Epic Market Bubble
These are unprecedented times — for ill, not good, for most people in the US and elsewhere.
On January 4, the Economic Collapse Blog (ECB) reported the following:
The US “restaurant industry is in the midst of a complete and total meltdown that is unlike anything that we have ever seen before.”
According to Bloomberg News, over 110,000 US restaurants permanently shut down for lack of enough customers and revenue to keep operating.
ECB quoted the National Restaurant Association, saying:
The industry is in “economic free fall.”
“Thirty-seven percent of operators say it is unlikely their restaurant will still be in business six months from now if there are no additional government relief packages…”
If widespread US lockdowns are ordered ahead, perhaps another 110,000 restaurants will disappear.
ECB: “With tens of thousands of restaurants sitting empty, and with tens of thousands of others not paying rent, the stage has been set for a commercial real estate disaster of unprecedented scope and size.”
“The coming commercial real estate crisis is going to make the subprime mortgage meltdown of 2008 and 2009 look like a Sunday picnic.”
“And the longer (dire conditions continue), the larger the losses will ultimately become.”
State-sponsored/media supported Big Lies and mass deception bear full responsibility for what’s going on.
Pandemic conditions in 2020, continuing in the new year, happen annually like clockwork during the flu season now called covid — same thing renamed.
Until last year, annual pandemics were unaccompanied by fear-mongering, draconian lockdowns, and all the rest.
Planned long in advance before rolled out earlier last year, they’re all about social control, instituting an unprecedented transfer of wealth from ordinary Americans to rich ones, and creating ruler-serf societies worldwide through what’s called the Great Reset.
They have nothing to do with preserving and protecting public health — cover for the diabolical plan.
Its aim is polar opposite what’s claimed — by creating Main Street Great Depression conditions likely to be protracted, along with promoting mass-vaxxing with hazardous to human health vaccines that permanently alter DNA.
In his latest commentary, noted retired investor/market analyst Jeremy Grantham said the following:
“The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble.”
“Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.”
During bubbles like now, fortunes are made and lost, Grantham explained.
“(N)o matter how hard the Fed tries to support it…this bubble will burst in due time” like earlier ones with no exceptions in market history.
“The one reality that you can never change is that a higher-priced asset will produce a lower return than a lower-priced asset. You can’t have your cake and eat it,” Grantham stressed.
“You can enjoy it now, or you can enjoy it steadily in the distant future, but not both – and the price we pay for having this market go higher and higher is a lower 10-year return from the peak.”
Since last summer, US equities surged with speculative excess that occurs during late-stage bubbles, said Grantham.
It’s impossible to call a top, but it’s out there, the bubble to burst like all earlier ones at an unpredictable time.
And when it does in a market described by level-headed analysts as the mother of all US bubbles, watch out.
What rises exponentially can crash with lighting speed. Last winter’s sharp correction will look tame when this bubble bursts for real.
For investors and speculators who believe this time is different, pain will likely be severe and lost-lasting.
In one respect, the late stage of this bubble is unique, Grantham explaining:
“Previous bubbles have combined accommodative monetary conditions with economic conditions that are perceived at the time, rightly or wrongly, as near perfect…”
“But today’s wounded economy is totally different.”
“Today the P/E ratio of the market is in the top few percent of the historical range and the economy is in the worst few percent.”
“This is completely without precedent.”
It reflects unprecedented market mania that increases the chance ahead of an unprecedented crash heard round the world.
Begun at an unknown moment in time, it’ll likely be triggered by something unexpected.
Perhaps it’ll be when positive sentiment turns negative by some noted investors that rapidly spreads to others, and then the flood as increasing numbers of market participants bail out.
Earlier I said that only Casandra was good at predicting market tops, bottoms, and other future events — what mere mortals can’t do.
Grantham: “All bubbles end with near universal acceptance that the current one will not end yet.”
Grantham also explained long ago that that all asset classes and markets revert to their mean valuation from their highs and lows — nearly always overshooting on the way up and down.
In June 2017, when asset prices were way over-valued, Grantham said:
“(T)he US market will revert to its old means — just very slowly.”
Three-and-a-half years later at much higher valuations, reversion may be at flank speed.
Now retired from active investing after a 50-year career, I yield the last word to Grantham, saying:
“(H)ere we are again, waiting for the last dance and, eventually, for the music to stop.”
My two Wall Street books are timely reading:
“How Wall Street Fleeces America: Privatized Banking, Government Collusion, and Class War”
“Banker Occupation: Waging Financial War on Humanity”