Monday, July 20, 2015

Stockman on Last Friday

Those who took a hit in 2008 and recovered are quite complacent, "next time it will be the same."  A crash, then a recovery over time, and then all will be well.  don't we hope it will not be the same?

A recovery in which unemployment does not recover, in which people take on another trillion in unbankruptable student loan debt, and in cars too, but at least bankruptable, endless wars, housing prices skyrocket as income stagnates, and gas is still $4 a gallon?  We want that again?

No, we want a crash that marks assets to market, and then a solid, true, organic recovery can happen.

Stockman looks over the Friday pop, and he sees a company that I've been tracking as a false economy standard,, within a crowded field.

And that gets to the real truth about the Wall Street bubblies which were flowing last Friday. Morgan Stanley’s chief equity strategist, like the rest of the sell-side stock peddlers, has it exactly upside down; and the proof of the pudding in this instance lies is in Morgan Stanley’s own “New Tech” index of 16 high flyers of the present era.
This charmed circle includes Google, Amazon, Baidu, Facebook,, Netflix, Pandora, Tesla, LinkedIn, ServiceNow, Splunk, Workday, Ylep, Priceline, QLIK Technologies and Yandex. Taken altogether, their market cap clocked in at $1.3 trillion on Friday. That compares to just $21 billion of LTM net income for the entire index combined.

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Anonymous said...

John, I stand with you, as I have been awaiting a true crash for years, and will be happy when it finally happens. It may be a difficult time, but worth it. Especially for entrepreneurs and go getters. My only concern is the ridiculous amount of military build up all over the world, foolish play and another World War breaking out. This time it may be a LOT closer to home, and the Pacific Ocean :(
Buy a Farm, and bury your gold folks.