Tuesday, May 26, 2015

The U.S. Stock Market No Longer Corrects

It's been 3.5 years since the last 10% correction in the S&P 500, and we have not had a 5% correction this year. Investors, speculators and even the companies themselves are buying U.S. stocks at every opportunity with maximum leverage (debt). If the market never corrects, the only mistake you can make is having any money (even borrowed money) sitting on the sidelines, right?


  1. This is kinda like being back in 1929. And instead of allowing that mega crash, instead the Fed says let's keep the party going --- forever.

    Which is unfortunately impossible --- because if you keep cramming coke into your nose you will eventually collapse and die.

    So why is the Fed committing us all to suicide?

    This report was put in front of investment banking clients a number of years ago --- you do NOT put this in front of the likes of Goldman Sachs, JPM etc... unless you are bloody well sure of your conclusions. Because you risk never being taken seriously again...

    THE PERFECT STORM (see p. 59 onwards)

    The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy.

    But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.


  2. THE END OF CHEAP OIL Global production of conventional oil will begin to decline sooner than most people think, probably within 10 years Feb 14, 1998 | http://www.scientificamerican.com/article/the-end-of-cheap-oil/

    HOW HIGH OIL PRICES WILL PERMANENTLY CAP ECONOMIC GROWTH For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies. http://www.bloomberg.com/news/articles/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth

    BUT WE NEED HIGH OIL PRICES: Marginal oil production costs are heading towards $100/barrel http://ftalphaville.ft.com/2012/05/02/983171/marginal-oil-production-costs-are-heading-towards-100barrel/