Journalists loved to zero in on their readers' emotion •2021 Seeking alpha Technically Speaking: Blowing Up The Everything Bubble | Seeking Alpha https://seekingalpha.com/article/4408272-technically-speaking-blowing-up-the-everything-bubble •2020 from TheHill The Federal Reserve's everything bubble | TheHill https://thehill.com/opinion/finance/498573-the-federal-reserves-everything-bubble •2019 Why Warning About A Bubble For A Decade Is Completely Rational - RIA (realinvestmentadvice.com) https://realinvestmentadvice.com/why-warning-about-a-bubble-for-a-decade-is-completely-rational/ 2019 Is the Everything Bubble Ripe Yet? | Wolf Street •2018 Disaster Is Inevitable When America's Stock Market Bubble Bursts (forbes.com) https://www.forbes.com/sites/jessec...s-stock-market-bubble-bursts/?sh=4eb97aab1b82 2017 The Everything Bubble - The 10th Man - Mauldin Economics 2016 Today's Markets and the Everything Bubble — Harvest Returns 2015 Welcome To The Everything Bubble – The Felder Report and vanity fair 2014 Welcome to the Everything Boom, or maybe the Everything Bubble (cnbc.com) 2013 It’s not just stocks; everything is overvalued - MarketWatch "Well, there is a bubble in a bunch of asset classes simultaneously, like: Real estate in Canada, Australia, and Sweden Real estate in California Cryptocurrencies FANG, plus Tesla and a few others Corporate credit EM sovereign credit Autos Indexing Dramatic television series Sports Animated movies The same old story from Marketwatch Rex Nutting It’s not just stocks; everything is overvalued Published: May 10, 2013 at 7:00 a.m. ET By Rex Nutting 101 Commentary: Bull markets can persist a long time, but not forever WASHINGTON (MarketWatch) — Stock markets are hitting new highs almost every day, leading to some tense debates about how much higher stock values can go. Of course, anyone who’s been watching the markets over the past 15 years knows that stock markets can get extremely overvalued and stay that way for a long time. And they can get undervalued, too. Profits are very high, but so are stock prices. The price/earnings ratio is at levels previously seen only right before a crash. MARKETWATCH In the short run, equities are worth what people will pay for them, and that depends as much on psychology as it does on fundamental economic values. In the short run, investors can rely on expected capital gains to justify almost any price; all you need to do is find someone willing to pay more than you did. But over longer periods, stocks can’t be worth much more than can be justified by their underlying economic returns. Unfortunately for market timers, the long run can be very long way away. Like 20 or 30 years. The fundamental bullish argument for equities goes something like this: All the stars are aligned for a bull market. Interest rates are very low and are likely to stay low for a while, which means corporations’ cost of capital is low. The economic recovery is bound to strengthen, which means sales and profits should rise. NOW PLAYING: AstraZeneca's Vaccine Is Deemed Safe by Europe. Will People Want It? 00:0103:39 Visit our Video Center The psychological case is also bullish. Investors are desperate for higher returns than they can get from safe, boring bonds that pay almost nothing. For most investors, that means buying equities. Recently, researchers at the New York Fed concluded that equities will likely produce high returns for the next five years, in large part because bond yields are so low. There are lots of bulls out there, telling the same story: Don’t fight the Fed. If Ben Bernanke and Mario Draghi are willing to keep pumping billions into the market, you’d be a fool to go against them. How Much Is the Market Really Worth? YOU MAY ALSO LIKE UP NEXT 0:00 / 4:53 0:00 How Much Is the Market Really Worth? The bullish case is a strong one. But it doesn’t mean that equities aren’t overvalued, perhaps massively so. The same may be true for all asset classes, argues David Levy, chairman of the Jerome Levy Forecasting Center. Investing in Crypto | Wed 1PM ET, Apr 7-14 MarketWatch and Barron's editors will convene top experts to discuss the landscape of digital currencies, how to invest, and where the market is headed. Hear the latest in the nascent sector and the best strategies for prospective digital-currency buyers. Join the discussions and ask questions. REGISTER NOW “From surging bank stock prices to rising Manhattan coop values, all present bull markets are zero-interest-rate bull markets,” Levy wrote recently. These bull markets are occurring in an environment of high private-sector debts and limited growth potential, and therefore are “intrinsically speculative, limited in their potential, fragile and ultimately capable of severe declines.” Levy is an unusual economist, because his model of the economy explicitly includes financial flows, unlike mainstream models that focus more on production and consumption but essentially ignore finance, profits, assets and debt. His model owes a lot to his grandfather, Jerome Levy, as well as to Hyman Minsky and Michal Kalecki. Good company. Levy’s approach focuses the mind on the imbalances that can grow almost imperceptibly until, suddenly, they’re destroying the economy. So why does Levy think assets are overvalued? Because prices are very high compared with the underlying income stream. Investors want a return, and that return