetary system, led by the Federal Reserve, is as centrally planned as the former Soviet wheat harvest or shoe production - with similarly perverse results.
price escalations result from excess of demand over supply
we informally call them bubbles when the excess demand is from an unusual source and/or obviously temporary
Manhattan (and Los Angeles and San Francisco and Vancouver, BC) real estate ... big bubbles...largely due to foreign money coming into those markets in substantial sums
stock market — bubble in the sense of all the so-called “stimulus money” (aka: “Printing Press Gone Wild”) ... there’s almost no other workable place for the trillions of “newly printed dineros” to go BUT the stock market, so that’s where most of it winds up
in all of the above cases, it is not difficult to imagine the “excess demand” drying up, and possibly quite suddenly (the Communist Chinese government decides to reimpose effective capital export controls, possible USA political backlash/limitations on foreigners buying up American homes, possible tapering or ending of the Printing Presses or at least the “performance hormones” they’re being fed...whatever, any of these things .... and more...are clearly possible...)
What can we learn from this? TO either avoid investing in ‘hyper-inflated markets’ that are dependent on sources of ‘excess demand’ that could be eliminated or choked off by relatively simple decisions in foreseeable ways....
or, put ‘high risk capital’ (the money you can afford to lose anyway) into such hyper-inflated markets AND BE READY TO PULL YOUR MONEY OUT BEFORE (IF YOU CAN TIME IT?!) THE MARKET BUBBLE BURSTS. This is, of course, easier to do in the stock market than in real estate (what with realty’s longer transaction times)
remembering the old adage,
“bears make money, bulls make money, but pigs get turned into sausage”
Bear Stearns is fine!
Is Trump going to be making casual statements about the market when he’s President too? I guess he’ll be filling out NCAA brackets like obama and commenting on arrests that aren’t just in his view, also.