USA to Withdraw from Paris Climate Agreement

covfefe

Trump is a walking turd. 

We are doomed! 

Fact Checkers Start Your Engines...

Will this make an impact on the 2018 or 2020 elections? 

Pools will be dirtier.

...

>>>Will this make an impact on the 2018 or 2020 elections? 

no, neither will the russia bizness, but a potential collapse may.

a deceade of economic growth currently is in line with the great depression, stock market rising based on expectations of trump making changes. 8 years of QE and currency manipulation got us here(but no one will remember that). the biggest retail stores are becoming financial institutions and inventories are rising. auto, student and credit card debt all over 1 trillion each. SEC about to approve another ultra leveraged ETF, and GDP needed 12Billion in Non Profit spending to get over 1% (and i realize the BamBam admin uses the ACA to boost) 

sucky economic readings this month.  

maybe steve will set me straight, but this reads like 2005-2006

 

We could use a healthy correction to the DOW etc to keep inflation and interest rates down. Like a 10%+ correction.

...

Trump’s Stupid and Reckless Climate Decision

<<<<<but this reads like 2005-2006

Been saying the exact same thing here regarding housing prices.  Its out of control.   Near me, there are often 10 cash offers the first day, pecipitating bidding wars left and right.

The biggest difference between now and 2005-6 is that there's much less bad paper out there. No more 105% loans, with no income verification etc.

Yes, the markets are inclining, but the loans are solvent.

There's all kinds of bad paper out there.

It might not be real estate this time.

https://www.forbes.com/sites/zackfriedman/2017/02/21/student-loan-debt-s...

tons of bad paper, credit card market is in freak zone, especially with huge retailers.

student loans are a joke, i dont know a single person with student loans who is paying them, because they choose to pay rent and buy food first. 

auto, student loans and credit cards all out over 1 trillion each. more highly leveraged ETF's coming. 

even though the funny biz isnt happening inside real estate, real estate is freaky too, in all the wrong places. 

people arent buying like we are lead to believe. 

>>  tons of bad paper

got anything on 17Q1? 

also, i dont think this is how we fall again. 

Trumponomics

>>>got anything on 17Q1? 

+11% of 1trillion? 

lets put aside my use of "bad paper" 

we are designing a few homes for a few hedge fund guys, and do they paint a potential grim picture of the next 12-24 months. all with a smile, one saying that supposedly a few funds in Australia are about to pull out all their money and pay out investors due to concerns. 

going home, discuss amongst yourselves. 

>discuss amongst yourselves. 

A least give us a few hrs to google shit.

Maybe find a few Wikipedia links.

"Tons of bad paper"

It's like Woodstock all over again.

What's Pittsburg like these days? I'd like to see a game at that ballpark. 

>>>it's like Woodstock all over again.

that seemed to turn out alright, so i guess carry on. :)

what difference, at this point, does it make?

yeah, fuck it. jesus saves...

nayturtler

Ned's had that one in his back pocket for a while , turts.

Looks like the appraisers wont be our downfall this time. ;-)

ned you can't use the zoner name i've named you back at me, it doesn't work that way.

>>>>>    maybe steve will set me straight, but this reads like 2005-2006

S&P Earnings Yield:    http://www.multpl.com/s-p-500-earnings-yield/table/by-month

Today:  3.89%,  July 2006: 6.02%   (high point, corporate earnings subsequently cratered)

10-year Treasury yield:  Today:   2.21%;  July 2006:  5.09%.

Spread, S&P earning compared to "riskless rate":

Today (are we in a bubble? Maybe. But other than bitcoin and the share price of Amazon, what is in a bubble?):

S&P500 earnings are  ~ 1.7% higher than the ten-year Treasury.

11 years ago (2006) (at peak of the housing bubble and associated bubble earning in banking, finance, construction, durable goods, autos, energy, etc...):

S&P500 earnings were ~ 1% higher than the "riskless rate" (ten-year Treasury).

