It’s time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.
This chart is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.
Here is a nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.
David Tice, chief portfolio strategist for bear markets at Federated Investors Inc, talks about the outlook for the U.S. economy. He sees a double dip coming and argues against stimulus to prevent it, saying policy makers shouldn’t act as “Good Time Charlie” preventing the deleveraging of U.S. households.
Bull markets, it is said, climb a wall of worry. Smart investors buy in early when worries about profits or inflation or wars scare away the faint of heart. Latecomers then bid up stocks as each worry becomes unfounded, until there is nothing left to worry about. Once there is only good news, the market peaks as there is no one left to buy.
Bear markets, on the other hand, fall into what I like to call the pit of doom. Forget about worries—actual bad stuff happens, until nothing bad is left to happen and the market bottoms as there is no one left to sell.
From early May through last week, the market dropped 1500 points into the pit, on the backs of gushing BP oil, riots in Europe, a 30% drop in pending home sales and the news that maybe your next door neighbor is a Russian spy. But now we’ve seen 680 Dow points added over seven straight up days before a slight decline yesterday. What the heck is going on?
Market Bears – what sub-species are you? "Outwardly concerned with the instability of economies and markets yet cannot resist the urge to speculate in gold stocks"--if that rings true, you’re a David RosenBear. Now you know. – Ilene
(read the below in an exaggerated Australian accent, like that guy who took bubble baths with great white sharks and electric eels but for some strange reason died in a freak animal incident.)
Krikey! This landscape is litrelly filled with Market Bears! But wait just a tick – there appear to be many different types of bears running about…all with different attributes and markings to help us tell them apart.
Let’s have a peak through the binoculars and see what we’ve got:
The Born-Again Bear (Ursus Scottradeum) - this creature was horribly wounded during two prior market crashes while remaining long and margined to the hilt. Has since sold entire portfolio at the bottom, subscribed to RGE Monitor and delights in telling the members of his old investment club what morons they are. Can be found roaring "bwahaha" at other investors on the Yahoo Finance message boards.
The Perma-Bear (Ursus Abelsonious) – the very definition of "creature of habit", Perma-Bears are right 2% of the time but tedious and pedantic 100% of the time. By never conceding the fact that anything could even possibly be a positive, they render themselves irrelevant, even during actual bear markets. Many, however, are brilliant and lovable, despite their unwillingness to change or concede.
The Conspiratorial Bear (Ursus Tinfoilicon) – A highly adaptive sub-species of the Perma-Bear. These animals are known for their over-perspicacity and have foreseen 11 of the last 3 market corrections due to a light social calendar and a fondness for Data-mining & Dragons. They are, however, always the most interesting bears to behold in the forest and serve the important role of keeping the other woodland creatures on their toes and alert.
The David RosenBear (Ursus Aurum Minotur) – a species that is outwardly concerned with the instability of economies and markets yet cannot resist the urge to speculate in gold stocks. He will justify his "playing" of precious metals with myriad warnings of inflation, deflation, mega-flation, Gaga-flation etc, but in reality, he is banking on the greater…
The following are the M&A deals, rumors and chatter circulating on Wall Street for Thursday September 29, 2016:
Qualcomm Said to be in Talks to Acquire NXP Semiconductors for $30B+
Qualcomm Inc. (NASDAQ: QCOM) is said in talks to acquire NXP Semiconductors NV (NASDAQ: NXPI), according to sources as reported by Dow Jones on Thursday. The sources said a deal, which could happen over the next two to three months, would likely be valued at over $30 billion, though NXP's market cap was already over $32 billion following the report.
By insidesources. Originally published at ValueWalk.
IRS Walks Tightrope in Plan to Use Private Debt Collectors
The Internal Revenue Service is looking to use private contractors to help collect tax debt but some warn there is a risk of increased scams and abuse.
The IRS announced its intent to use private debt collectors Sept. 26 in response to a congressional order. The federal agency hopes to have the program operational by spring. The idea could help the agency to more efficiently collect tax debt, but it might also be opening the door to fraud and abuse.
“What makes it worse is the prevalence of these scam artists who call pretending to be IRS collectors,ȁ...
The BEA changed the name from “final estimate” to “third estimate” because GDP is subject to revisions years or even decades later.
I am curious how this would impact the Atlanta Fed GDPNow forecast and the FRBNY Nowcast estimate both due out tomorrow. I have a detailed answer from Pat Higgins at the Atlanta Fed, creator of GDPNow.
I can give you a more detailed answer tomorrow after the GDPNow update is released. We don’t do an update today beca...
U.S. stocks fell as banks retreated amid growing concern that Deutsche Bank AG’s woes will spread to the global financial sector. Health-care shares sank on speculation tighter regulations will crimp profits.
In early 2009, the seven largest publicly traded college operators were worth a combined $51 billion. Today, they’ve been all but wiped out.
When Barack Obama took office, America’s seven largest publicly traded college operators were worth a combined $51 billion, with more than 815,000 students enrolled at campuses spread across the country. The schools were flooded with with people seeking shelter from the recession, returning to school to pick up new skills.
Almost eight years later, the industry has been decimated. The seven largest listed operators are worth just over $6 billion, and the most valuable co...
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I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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