Executive Summary Last week’s issue compared the exuberance in AI stocks (specifically Nvidia) to the Technology Bubble (1990’s-2000) stocks such as Cisco Systems. This week will expand on the broader market (S&P 500) overvaluation for the same time frame. Back in 1999, 43% of stocks were trading [...]
Executive Summary In this issue comparisons will be shown between the Technology, or Dot-Com, Bubble and the current Everything Bubble – extended by the AI boom. The first graph from Charles Schwab & Co.’s chief investment strategist shows the Price-to-Sales ratio for the Technology Bubble through the [...]
Executive Summary In January 2024 the Unemployment Rate was 3.7%, leading many to believe the economy is strong due to the labor force. However, digging into the data deeper provides puzzling results. The number of employed persons has increased, albeit so have individuals holding multiple jobs, which [...]
Executive Summary In this week’s newsletter, I review the salient points relating to market conditions in Dr. John Hussman’s Interim Comment: February 25, 2024, entitled “Speculative Euphoria and the Fear of Missing Out”. Highlights include elements driving FOMO such as new market highs, possible “soft landing,” a [...]
Executive Summary Markets are again extremely overvalued in relation to long-term norms. In this issue, I provide several methodologies to explain the situation. First the trailing twelve-month P/E ratio is 27.2, with the long-term median being about 15. Next is the Shiller P/E or the (CAPE) which [...]
Executive Summary This week’s edition continues from last week in looking at Federal Government data released. Real GDI (Gross Domestic Income) and real GDP are typically the same except for some minor statistical disparities, as described below by economist Dr. John Hussman. However, looking at the first [...]
Executive Summary Many respected economic analysts have been questioning the numbers being reported by the Federal Government. For example, the “new jobs” numbers reported through November 2023 were strong. However, they were just revised down by 439,000, leaving analysts to question the initial reports. Along those same [...]
Executive Summary The S&P500 has been pushed back to speculative highs. The 0dte options activity, discussed in previous newsletters, by large investment firms creates a very risky environment for individual retail investors. Pundits point to excess liquidity in the market as the reason for the highs; however, [...]
Executive Summary Consumer loans, credit cards and other revolving debt now exceed $1 trillion, far above the pre-Financial Crisis and pre-COVID balances (see first graph). Whenever consumers need to borrow money, those who extend credit create new methods to fulfill the need. The latest method is called [...]
Executive Summary 2024 will present significant obstacles for regional banks. Simply stated, regional banks use depositors’ funds to make loans or invest in Treasury and Agency securities. The sharp rise in interest rates in 2023 created significant unrealized losses from Treasury securities. During 2024 and 2025, over [...]