Posted on 09/19/2007 6:51:42 PM PDT by Revel
Buckle up, folks!
The day anyone puts up a 4800 page treatise on this site will be the day that Sacramento melts.
“The IBES valuation model compares the 12-month forward estimate earnings yield (earnings/price x 100) of the S&P 500 to the current yield of the 10-year Treasury note.”
Here’s the explanation of the IBES valuation model. I now can see the likely problem.
There probably is an interactive effect going on between the model, the estimate makers, and the rate setters of the Treasury note. This would affect the model in unpredictable ways making it unreliable. The evidence for this lies in the model staying in the extremely undervalued territory for so long and for so flat. If the model was working correctly, this should not happen.
An alternative hypothesis is that the exploding money supply is affecting the Treasury note yield and / or earnings estimates in unpredicable ways. Again making this model unreliable.
The big problem with this IBES valuation model is that it relies on figures created by man, not measured by man. Hence, it is going to be more than usually affected by the interactive effect.
I don’t think this current IBES valuation model is any longer valid. Of course, I could be wrong, who knows?
Global Warming...Market Cooling.....same HOOEY basket UNLESS the market is being MANIPULATED by SOROS, Lewis, and the Clintonoids!!
“When I try to use gold coins to pay for routine purchases, not a single cashier can make proper change.”
You’re lucky if they can make change from a FRN.
It is.
Except that most Americans are invested in long equity mutual funds, and have neither the aptitude nor the access to trade short or switch to commodities. For many, it will be a very rocky ride - and the consequences of the "poverty effect" remain to be seen.
We have nothing but beer. Beer itself.
####think it’s the WOE that will make the difference in the next decade. That’s the war on entitlements. The fact that we haven’t even started it doesn’t bode well.####
Well if it all tanks then it would be hard for the democrats/socialists to increase entitlements, raise taxes and pay for all that illegal alien schooling and free hospital care. The socialist position kinda becomes a political liability at that point.
When times are tough charity does really begin at home
I don’t know. Government expansion, siezure of assets, printing of money, etc., feeds on chaos and collapse. Witness Soviet Russia, Nazi Germany, Communist Cambodia, Mao’s China. The power of the gun remains even when the power of money is gone.
Both sides can and should win; nobody has to lose.
As adults we've all had the "double thank you" moment with buying and selling, where the seller says "thank you" and the buyer says "thank you". I wanted the hamburger more than the dollar, and the lady at the register wanted the dollar more. One guy makes a bundle on cattle futures while the other is please to pay the bundle out of the profits on the ranch he was insuring.
That only works for adults, and problems come up when the cry-babies tell the kids in Washington to "do something". This is what happenend to computer trades after the '87 crash and to day-trading after the dot-com bubble pop. Derivatives are not complex to the adults that use them as they serve society. Punitive restrictions shouldn't be imposed by the clueless.
Noone expecte the rate cut, with the exception of everyone. At least that's how it seemed if you listened to the finacial talking heads and pundits during the week leading up to the rate cut. The reason the bounce wasn't larger is because so many people expected expected a rate cut of between .25 and .50 ticks.
My take was that the whole article was silly and that MSN Money is no better a source on business than is say, Disneyland. Jon Markman's lack of understanding of economics shows up in his inablility to write. Take that line (please) "...credit bubble is just starting to unwind...". Bubbles don't unwind; they pop. What unwinds is a watch spring and it happens slowly over time like we want it to.
Being so careless with his metaphor mixing he may just as well have screamed
"we're up to are ass in debt and we're in over our heads!!!"
I’ve said it before I’ll say it again.... what is coming is worse in size and scale than most americans living today have ever seen.
The only hope is that it deflates slowly and the economy can absorb it... if it deflates quickly it will be uglier than most have seen in their lifetimes.
DING DING DING!!!! We have a winner
This is what he knows.. and he's absolutely right.
Warren Buffett has been saying the same thing for years. None of this is new.
No its not, its just now people are finally starting to listen.
Writing’s been on the wall for this bust for a LONG LONG time... no one wanted to hear it though.
Who wants to hear that there is pee in the punch bowl when you’re halfway through your second glass?
People called Buffett un-American when he shorted the dollar.
Folks hate Soros because of his politics and his palindrome name.
The hedge fund guys have already secured the future of their families for several generations out.
Yep, as usual the folks who created the mess will walk away with fat wallets, while everyone else has to clean up their messes.
Gotta love an industry where you can bankrupt a company completely, and still get a 30 Million dollar bonus.
Without a debt-based currency system, the only way to get wealthy is to actually take wealth from someone else.
Without fractional reserve banking, this is the economy:
10 people
$10000 money supply
All people have $1000
Person A becomes very wealthy, and at the end of the year has $9100.
The only way he ends up with $9100 is if now the other 9 people only have $100 since the total money supply hasn’t changed.
In other words, unless more money is created, he only got rich by removing wealth from others.
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