Lately there has been growing concern over the valuation of the US stock market, warning that it is currently overvalued. This analysis delves into the reasons behind this rating and explores the various factors that contribute to the perceived overvaluation. By trying to understand the basics of what “overvalued” means, we shed light on the …
Tag: markets
The consumer, the average citizen, continues to suffer…
In April, former US Treasury Secretary Larry Summers drew laughs from investors when he said the Fed’s next move might be tightening, not easing. In other words, Mr. Summers is predicting another rate hike, which could cause the markets to… explode. And the truth is that few traders are still laughing. Of course, the likelihood …
From New York and London to Tokyo… all indices at all-time highs
From New York to London to Tokyo, there is one commonality among global stock markets: record highs. Of the world’s 20 largest stock markets, 14 have reached all-time highs recently. The MSCI ACWI index, which tracks developed and emerging markets, is setting one record after another. In the US, the S&P 500 and Nasdaq 100 …
Inflation – Recession nightmare returns for stockholders
Journalists in the financial press often speak of a Goldilocks economy (“not too hot, not too cold”) in tribute to the Fed’s finesse in manipulating interest rates. They also use the term “soft landing” because the Fed is supposed to manage to tame inflation without causing a recession. However, these narratives, in fact, have no …
IMF: The US, a huge threat to the Global Economy – Bubbles that will burst the Markets
US budget deficits should not continue to expand in the coming decade, as they are reaching an unsustainable level that could even lead to a collapse of the global economy, the International Monetary Fund says. In particular, the IMF warned the US that its huge budget deficits have fueled inflation and pose “significant risks” to …
The nightmare Scenario in Economy, Markets, with Inflation and Bubbles
In early 2002, gold was around $300. The primary goal was to preserve wealth. The Nasdaq had already crashed by 67%, but, before bottoming out, it lost an additional 50%. The total loss was 80%, with many companies going bankrupt. In 2006 the Great Financial Crisis began In 2008, the financial system found itself minutes …
The big risks that threaten the Markets for 2024
The pursuit of prediction verification is like a game, because rare and catastrophic extreme events are unpredictable. Therefore, it is better to approach accepting in advance the reality of market risks and to prepare for their possible appearance. 1. Expansion of the conflict in the Middle East After the Hamas attack on Israel on October …
The FED serves Wall Street (and capital gains taxes), not the Real Economy
Nobody likes tough macro events, especially during the holiday season, but some things need to be said, according to Trust Economics. As you know, US Federal Reserve Chairman Jerome Powell has promised that 2024 will be the year of interest rate cuts. In this regard, it should be pointed out that Powell is neither a …
The digital dollar and the collapse in the “fake” wealth of the markets
Why did the decoupling of production from consumption through the operation of financial markets and the leverage of values become the greatest historical economic experiment? The financial “bubble” that began in the late 1980s is expected to burst with a wave sweeping away the forms of economies we know. “Bad currency” had long driven out …
A Global Liquidity Crisis is beginning to appear on the Horizon
The dynamics of the global market vis-à-vis all those markets where a global liquidity that in 2019 reached 130 trillion dollars, well above the global GDP of 80 trillion dollars, is looking for a way out, tends to be the most decisive for the developments in the global economy. There are estimates that today this …