is determined, in the long run, by the income that an asset generates (in the case of financial assets) , or by the economic value it produces (in the case of land or other tangible assets). For the stock market, one popular valuation is the Shiller cyclically adjusted P/E ratio for the S&P 500 SPX, -0.06%, which is now 23.2, vs. the pre-bubble average of about 15. It’s been higher on only three occasions in the past 93 years: Just before the 1929 crash, just before the 2000 crash, and just before the 2008 crash. Also read: What the Shiller P/E says about market’s top. (If anything, the Shiller ratio understates the overvaluation, because corporations are carrying much more debt today than they used to, and that debt must be serviced before any earnings can flow to the shareholders. And remember, profit levels have never been higher.) Real house prices, too, are still at historically high levels. Total assets in the economy are priced very high compared with the income they generate. MARKETWATCH There is no economy-wide measure of price-to-earnings values for all assets, but Levy’s colleague, Sri Thiruvadanthai, suggests a useful rough proxy: Household assets as a ratio of gross domestic product. Asset values are currently just over 5 times GDP, an extremely high measure, exceeded only in the bubble years of the late 1990s and 2000s. The average from the 1950s to 1980 was just 3.7 times GDP. The ratio briefly topped 4 on just one occasion (in 1961) between 1951 and 1986, a period of relatively high economic growth and relatively equal distribution of income and wealth. The asset-to-GDP ratio began climbing steadily in 1985, just as the hyper-financialization of the economy really got underway. It was 4.4 when Alan Greenspan delivered his famous irrational exuberance speech in 1996. It all seems so quaint now. Levy and Thiruvadanthai’s conclusion is that the prices of assets are too high to be justified by the underlying income stream. Because assets are overvalued, business owners are preoccupied with managing market expectations in hopes of boosting short-term gains, rather than managing their business for the long term. Such short-term thinking is one reason why private-sector debts have exploded over the past 30 years. In the 25 years between 1982 and 2007, the private sector (excluding banks) added $23.7 trillion to its debt level, while the federal government added $4.1 trillion. For all the recent talk of an unsustainable public debt, it’s the private sector that’s in real trouble. The private sector has had to leverage up massively in order to afford the high prices it’s paying for houses, equities and other assets. What’s the result of all this financialization? Debts are too high compared with underlying economic fundamentals, but so are asset prices. No one’s sure when the reckoning will take place, but it’s likely to be ugly when it does.
ok, your kid might buy the argument. the indexes show the journalists have been wrong every flipping year
I don't have kids. And I said they were right but early. If they openly declared that that specific year the "Everything Bubble" would indefinitely pop then their timing was obviously off. Who gives a shit honestly. So the Fed has proven they can kick the can a hell of a lot farther than expected? Doesn't change the end game. When it blows it will be blatantly obvious because they wont be able to do jack shit anymore to stave it off.
Well i dont know about previous years. But we definitely went full on bubble mode recently. I mean the likes of TESLA going from 50 to almost 900 in just over a year. Not just Tesla many other stocks making similar moves. If thats not a Bubble i dont know what is. It looks like we have topped for now, even if we don't crash 50% from here, which could easily happen. The next 5 to 10 years are going to see lousy returns from the stock market.
US is an a very lucky geographic position because unlike Japan of the 90s, USA asset price inflation is supported by growing population and access to cheap labor. What other developed countries in the world share a border with a developing nation like Mexico? This is why I don't think USA is in danger of a top that will never be seen again for decades like the Nikkei
The S&P was stuck in a trading range for 16 year trading between 1997 and 2013. Trading up and down Between 750 and 1550. That kind of range bound action could happen again over the next 10 years, we could be stuck between 2300 and 5000, starting from 2017 when the S&P first hit 2300, and ending who knows when
I mean investing at the high peak now only for it to not be seen again for decades like Japan. For S&P500, the 750 in 1997 became the floor. Or 1500 peak in 2000, not seen again until 2007, only to drop again and not surpassed until 2013, or a 13 year holding period to breakeven. But unlike the previous 2000s and 2010s, 2020 is where the Fed truly is in the drivers seat. Even if there is a decade long pullback, I really don't think the US is at risk of Nikkei like performance. Regardless of how long it takes, 10, 15 years, I think US markets will continue making new highs eventually because of the unique position of bordering a developing nation, which no other developed nation has.
You can't fight an outfit like the FOMC, they have an unlimited supply of federal reserve notes. Until those notes become worthless, they are in charge.
