http://www.businessinsider.com/bofa-wer ... =moneygame
Looks like a bubble may be forming...
Jeff
Extreme investor bullishness
The article might be more informative if the Standard Deviation of bullishness was plotted on a chart which could be compared back with bullish levels leading up-to the months of sub-prime crisis & tech bubble. That might help provide a more decisive reference point to theorize if a bubble may be forming or not.
As another indicator I usually keep an eye out if Nassim Taleb (following him on twitter) has anything to say about extreme levels of Standard Deviations. Recently he hasn't mentioned any such statistical inferences.
I can't recall where I read this but someone suggested that "markets are predictable in a un-predictable way" - that is, irrationality in human behavior tends to repeat itself in very predictable ways, but consequences are often beyond comprehension.
Looking at the attached S&P 500 chart it is close to 1500, about the same high's as pre sub-prime and tech-bubble months. Maybe that is suggestive of future expectations if previous patterns are anything to go by?? It is at a key level nonetheless.
As another indicator I usually keep an eye out if Nassim Taleb (following him on twitter) has anything to say about extreme levels of Standard Deviations. Recently he hasn't mentioned any such statistical inferences.
I can't recall where I read this but someone suggested that "markets are predictable in a un-predictable way" - that is, irrationality in human behavior tends to repeat itself in very predictable ways, but consequences are often beyond comprehension.
Looking at the attached S&P 500 chart it is close to 1500, about the same high's as pre sub-prime and tech-bubble months. Maybe that is suggestive of future expectations if previous patterns are anything to go by?? It is at a key level nonetheless.
You do not have the required permissions to view the files attached to this post.
All the markets are bullish despite the fact that the underlying factors are not there to justify this bullishness. Unemployment is rife in the most major economies, the growth rate is steadying in the emerging market where they should be surging to double digit to support the population growth. The commodities market seem to undecided given the demand and supply equation. The property market in most countries is at pre-2008 crash level if not ahead despite risen inflation and deflated pay increase.
There are no major breakthrough in medicine or technology to the extent that we saw in the late 20th century and if you if you think smartphones and ipads are genuine invention then you're mistaken as they are just another form of invention to entertain rather than increase productivity or yield.
The old money is looking for places to invest and creating the bubble again. The agency problem is worsening with each passing year as corporate profit don't necessarily reflect rewards. This coupled with with traders looking for their usual annual bonus is certainly contributing to a mix dilusional optimism that will certainly would cause the shift in near future. I'm not sure when another crash will happen as we're becoming better at masking things but it will happen.
There are no major breakthrough in medicine or technology to the extent that we saw in the late 20th century and if you if you think smartphones and ipads are genuine invention then you're mistaken as they are just another form of invention to entertain rather than increase productivity or yield.
The old money is looking for places to invest and creating the bubble again. The agency problem is worsening with each passing year as corporate profit don't necessarily reflect rewards. This coupled with with traders looking for their usual annual bonus is certainly contributing to a mix dilusional optimism that will certainly would cause the shift in near future. I'm not sure when another crash will happen as we're becoming better at masking things but it will happen.
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superfrank
- Posts: 2762
- Joined: Fri Aug 14, 2009 8:28 pm
certainly agree with that comment!Photon wrote:we're becoming better at masking things
the above comment is from an article Euler posted here viewtopic.php?f=35&t=2807&start=750#p58089“Anyone who does not understand that the price of every stock and every bond is being artificially altered by the fact that interest rates are being manipulated by the Federal Reserve should not be risking any money in the markets.”
Michael Lewitt, The Credit Strategist
markets are more manipulated than any a/w horse race now and no sensible person would go short atm with central banks ranged against them. FED money is pumping the markets almost on a daily basis via POMO days (viewtopic.php?f=35&t=7358).
the macro picture is not getting any better and yet stocks make new highs every other day. it's all a dream for rich investors, but the future cannot be milked forever. i suspect they'll be a big (arranged) correction at some point to hoover up the muppet money (retail investors). 'happens every time.