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1ronnie

20,881 Posts.

1968

12/09/18

10:54

Post #: 35542553

Originally posted by 1ronnie ↑

September 11, 2018
Bubble Watch: the Fed has Burst the Everything Bubble
The Fed has burst the Everything Bubble.
No one has noticed it. Indeed, everyone in the US seems to be blissfully unaware. But the reality is that the massive bubble created between 2008 and 2018 is in the process of bursting.
And the Fed was the needle.
If you think I’m being dramatic, consider what has happened around the world in the last nine months.
While US stocks have continued to move higher courtesy of capital flowing into the US as a result of the Fed’s policies (more on this shortly), the rest of the world is entering a meltdown.
China’s stock market is down 10% year to date. But if you go from the 2018 recent highs, Chinese stocks are down OVER 24%... meaning they are in a full-fledged bear market.
View attachment 1286444

China is not unique.
Germany is down 17% peak to trough… just a few bad days away from a bear market too.
View attachment 1286447

Even Japan, which is being propped up by its Central Bank on a near daily basis, is down 12%.
View attachment 1286450

So why is the US not in trouble yet?
Because the Fed policy of raising rates aggressively is making the US EXTREMELY attractive to capital. Today, the yield on short-term US debt is over 2%.
This is happening at a time when MOST of the world is still posting NEGATIVE yields.
Put simply, the Fed is making US debt EXTREMELY attractive to capital… at a time when other nations are PUNISHING their debt holders. As a result of this, capital is moving into the US propping up our markets, while the rest of the world collapses.
The black line is the US stock market. The blue line represents global stocks excluding the US.
View attachment 1286438

Expand

SAS yesteryear's tech stock has plummeted 20% since yesterday's open with no news. It has dropped 90% since start of June last year. But I believe it is a recalibration of sp to the enlarging share base we have witnessed over the years. I cautioned about companies with the practice of enlarging their share base (with hope the sp does not slide)- these include YOJ, LVT, BUD, EDE, 3DP and I am sure many more...but EVENTUALLY their sp will retreat to reflect a market cap that better reflect their revenue and market development prospects and progress. These stocks trade as considerable multiples of their achieved revenues, never mind that they have steep losses too.

Column 1 Column 2 Column 3 Column 4 Column 5 Column 6

0 SAS Shares# (mil) Perf Shrs Price Mcap(m) Value drop since 9/6/17

1 12/09/2018 1845.939 $ 0.046 $ 84.91 -90.1%

2 12/06/2018 1845.939 $ 0.082 $ 151.37 -60.9%

3 9/4/2018 1845.939 $ 0.125 $ 230.74

4 16/02/2018 1720.939 $ 0.160 $ 275.35

5 10/10/2017 1720.939 $ 0.180 $ 309.77

6 21/07/2017 1720.939 123.5 $ 0.195 $ 335.58

7 9/06/2017 1720.939 $ 0.225 $ 387.21

8 10/05/2017 1720.939 $ 0.180 $ 309.77

9 23/03/2017 1668.307 $ 0.215 $ 358.69

10 3/02/2017 1646.257 $ 0.093 $ 153.10

11 19/12/2016 1641.216 $ 0.074 $ 121.45

12 2/12/2016 1618.128 $ 0.086 $ 139.16

13 Aug-16 1608.716 $ 0.020 $ 32.17

0 Great analysis

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