1929 202? The trend is your friend. And then the trend is not your friend. Updated.
My main point: It is the sentiment, stupid
It is not about valuations. Buy the dip.
Soon Fed will lower interest rates by 0,25 percent, the exact date of which is debated 24/7 on media like CNBC and Bloomberg
The Roaring Twenties
“So long as the music is playing, you’ve got to keep dancing. We’re still dancing.”
Chuck Prince, former chairman and chief executive of Citigroup,
interviewed only a month before the music stopped 2007.
UK award Alan Greenspan an honorary knighthood
The honour, which was approved by the Queen,
is to recognise Mr Greenspan's "contribution to global economic stability"
BBC 7 August 2002
Charles P. Kindleberger’s “Manias, Panics and Crashes”
“There is nothing so disturbing to one’s well-being and judgment as to see a friend getting richer.”
Financial whizzkids who think they’ve come up with a new money spinner are often told to read their Kindleberger—another way of saying that there is nothing new under the sun.
Another infamous example was the South Sea Bubble in 1720.
Even Sir Isaac Newton averted his gaze from the stars for long enough to buy some shares and make a profit, then buy some more and lose a packet.
His comment? “I can calculate the motion of heavenly bodies, but not the madness of people.”
Every time a bubble appears it looks different, but there are common features. James Grant
The Economist
The current climate feels a lot like 1929
A. Gary Shilling
- I am convinced that the housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact, it's the key to the global economic outlook.
Det skrev Gary Shilling den 17 november 2006
U.S. stocks are demonstrating most of the characteristics of a bubble, but don’t sell yet,
says strategist Steve Goldstein May 26, 2021
Daniel Kahneman, winner of the 2002 Nobel Prize in economics
got his 15 days of fame.
In 1992, in the Journal of Risk and Uncertainty, Kahneman and Tversky gave a revised account of prospect theory that they called cumulative prospect theory.
Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory.
The study of behavioral economics includes how market decisions are made and the mechanisms that drive public opinion.
It feels good at the top of the spike, always feels terrific. And people always torture the logic to think, like in 1929, that it’s a “new high plateau.”
We have totally full employment, totally wonderful profit margins. All the things you would not want to start a bull market from. This is where you start bear markets from.
Great bull markets start with exactly the opposite. But it always feels wonderful. Peak profit margins, getting there takes years, and it feels nice.
And so you’ve got a great track record. You can’t get to peak margins without leaving a terrific track record. You’ve got the peak P/E, so you feel wonderful, the stock market has gone up and up and up and up.
So everyone feels great, and that’s how you get to a market peak. You feel great about everything. Of course, almost by definition.
When do you start going down? You still feel great. You just don’t feel quite as great as you felt the day before.
John P. Hussman, Ph.D. May 2024
One of Jamie Dimon’s daughters called him up from school with a question more than a decade ago: “Dad, what’s a financial crisis?”
The billionaire who runs JPMorgan Chase & Co. tried to put her at ease.
“It’s the type of thing that happens every five to seven years,” he told her, he later testified to the Financial Crisis Inquiry Commission.
CNN Fear & Greed Index
https://edition.cnn.com/markets/fear-and-greed
US Bond Yields
https://englundmacro.blogspot.com/2024/04/us-bond-yields.html
About me
https://englundmacro.blogspot.com/2021/11/what-have-i-done-caveat-emptor.html
My website
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