If you bought the S&P 11 years ago (July 1 2006) you would be up about 88%, or about 6% continously compounded, in real dollars, assuming the dividends approximately matched inflation.  http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1496362861836&chddm=1088312&chls=IntervalBasedLine&q=INDEXSP:.INX&ntsp=0&ei=PK8wWflVxJSMAfLooqgO

So would I recommend selling my stocks due to valuation concerns?  No.

Could stocks drop 50% within a year or two?  Sure, people panic.

But unless the cheeto-faced shitgibbon traitor and his traitor GOP buddies really fuck up the economy, I'd just consider that the best buying opportunity since 2009, or 2011, when the GOP traitors threatened to default on the US national debt.

That's great, it starts with an earthquake
Birds and snakes, and aeroplanes
And Lenny Bruce is not afraid

Eye of a hurricane, listen to yourself churn
World serves its own needs,
Don't mis-serve your own needs
Speed it up a notch, speed, grunt, no, strength,
The ladder starts to clatter
With a fear of height, down, height
Wire in a fire, represent the seven games
And a government for hire and a combat site
Left her, wasn't coming in a hurry
With the Furies breathing down your neck

Team by team, reporters baffled, trumped, tethered, cropped
Look at that low plane, fine, then
Uh oh, overflow, population, common group
But it'll do, save yourself, serve yourself
World serves its own needs, listen to your heart bleed
Tell me with the Rapture and the reverent in the right, right
You vitriolic, patriotic, slam fight, bright light
Feeling pretty psyched

It's the end of the world as we know it
It's the end of the world as we know it
It's the end of the world as we know it and I feel fine

Six o'clock, T.V. hour, don't get caught in foreign tower
Slash and burn, return, listen to yourself churn
Lock him in uniform, book burning, bloodletting
Every motive escalate, automotive incinerate
Light a candle, light a motive, step down, step down
Watch your heel crush, crush, uh oh
This means no fear, cavalier, renegade and steering clear
A tournament, a tournament, a tournament of lies
Offer me solutions, offer me alternatives and I decline

It's the end of the world as we know it (I had some time alone)
It's the end of the world as we know it (I had some time alone)
It's the end of the world as we know it and I feel fine (time I had some time alone)
I feel fine (I feel fine)

It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it and I feel fine (time I had some time alone)

The other night I drifted nice continental drift divide
Mountains sit in a line, Leonard Bernstein
Leonid Brezhnev, Lenny Bruce and Lester Bangs
Birthday party, cheesecake, jellybean, boom
You symbiotic, patriotic, slam but neck, right, right

It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it and I feel fine (time I had some time alone)

It's the end of the world as we know it
It's the end of the world as we know it
It's the end of the world as we know it and I feel fine (time I had some time alone)

It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it and I feel fine (time I had some time alone)

It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it (time I had some time alone)
It's the end of the world as we know it and I feel fine (time I had some time alone)

>> got anything on 17Q1? 

>>  But other than bitcoin and the share price of Amazon, what is in a bubble?

The SP500 according to the CAPE ratio.

Market Cap to GDP Ratio also says entire market is overvalued.

Thanks to Ender for the good questions via charts.

In order:

1) your "delinquency" chart shows student loan delinquency growing, but all other types at normal or below-normal rates.

a) agreed?

b) what dollar amount is associated with each loan type?  ( I suspect student loan debt is less than 20% of total debt, but that's a guess 'cause I'm lazy);

c) who holds the paper? (meaning that if German pension funds hold the paper, well, tough shit)

2) The CAPE (Cyclically Adjusted Price-Earnings)::

a)  Does it adjust for inflation?

b)  Does it compare the earnings to a "riskless" opportunity cost? (As I did?)

c) How do you deal with the massive corporate write-offs from 2008-2010 that are embedded in the "E" part of the "CAPE"?

