QEuriouser and QEuriouser…

This topic has 3 replies, 1 voice, and was last updated 12 years, 2 months ago by gurusid.

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May 11, 2013 at 7:55 pm #7552

gurusid
Participant

Hi Folks,

Great video on why we need a ‘reset’:

[video]https://www.youtube.com/watch?v=FmFMlYtrnyM[/video]

Submitted by Charles Hugh-Smith of OfTwoMinds blog to ZeroHedge as a Guest Post: Degrowth, Anti-Consumerism And Peak Consumption
Submitted by Tyler Durden on 05/10/2013 10:19 -0400.

L,
Sid.

May 22, 2013 at 5:19 pm #7601

gurusid
Participant

Hi Folks,

Its a ponzi: statement of predicted stock rises ‘proves’ it in my mind, it is just the sort of hyperbole that catches the last empty bag-hoders in any ponzi scheme (I should know I’ve seen a few… ahem!).

From Tyler Durden @ ZeroHedge:

Goldman Goes Uberhyper-Bullish, Hikes S&P500 Target To 1750 By Year End, Sees 2100 By 2015

…To wit: “Our earnings estimates remain unchanged but we raise our dividend estimates and index return forecasts for 2013 through 2015. We expect S&P 500 will rise by 5% to 1750 by year-end 2013, advance by 9% to 1900 in 2014, and climb by 10% to 2100 in 2015. Our 2013 return implies a year-end P/E of 15.0x, a one multiple point premium to our fair-value estimate. We forecast dividends will rise by 30% during next two years. Dividend yield is likely to stay around 2%, in line with the 20-year average.”

5%, 9%,10% with 30% on dividends! What’s not to like! Joe SP (Sucker Punch) will eat it up, hell he’ll take out some re-fi now that the housing [strike]ponzi[/strike] boom is back on track. As ZH point out:

…All we can conclude from this is that neither Tepper nor Goldman are anywhere near done selling to muppets.
…
But don’t for a second think any of this is earnings driven. […] It is all based on prayer that Bernanke and his central planning magicians can keep on expanding the increasingly meaningless PE multiple, which incidentally would collapse if and when rate were to go back to historical levels now that corporate debt is at unseen before levels.

Lets not forget that ZIRP has effectively boosted future earnings on companies balance sheets:

By Keith Weiner on May 21, 2013 in Currencies and Banking, Gold, Sovereign Debt Crisis (via ZH)
…as the interest rate falls the discount factor used for an enterprise’s future earnings also falls. The same $1 in earnings in 2023 is worth more at a discount of 3% annually vs. 6% ($0.74 vs. $0.56).

As well as lessening the debt repayments of course.

One small QE for the FED, one giant Ponzi for mankind… :dry:

L,
Sid.

May 22, 2013 at 6:16 pm #7602

gurusid
Participant

$1 Trillion of which is in ‘foreign’ banks (can there be such a thing in a ‘global’ economy?)

Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever
Submitted by Tyler Durden on 05/21/2013 11:54 -0400

…And just to prove that ALL the unsterilized cash from both QE2 and QEternity has essentially gone to support offshore banks, here is the conclusive chart showing the change in Fed reserves and cash held by foreign banks:

Well it is the global ‘reserve’ currency after all… :whistle:

As for QE curing deflation good luck with that!

L,
Sid.
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