After drifting lower for the past month, the SPX rebounded, once again confounding the naysayers by making yet another new high. Widespread belief that stocks were overpriced has made investors
Robert Shiller, Project SyndicateInequality is usually measured by comparing incomes across households within a country. But there is also a different kind of inequality, in the affordability of homes across cities, and the impact is no less worrying.
Authored by Lance Roberts via RealInvestmentAdvice.com, Over the years, I have regularly addressed the psychological and emotional pitfalls which ultimately lead individual investors to poor outcomes. The internet is regularly littered with a stream of articles promoting the ideas of “dollar cost averaging,” “buy and hold” investing, and “passive indexing” as the solution to achieving your financial dreams. However, as I addressed in the “Illusion Of Declining Debt To Income,” if this was truly the case, then why is the majority of Americans so financially poor? But here are some stats from a recent Motley Fool survey: “Imagine how the 50th percentile of those ages 35 – 44 has a household net worth of just $35,000 – and that figure includes everything they own, any equity in their homes, and their retirement savings to boot. That’s sad considering those ages 35 and older have had probably been out in the workforce for at least ten years at this point. And even the 50th percentile of those ages 65+ aren’t doing much better; they’ve got a median net worth of around $171,135, and quite possibly decades of retirement ahead of them. How do you think that is going to work out?” So, what happened? Why aren’t those 401k balances brimming over with wealth? Why aren’t those personal E*Trade and Schwab accounts bursting at the seams? Why isn’t there a yacht in every driveway and a Ferrari in every garage? It’s because investing does NOT WORK they way are you told. (Read the primer “The Big Lie”) Here are the 7-Myths you are told that keep you from being a successful investor. The 7-Myths Of Investing 1) You Can’t Time The Market Now, let me be clear. I am NOT discussing “market timing” which is specifically being “all in” or “all out” of the market at any given time. The problem with trying to “time” the market is “consistency.” What I am discussing is “risk” management which is the minimization of losses when things go wrong. While there are many sophisticated methods of handling risk within a portfolio, even using a basic method of price analysis, such as a moving average crossover, can be a valuable tool over long-term holding periods. The chart below shows a simple moving average crossover study. The actual moving averages used are not important, but what is clear is that using a basic form of price movement analysis can provide a useful identification of periods when portfolio risk should be REDUCED. Importantly, I did not say risk should be eliminated; just reduced. Again, I am not implying, suggesting or stating that such signals mean going 100% to cash. What I am suggesting is that when “sell signals” are given, it is the time when individuals should perform some basic portfolio risk management. Using some measure, any measure, of fundamental or technical analysis to reduce portfolio risk as prices/valuations rise, the long-term results of avoiding periods of severe capital loss will outweigh missed short term gains. Small adjustments can have a significant impact over the long run. 2) “Buy and Hold” & “Dollar Cost Average” While these two mantras have been the “core” of Wall Street’s annuitization and commoditization of the investing business by turning volatile commission revenue into a smooth stream of income, it has clearly not actually worked for the investors that were sold the “scheme.” To two biggest reasons for the shortfalls was: 1) the destruction of investor capital, and; 2) investor psychology. Despite the logic behind “buying and holding” stocks over the long term, the biggest single impediment to the success over time is psychology. Behavioral biases that lead to poor investment decision-making is the single largest contributor to underperformance over time. Dalbar defined nine of the irrational investment behavior biases but the two biggest of these problems for individuals is the “herding effect” and “loss aversion.” These two behaviors tend to function together compounding the issues of investor mistakes over time. As markets are rising, individuals are lead to believe that the current price trend will continue to last for an indefinite period. The longer the rising trend last, the more ingrained the belief becomes until the last of “holdouts” finally “buys in” as the financial markets evolve into a “euphoric state.” As the markets decline, there is a slow realization that “this decline” is something more than a “buy the dip” opportunity. As losses mount, the anxiety of loss begins to mount until individuals seek to “avert further loss” by selling. This behavioral trend runs counter-intuitive to the “buy low/sell high” investment rule and continually leads to poor investment returns over time. 3) More Risk = More Return: The next “myth” is one that is too often uttered. Investors are continually prodded to take on additional exposure to equities to gain the potential for higher rates of return if everything goes right. What is never discussed, is what happens when everything goes wrong? If you look up the definition of “risk,” it is “to expose something of value to danger or loss.” As my partner Michael Lebowitz noted: “When one assesses risk and return, the most important question to ask is ‘Do my expectations for a return on this investment properly compensate me for the risk of loss?’ For many of the best investors, the main concern is not the potential return but the probability and size of a loss. No one has a crystal ball that allows them to see into the future. As such the best tools we have are those which allow for common sense and analytical rigor applied to historical data. Due to the wide range of potential outcomes, studying numerous historical periods is advisable to gain an appreciation for the spectrum of risk to which an investor may be exposed. This approach does not assume the past will conform to a specific period such as the last month, the past few years or even the past few decades. It does, however, reveal durable patterns of risk and reward based upon valuations, economic conditions, and geopolitical dynamics. Armed with an appreciation for how risk evolves, investors can then give appropriate consideration to the probability of potential loss.” Spending your investment time horizon making up previous losses is not an optimal strategy to build wealth. 4) All The “Cash On The Sidelines” Will Push Prices Higher How often have we heard this? I busted this myth in detail in “Liquidity Drain” but here is the main point: Clifford Asness previously wrote: “There are no sidelines. Those saying this seem to envision a seller of stocks moving her money to cash and awaiting a chance to return. But they always ignore that this seller sold to somebody, who presumably moved a precisely equal amount of cash off the sidelines.” Every transaction in the market requires both a buyer and a seller with the only differentiating factor being at what PRICE the transaction occurs. Since this must be the case for there to be equilibrium to the markets there can be no “sidelines.” Furthermore, despite this very salient point, a look at the stock-to-cash ratios also suggest there is very little available buying power for investors current. There is no cash on the sidelines. 5) Tax Cuts Will Fuel The Markets We are told repeatedly that “cutting taxes” will lead to a massive acceleration in economic growth and a boom in earnings. However, as Dr. Lacy Hunt recently discussed, this may not be the case. “Considering the current public and private debt overhang, tax reductions are not likely to be as successful as the much larger tax cuts were for Presidents Ronald Reagan and George W. Bush. Gross federal debt now stands at 105.5% of GDP, compared with 31.7% and 57.0%, respectively, when the 1981 and 2002 tax laws were implemented. Additionally, tax reductions work slowly, with only 50% of the impact registering within a year and a half after the tax changes are enacted. Thus, while the economy is waiting for increased revenues from faster growth from the tax cuts, surging federal debt is likely to continue to drive U.S. aggregate indebtedness higher, further restraining economic growth. However, if the household and corporate tax reductions and infrastructure tax credits proposed are not financed by other budget offsets, history suggests they will be met with little or no success. The test case is Japan. In implementing tax cuts and massive infrastructure spending, Japanese government debt exploded from 68.9% of GDP in 1997 to 198.0% in the third quarter of 2016. Over that period nominal GDP in Japan has remained roughly unchanged. Additionally, when Japan began these debt experiments, the global economy was far stronger than it is currently, thus Japan was supported by external conditions to a far greater degree than the U.S. would be in present circumstances.” The outcome of tax reform/cuts at the tail end of an economic expansion may have much more muted effects than the market has currently already “priced in.” 6) Cash Is For Losers: Investors are often told that holding cash is fooling. Not only are you supposedly “missing out” on the rocketing “bull market” but you cash is being dwindled away by “inflation.” The problem is, and as I will discuss in a second, is the outcome of taking “cash” and investing that cash into the second most overvalued market in history. As I discussed in the “Real Value Of Cash:” The chart below shows the inflation-adjusted return of $100 invested in the S&P 500 (capital appreciation only using data provided by Dr. Robert Shiller). The chart also shows Dr. Shiller’s CAPE ratio. However, I have capped the CAPE ratio at 23x earnings which has historically been the peak of secular bull markets in the past. Lastly, I calculated a simple cash/stock switching model which buys stocks at a CAPE ratio of 6x or less and moves back to cash at a ratio of 23x. I have adjusted the value of holding cash for the annual inflation rate which is why during the sharp rise in inflation in the 1970’s there is a downward slope in the value of cash. However, while the value of cash is adjusted for purchasing power in terms of acquiring goods or services in the future, the impact of inflation on cash as an asset with respect to reinvestment may be different since asset prices are negatively impacted by spiking inflation. In such an event, cash gains purchasing power parity in the future if assets prices fall more than inflation rises. While cash DID lose relative purchasing power, due to inflation, the benefits of having capital to invest at lower valuations produced substantial outperformance over waiting for previously destroyed investment capital to recover. Much of the mainstream media will quickly disagree with the concept of holding cash and tout long-term returns as the reason to just remain invested in both good times and bad. The problem is it is YOUR money at risk and most individuals lack the “time” necessary to truly capture 30 to 60-year return averages. 7) If You’re Not “In,” You Are Missing Out: As discussed with respect to “holding cash,” periods of low returns have always followed periods of excessive market valuations. In other words, it is vital to understand the “WHEN” you begin investing that affects your eventual outcome. The chart below compares Shiller’s 20-year CAPE to 20-year actual forward returns from the S&P 500. From current levels, history suggests returns to investors over the next 20-years will likely be lower than higher. The Truth No one can rely on these “myths” for their financial future. Again, if the “myths” above weren’t “myths,” wouldn’t there be a whole lot of rich people heading into retirement. In the end, only three things really matter in investing for the “long-term:” The price you pay. When you sell, and; The “risk” you take. Get any one of those three things wrong, and your outcome will be far less than you have been promised by Wall Street.
