Denialists will believe anything, EXCEPT reality. This is Gene Epstein, so any third grader could refute this bullshite...
This week in Barron's: 5 Reasons why stocks won't crash. Yet...
Here we go...
First, the pre-amble:
Apparently, there's a statutory limit on how often crashes can occur:
"if a one-day crash does strike every 58 years, the next one is due 58 years from 1987, or in 2045."
He cites 1987 and 1929, fully ignoring Lehman, the Flash Crash 2010 and last August's Limit Down fiesta featuring Nasdaq 100 -13% at the open. Stop me any time...
Specious reason #1: "Stocks are not overvalued today compared to past crashes"
CNBC: April 18, 2016
Relative to GDP, Stocks Are Currently 72% Overvalued
Specious reason #2: "Recessions are preceded by an oil price spike"
Aside from having doubled in the past 3 months, today's still-low oil prices are of course a symptom of low demand and the slowing global economy. But instead, they see it as a sign of good times ahead. Holy fuck.
Specious reason #3: No housing bubble
People are not using their homes as ATM machines, yet...The only housing bubbles today are in Hong Kong, Vancouver, and Sydney where fleeing Chinese are laundering money via real estate. In the U.S., the 2007 housing market was monkey hammered so badly, that it could take decades to recover...
CNBC: April 18, 2016
3.2 Million Homeowners Are Still Underwater On Their Mortgages
Oh wait, just this week:
ZH: May 26, 2016
Wells Fargo Reintroduces 3% Down Payment Mortgages
MW: May 2, 2016
Freddie Mac May Need Another Bailout This Week
As Mel Watt, the chairman of Fannie and Freddie’s regulator, put it in a speech in February, Fannie and Freddie are quickly approaching the point where they won’t be able to weather quarterly losses without going back to the Treasury for taxpayer dollars.
Specious reason #4: The Yield Curve Is "Normal"
Because 0% forever is "normal". Sure.
The failure of this "recovery" is self-evident.
Specious reason #5: The U.S. Is Immune to Global Risk
"There isn’t a single recession on recent record that can be traced to reversals abroad. As Michael Lewis, president of Free Market, observes, “While a U.S. sneeze can give the rest of the world the proverbial flu, the reverse still doesn’t happen.”
"Because, we're exceptional, they're not"
World ex-U.S.:
U.S. Stocks Earnings Yield (E/P):