3)  log regression relationships between price and returns, from 1881 to 2013 for the US and other markets.

a)  I think markets change over time, do you?

b)  Do you think being an equity investor in 1915 was riskier than in 2017?

c) Do you think being an equity investor in 1955, with a 90% marginal tax rate, was different than in 2017, with a 20%/15% marginal tax rate?

d) etc.

In sum, Ender, taking the above quite seriously, I get it:

Today's valuations imply future returns that are lower than in the past, there are two reasons:

#1:  lower riskless rates (opportunity costs), as the world is awash in cash among the elite;

#2: lower risk premiums, due to: - i)  lower risk;  - ii)  lower taxes; - iii) lower oportunity costs (historically low bond yields). 

Yes, future stock returns are likely to be lower than historical returns.

I have testified to that in court.

But what is the alternative that offers a better return/risk relationship than large-stock equity in the US/Canada/Netherlands/UK/Germany?

p.s., if Judit sees this, why is there the big spacing between lines?

>> what dollar amount is associated with each loan type?  ( I suspect student loan debt is less than 20% of total debt, but that's a guess 'cause I'm lazy);

If God wanted you to pay your student loans, he wouldn't have invented the forbearance and deferment.

>> I think markets change over time, do you?

Here it is over the past 35 years using Market Cap / GDP as a forward indicator. Over a forward ten year window it looks like an excellent indicator. The correlation is strong between it and actual returns.

So I'm going to bet on "No, nothing fundamentally changed over my lifetime".

>> But what is the alternative that offers a better return/risk relationship than large-stock equity in the US/Canada/Netherlands/UK/Germany?

Adding in more equity asset classes that don't correlate to the above and re-balancing on a regular interval?

Thread has potential 

Tuck Frump !

(no chart needed)

Trump's Dad shoulda pulled out too!

HA!  This isnt helping him. Maybe his base will gobble it up but the rest of the world is hating on him too. I mean, China is committed to reducing emissions, CHINA!

From those charts etc, looks like there's a lot less bad paper / risk than 2005-08.

What a wonderful gift for the children of Repugnant Party supporters.

>>>Here it is over the past 35 years using Market Cap / GDP as a forward indicator. Over a forward ten year window it looks like an excellent indicator. The correlation is strong between it and actual returns.

1)  "source"?

2)  It predicts negative returns currently (eyeballing the chart).  So you are short now?  Or - like me* - do you think this "source" is full of shit?

*I'm 92% stocks (blue chips, meaning mostly multinational) , 8% cash. 

The stocks "pay" a 3% dividend.  The cash yields 0%.  For comparison, ten year treasuries yield 2.16%.   

>> Source

https://seekingalpha.com/article/4076705-use-market-timing-tool-determin...

>>  It predicts negative returns currently (eyeballing the chart).  So you are short now? 

1) I've back tested trading on it and couldn't find a set of triggers that worked reliably. The market can stay over or under valued for a long time. It sucks to wait for good value while watching the market appreciate 100+%.

2) My time horizon is longer than 10 years.

So I am and probably always will be 100% equities. I have considered paying down my 3% mortgage loan instead of buying stock. A guaranteed 3% return sounds much better than break even over the next decade.

>> do you think this "source" is full of shit?

It's the Buffet Indicator. He said it was "probably the best single measure of where valuations stand at any given moment."
 

As illustrated in Figure 2, the "predicted and actual stock market returns" graphs the expected annual returns for three different scenarios: the optimistic case (red trendline), the pessimistic case (green trendline) and the median case (blue trendline). For the optimistic case, which is based on a TMC/GDP ratio of about 120%, the expected annualized market return is approximately 4.2%. Likewise, the pessimistic case, which is based on a TMC/GDP ratio of about 40%, gives an expected annualized market return of -8.5%. Based on a median TMC/GDP ratio of about 80%, the expected annualized market return is currently -0.7%.

http://www.nasdaq.com/article/warren-buffetts-market-indicator-reaches-1...

