Commodity Trade Mantra

Posts Tagged ‘Equity Valuations’

Last 2 Times Equity Valuations Were This High, Result Was A Historic Crash

The current P/E expansion cycle is now one of the largest in history. Although equity valuations are typically highest during periods of low interest rates, the current 18x P/E stands at the upper end of the historical valuation range. During the last 40 years the only instance in which S&P 500 forward P/E exceeded 20x was the Tech Bubble (peak of 24x in December 1999).

Is the Stock Market Now "Too Big to Fail"?

The stock market is now integral to the economy as a measure of sentiment & evidence that all is well with the economy. If the stock market is now too big to fail, the Federal Reserve will have to prop it up whatever the cost. Ultimately, this may require indirect purchases of stocks–an action that other central banks are already pursuing directly or indirectly via proxies.

Yes, A Gold-Backed Renminbi Can Dethrone The US Dollar

The US appears to be doing everything in its power to hasten the relative decline of its own currency. Seems that the days of exorbitant privilege of issuing a currency that’s also the global reserve currency may be coming to an end – to be replaced, in time, with a bi-polar reserve currency world incorporating both the US dollar & the renminbi.

It Can't Be A Bubble! Does One Actually Exist Or Not?

Ultimately the question is whether brisk money supply growth will be maintained and whether the economy’s real pool of funding is still large enough to allow for additional diversions of scarce resources into bubble activities. Most of the time, it’s the eventual slowdown of money supply growth that brings a bubble to its knees.

Have The Emerging Markets Gotten Oversold?

During the past few months, Emerging Markets have been subject to much pessimism, but periods of short-term volatility are certainly not and don’t change our long-term conviction of the potential emerging markets hold

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