"This Is The Broadest Episode Of Extreme Equity Market Overvaluation In History"

"This Is The Broadest Episode Of Extreme Equity Market Overvaluation In History" - Zerohedge

Indeed, with median valuations on these measures now more than 2.7 times their historical norms, there is strong reason to expect a market loss on the order of -63% over the completion of the current market cycle; a decline that would not even bring valuations below their historical norms (which we’ve typically seen by the completion of nearly every market cycle outside of the 2002 low).

"...unlike the 2000 valuation extreme, which was largely focused on a subset of extremely overvalued technology stocks, the current market extreme is the broadest episode of extreme equity market overvaluation in history. The chart below shows the median price/revenue ratio of S&P 500 component stocks, which set yet another record high in the week ended November 3, 2017, and now stands more than 50% above the 2000 extreme."

Source: "This Is The Broadest Episode Of Extreme Equity Market Overvaluation In History"

Comments

How The Economic Machine Works by Ray Dalio - Bridgewater

Source: How The Economic Machine Works by Ray Dalio

Letter: Why the geopolitics of international currency choice matters - FT

This coincidence must alert readers that a tempest is brewing on subjects noted: lurking inflation, increasing debt, suppressed interest rates and the shifting of hegemonic power. There are only two important questions in investing that also apply to subjects impacting the future stability of the world — tell me why and tell me when. Plender gives us the “why”, the ever-increasing “intolerable burden” of government debt and suppressed rates leveraging the global financial system. He gives us the tipping point. What we await is “the when”, as in when do we know we have “tipped”. Paul Hackett Madison, NJ, US Letter: Why the geopolitics of international currency choice matters

Reading the runes on a Warsh Fed - Martin Wolf - Financial Times

Intellectually, at least, today’s Warsh appears the same as the one of 2010. In his IMF lecture delivered in April 2025, he stressed not only the Fed’s “institutional drift”, but also its recent “failure to satisfy an essential part of its statutory remit, price stability. It has also contributed to an explosion of federal spending. And the Fed’s outsized role and underperformance have weakened the important and worthy case for monetary policy independence.” He made other criticisms, the most pointed being that “the Fed has been the most important buyer of US Treasury debt — and other liabilities backed by the US government — since 2008”. He asserts: “Fiscal dominance — where the nation’s debts constrain monetary policymakers — was long thought by economists to be a possible end-state. My view is that monetary dominance — where the central bank becomes the ultimate arbiter of fiscal policy — is the clearer and more present danger.” For Warsh, then, easy money is the road to ruin. ...

Luca Bindi, LL.M.

Search This Blog