US stock boom is running out of puff

Although most will consider this week’s monthly meeting of the Federal Reserve as a non-event, it must be reminded that it coincides with the two year anniversary of the second longest ever bull market in US stocks history. At just over 2600 days, it will surpass the post WW2 to mid fifties boom, but still has another two years to go before the biggest, longest, hardest ever – the tech boom of the 1990’s.

Bank of America compares the magnitude of all three here:

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The question remains could we be heading for a repeat of the No.1 boom? Don’t rule anything out in this mad world of central banks mistaking wealth for prosperity! But when liquidity is so excessive as the currency wars rage, with bond yields approaching negative across the world as real earnings are dropping the risk remains on the downside:

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  1. Ever heard of a thousand trillion dollars? Now you have >> In debt!
    Monetization, corporatism and bureaucratic governance – these are three basic elements of modern society and their interaction creates our livelihood and lifestyles.
    Using the three levers of the modern economy – central banks, corporations and government – those guiding the system have created intractable problems.
    In fact, sovereign, corporate and consumer debt are all said to be entirely unmanageable.
    And markets like the thousand trillion dollar notional derivatives markets are basically unsalvageable.
    Professional investors and consumers alike are loath to make investments because it’s not clear which corporations are solvent and which are not.

  2. The boom had to go on in order for CEOs and their board members to cash out their over priced stocks. When it falls, the pension funds pickup the poop (teachers, fire fighters, etc). The fund mangers will get massive commissions as its tied to portfolio size. This is how you play a game you never lose.