Thursday, September 21, 2017

Robert Shiller says the only thing between us and a 1929 like stock market collapse is animal spirits.

Robert Shiller is sounding an increasingly bearish tone with interviews like this one where he points out that his Shiller CAPE indicator shows that the markets are about as overpriced today as they were in 1929 just before they collapsed not 80% as he says but 89% to be exact.  Schiller stops short of saying the words "animal spirits" but his implication is pretty clear: the herd is stampeding mindlessly upward despite the fact that prices are bubblicious.  The reason he's not ranting up and down about "imminent crash" like Harry Dent is because Shiller knows that bubbles can last a lot longer than people might imagine because the fundamentals / logic don't matter to people when they are winning at gambling.

At the same time, each time someone of note comes out saying the stock market is a bubble, the media reprints the recent words of Warren Buffet who says those who are negative about the US economy are "out of their minds".  Buffett must really believe what he is saying because he just became Bank of America's top shareholder.  I for one think he is insane to buy a weakling bank like B of A this late in a bull market, especially when the shares are still very far from their 2006 highs.

It has been a long standing theme of mine that big financial names like Buffett that were made during the rise of liberal financing will fail to see the end days of the economic Ponzi that they helped to create and when it all implodes their names will be dragged through the mud.  Many of my seemingly outlandish predictions, like Hillary losing the elections and many other things have come true.  Bankrupt of America inc. is likely within $5 of a major peak that Buffett doesn't see coming IMO. Will BAC be Buffett's Waterloo?

No comments:

Twitter Delicious Facebook Digg Stumbleupon Favorites More