Your local Republican Party headquarters is now accepting used motor oil drop-offs.

Ender?

1)  Still haven't see a source for that chart (the one showing market-cap-to GDP almost perfectly tracking subsequent 10-year returns). 

2)  When did Buffet say that?  The article does not say, and provides no link, he's been a public figure for 5 decades..

As far as I know, Buffett's investment advice remains to be 90% S&P500, 10% cash.

If Buffett agrees with your chart, Ender, he lies to people in his SEC filings.

E.g., the 2016 letter that he filed on February 27, 2017 (page 24):  http://www.berkshirehathaway.com/2016ar/2016ar.pdf

Ender, please take a look at what you've posted in this thread, and, on the basis of what you've presented to us, ask yourself, based on your arguments and evidence above: 

------>     what did that "Buffett indicator" (mkt cap to GDP)  have to say about market values two years ago?   (May 2015).

------>     If that "Buffet indicator" says "overvalued" today, wouldn't it also have said "over-valued" two years ago?

Haz money, but no haz healthy planet?

>> 1)  Still haven't see a source for that chart (the one showing market-cap-to GDP almost perfectly tracking subsequent 10-year returns). 

I posted it above. Here it is again: https://seekingalpha.com/article/4076705-use-market-timing-tool-determin...

>> When did Buffet say that? 

http://archive.fortune.com/magazines/fortune/fortune_archive/2001/12/10/...

>> what did that "Buffett indicator" (mkt cap to GDP)  have to say about market values two years ago?   (May 2015).

Eye balling it about 3% annualized  growth over ten years.

>>  If that "Buffet indicator" says "overvalued" today, wouldn't it also have said "over-valued" two years ago?

No, because the market appreciated?

And I never suggested Buffet said individuals should trade on the indicator. My argument is we are in a bubble.

https://www.wsj.com/articles/more-than-40-of-student-borrowers-arent-mak...

http://professorconfess.blogspot.com/2017/06/18-straight-years-of-increa...

^

<<<<student loans are a joke, i dont know a single person with student loans who is paying them, because they choose to pay rent and buy food first. 

Yep.

Lots of bad paper out there.

Just because its not structurally identical to 2005 doesnt mean we arent in a bubble. 

>> what did that "Buffett indicator" (mkt cap to GDP)  have to say about market values two years ago?   (May 2015).

Eye balling it about 3% annualized  growth over ten years.

>>  If that "Buffet indicator" says "overvalued" today, wouldn't it also have said "over-valued" two years ago?

No, because the market appreciated?

And I never suggested Buffet said individuals should trade on the indicator. My argument is we are in a bubble.

Funny thing is, Ender, that Uncle Warren called the market "extremely cheap" in May 2015 (assuming interest rates did not spike up).

The Shiller PE is about 10% higher now than in May 2015:  http://www.multpl.com/shiller-pe/table?f=m, presumably the mkt cap to GDP is about 10% higher as well (I don't have a source for that one).    Rates today are almost identical to those in May 2015, as is the yield curve/forward rate structure.   As I've said many times, the lower the "riskless rate" (Treasuries), the higher the multiple should be.    As Buffett said in May 2015, at these interest rates, stocks are cheap (if they were "extremely cheap" at a 10% lower value, I infer that Buffett would agree that they are still "cheap")   If rates were to rise a lot*, then maybe not....so as I've been saying for the past couple of years, I think the market is reasonably priced. (*all else equal...what would cause rates to rise a lot?  I don't see rates rising a lot unless the economy really starts to hum, which would mean higher corporate profits...)

But hey, maybe Buffett and I are wrong.  If you care about this, watch the video interview with Buffett from May 4, 2015,  4 minutes of good advice.  http://www.cnbc.com/2015/05/04/warren-buffett-this-is-key-to-valuing-stocks.html