as you know, Japan isn't USA (didn't want to discredit Japanese people who brought us karaoke ). there're number of reasons why Uncle Buffett said never sell America short. ____________________________________________________________/ market story in 2013 is still relevant in today's market "Where to put your money when bond yields rise" Published: June 7, 2013 at 5:30 a.m. ET By Jonathan Burton 173 Commentary: The best defense is a good stock-driven offense SAN FRANCISCO (MarketWatch) — The investing paradigms, they are a-changin’ — and it’s time to get your stock portfolio in synch. Bond yields have been rising as the U.S. economy improves, and so has market volatility. The defensive, income-rich stock and bond strategies that have rewarded investors for years won’t lead the markets when the economy is less distressed. In such an unfamiliar situation, what sort of stocks do you add to your portfolio, and what do you trim? First, it helps to understand where we are. U.S. stocks in coming months will tell a tale of the taper. Investors are concerned that the Federal Reserve will unwind its quantitative easing program — the massive bond purchases that have suppressed yields and succored stock buyers. The mere thought of “QE-lite,” floated in several Fed-launched trial balloons, has sent investors into withdrawal. Buyers have shown displeasure by punishing Treasurys, dividend-paying stocks and other interest-rate sensitive assets. The spike in the 10-year Treasury US:10_YEAR yield is alarming but shouldn’t be surprising. Investors know the day will come when the economy will have recovered enough for the Fed to normalize its policies. Yields in that environment will go higher and bond prices will drop, which will be more than a bit disturbing for income-focused investors. The reckoning isn’t here yet, but bond funds’ losses and dividend-stock funds’ underperformance in May offered a grim glimpse of what could be. The largest bond fund, Bill Gross’s Pimco Total Return PTTAX, , shed 2.2% in May — its worst month since 2008. Income-seeking investors in particular should get cozy with the yield curve — a measure of the relationship between short-term interest rates, over which the Fed has leverage, and long-term rates — which the Fed can influence but, importantly, does not control. Read “Bond volatility’s grim message for the market.” Some confusion can be forgiven. The slow-growth economy suggests that short-term yields could be low for the foreseeable future. Meanwhile, long rates have been ranging higher in anticipation that economic health could be better than expected. The crucial part to know is that low short-term rates coupled with rising long-term rates creates what’s called a “steep” yield curve. And a steepening curve is toxic for rate-sensitive longer-term bonds and bond proxies including high-yielding utilities and telecommunications stocks, real estate investment trusts and master limited partnerships — lately the all-star team for many investors and investment advisers. Investing in Crypto | Wed 1PM ET, Apr 7-14 MarketWatch and Barron's editors will convene top experts to discuss the landscape of digital currencies, how to invest, and where the market is headed. Hear the latest in the nascent sector and the best strategies for prospective digital-currency buyers. Join the discussions and ask questions. REGISTER NOW “Assets that had been the biggest beneficiaries of this environment of ultra-low rates are likely to come under some pressure,” says Russ Koesterich, chief investment strategist at BlackRock Inc. “People need to become more selective.” Investments to consider Keep in mind that the Fed is trying to facilitate a gradual change that supports both stock and bond markets — there’s a big difference between less accommodation and more restriction. That buys you time to make careful portfolio changes. And to be sure, this recent rate rise could peter out should the U.S. economy falter or when investor anxiety settles down. Analysts at Credit Suisse say fears of a tapering are overblown. No less of a seer than Jeffrey Gundlach of the respected DoubleLine mutual fund family says he expects the 10-year Treasury to slip below 2% by year-end, and famed Pimco manager Bill Gross confides that he’s sticking with bonds as long as the Fed does. But the buck stops with the Fed. True, central bankers often veer too far to one side or the other, but their goal now is to wean investors from QE. What does that look like? Good question. How might the Fed’s actions impact the stock market? “The rise in bond yields is not the end for stocks,” market researcher Birinyi Associates headlined in a recent commentary. The firm analyzed nine periods of rising rates since 1962, and found that the beginning of those cycles didn’t necessarily coincide with a peak in stock prices, as shown in the table below: The S&P 500 gained 7.5% on average in the six months after rates started to climb, Birinyi analysts found, while technology stocks averaged a 15.2% gain, industrials were up 11.5% and materials rose 10.3%. Utilities and telecom lagged. That’s in keeping with results from Ned Davis Research. “Behind the rise in real rates are expectations for lower inflation, and the tapering of the Fed’s asset purchases as a result of improving real economic growth,” the firm’s analysts wrote in a recent client report. “Such leadership would likely favor consumer sectors over commodity sectors, as the economy improves and credit expands.” Accordingly, look closely at economically sensitive sectors including technology, industrials, materials, consumer discretionary (case in point: GM’s return to the S&P 500) and energy. These cyclical sectors, which respond to a more robust consumer and business climate, were the standouts of the Standard & Poor’s 500-stock index SPX, -0.06% in May and are poised to pace the next leg of the bull market. David Rosenberg, chief economist and strategist at Toronto-based investment manager Gluskin Sheff + Associates, studied periods of steepening yield curves over three decades, “with the Fed anchoring the front end of the curve and Mr. Market orchestrating the action at the back end.” Rosenberg found that S&P 500 sector-performance results were in line with the Ned Davis and Birinyi research, and he reported bullish behavior from financials, chiefly insurance companies, and commodities. In addition, the smaller-stock oriented Russell 2000 Index RUT, +0.88% trailed the S&P 500 by three percentage points, Rosenberg noted. The steep yield curve typically comes with higher inflation, and large-cap stocks in particular hold up better in that scenario. And not incidentally, the market’s volatility gauge, known as the VIX index VIX, -2.92%, rose in tandem with interest rates. “We are in the very mature stages” of a 30-plus-year bull run for bonds, Rosenberg says. “I don’t plan on overstaying my welcome.” and the FED hasn't planted the idea of raising rate yet. fear of the known unknown I guess