Momentum, FOMO, Dipbuyers och Money, Money, Money
The stock market is a timebomb waiting to go off
The period from 1966 to 1982 was more crash-prone.
The next 18 years weren’t.
There is no doubt that this is the dumbest market in history,
because at this point it is completely dominated by “passive” index investing — the very definition of dumb money, because indexers buy stocks without any regard to valuation. Index funds chase the crowd, but increasingly index funds are the crowd — which is both dumb and crazy.
“Once a bull market gets under way, and once you reach the point where everybody has made money, no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks.
This helps to explain how the stock market has become even more overvalued than it already was earlier this year. In fact, almost without exception, valuation indicators with good long-term records are more valued today than at almost every other time in U.S. history.
A bubble is hard to identify before it bursts, but bubblelike behavior isn’t. In the late 1990s and again during the mid 2000s as housing took off, the Fed raised rates. Today the Fed is doing the opposite. Inflation is above its 2% target, yet it cut rates last month and is on course to do so again.
Bank regulators plan to relax capital requirements.
Today, working-class investors are flocking to all these markets: stocks, betting and crypto. They are beneficiaries of a new age of democratic finance. Or the last invitees to a party that’s going to end.
Greg Ip
Huge Rally, Then 1929-Style Crash
Crash of 1929 - It was FOMO plus debt. It’s almost always FOMO plus debt
The bust in stock markets 1929 was transmitted to commodities and trade through a collapse in credit and waves of bank failures as people everywhere rushed to get hold of gold, dollars and British pounds.
What turned all this into a full-blown global depression was the collapse of a small bank in Vienna in 1931 Creditanstalt, the 1931 equivalent of Lehman Brothers.
1929 and all that
A “Minsky moment,” named after economist Hyman Minsky, refers to a sudden market collapse following an unsustainable bull run, which in this case could be fueled by the “easy credit” environment created as a result of unprecedented fiscal and monetary stimulus measures.
When the time comes to ask the question – “What triggered the crash?” – remember that this is the least important question.
Undoubtedly, some “catalyst” will be found, but the mistake will be in believing that the collapse is caused by that piece of “bad” news.
The important question to ask is “What drove the bubble?”
John P. Hussman
Bubbles don’t collapse under their own weight
They end when some event leaves people with less money to speculate and invest.
Ruchir Sharma
- Market bubbles only burst when central banks tighten — and there’s no sign of that happening
Det fördes länge en debatt om vilket penningmängdsmått - M123 - som skulle vara bäst för att förutse framtiden. Själv har jag tänkt mig att hushåll och företag har en skattkista där överst finns kassa och bank, längre ner värdepapper, belåningsmöjligheter och fastigheter och längst ner "The Family Silver".
Det betyder att M stiger när aktier och fastigheter stiger i värde.
Och tvärtom.
There is practically no limits of the amount of money that can be created.
If the Animal Spirits is there, money will increase.
If the Animal Spirits is not there, we will have big problems
and may use the R-word, or perhaps even the D-word.
Animal Spirits heter på mäklarspråk Sentiment
Det finns en stor mängd pengar med mera, i det man skulle kunna kalla M8, i skattkistan.
Mitt tidigare försök till storverk.
If the burgeoning numbers for money market mutual funds — a form of quasi money — are included alongside the conventional broad money data, money growth is on the up.
John Plender
Räntebetalningar försvinner in i finansvärldens labyrinter
Man bör inte oroa sig så mycket för statsskulden och framförallt bör man skilja ut statsskuldräntorna. Det görs också i finansplanen.
Jag frågade Copilot: Different impact on the economy if the ourlays are interest on government debt or if it is usual expenditure like buying aeroplanes?
Svaret blev: Absolutely, Rolf—there’s a significant difference in how these types of government outlays impact the economy
Den hälsosamme ekonomisten Mattias Lundbäck har på sin website
under rubriken Bankerna tog våra pengar, den 31 December, 2024, fört en liknande resonemang.
- Förklaringen till denna /Sveriges/ stagnation är intressant och beror på att hushållen har transfererat en stor del av sin inkomst till bankerna.
- Trots att hushållen alltså inte drastiskt ökat sitt sparande har man därmed mindre pengar att använda till konsumtion eller sparande.
När bostadsräntan steg från 1,2 procent till 4,5 procent försvann en stor del av hushållens disponibla inkomst... ökade räntebetalningarna från 3,5 procent av disponibel inkomst till sju procent.
Riksbanken, liksom Fed, har svikit sitt ansvar - Stabiliteten i det finansiella systemet. Målet om två procents inflation har förts in absurdum. Tillgångspriser som aktier och bostäder har skenat, liksom skuldsättningen.Därmed har känsligheten för räntehöjningar blivit ett hinder inför framtiden. Riskerna för det finansiella systemet har ökat.
När aktier och huspriser stiger är räntan för låg.
Centralbankerna bör avskaffa målet om två procents inflation och i stället stabilisera tillgångspriserna.
Money, Money, Money
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