**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * Public Spheres for the Trump Age: Fresh at Project Syndicate | Equitable Growth * Hoisted from the 2007 Archives: Clueless Brad DeLong Was Clueless: Central Banking and the Great Moderation * **Josh Barro**: GOP healthcare bill will poll badly no matter what: "Now I have to call those providers' offices and get duplicate receipts and upload them and allow seven to 10 days for processing... * **Patrick Iber**: On Twitter: ".@davidsess has a phenomenal review/essay of @dandrezner's _The Ideas Industry_ in the latest @NewRepublic... * **Paul Krugman** (2015): When Values Disappear: "Back in the 60s and 70s... there was much talk about the disintegration of... African-American values... * **James Hamilton**: Are we in a new inflation regime?: "I’m not saying the Phillips Curve has no basis in facts... * **Laura Tyson and Lenny Mendonca**: Kansas or California?: "Donald Trump and congressional Republicans[']... claims are baseless... * **Dylan Matthews**: What’s the point of an anti-immigrant left?: "Beinart’s policy argument is... mistaken... * **Paul Krugman**: Oh! What a Lovely Trade War: "I’m not making a purist case for free trade here... ---- **Interesting Reads:** * **Dan Diamond**: On Twitter: Many GOP senators, home for...
**Comment of the Day: Investingidiocy**: How Leveraged Should Your Stock Market Investments Have Been? : "So... Optimal Kelly. Right?..." This is what happens (or would have happened). That's the baseline for discussing what one should have done (and what one should do). But it doesn't lead to any immediate conclusions, as issues are complex... As I understand it, the Kelly Risk Criterion has a legitimate claim **if** your portfoio is all of your wealth, **if** the bets are independent, and **if** you have a constant degree of relative risk aversion of 1: log utility, in which equal proportion increases in your wealth generate equal steps toward eudaemonia. If you have other resources (or obligations), if the bets are not independent, or if you have a different utility function than log and thus a different degree of relative risk aversion, you should not be doing Kelly but should be doing something else. Do note that, with monthly rebalancing, the β=4 portfolio loses 100% of its wealth between August and October 1929; that the β=3 portfolio loses 99.9% of its wealth between August 1929 and May 1932; that the β=2 portfolio loses 98% of its wealth between August 1929 and May 1932;...
## How Leveraged Should Your Stock Market Investments Have Been? **J. Bradford DeLong and Siyuen Chen** Here we have Robert Shiller's working, updated data series for the U.S. stock market over the long run: starting in 1871—back when the stock market was overwhelmingly railroads—with the Cowles Commission Index then spliced to the S&P Composite . If you had taken 1 in real value, invested it in the stock market in January 1871, reinvested the dividends, and paid no taxes, you would have 16,000 today. Such are the returns to patience, risk-bearing, diversification, and capital ownership in the extraordinary economic boom that was the extended American century. By contrast, if you had taken your money and invested and reinvested it in 10-year U.S. government bonds—again, without taxes—today you would have only 37 in real value. "Only". That 1-to-37 in real value is itself powerful testimony to how scarce financial capital has been in the economy over the past century and a half even when it has to pay the enormous safety and liquidity penalty that the market has exacted. Take a look at the stock and bond portfolios as they compound here: The cumulative real return from investing in the S&P...
Gold Up 8% In First Half 2017; Builds On 8.5% Gain In 2016 - Gold up 8% in first half 2017; builds on 8.5% gain in 2016- U.S. dollar down 6.5% - worst quarter in seven years- Gold higher in all currencies except Draghi's euro - Gold outperforms bonds; similar gains as stock indices- S&P 500 and Dax outperform gold marginally- World stocks (MSCI World) up 10%; gold outperforms Eurostoxx (+6%) & FTSE (+2.3%)- Silver up 3.7% in first half ; builds on 15% gain in 2016- Stocks, bonds, property buoyed by stimulus- Resilience in gold as world struggles to hold confidence- "If one hasn’t diversified this would be a good time to do that" - Shiller Editor: Mark O'Byrne Finviz.com From President Trump taking office, Fed policy tightening to European and UK elections, Brexit rumblings and growing Middle Eastern risks, the first half of 2017 gave witness to a few trends which look set to impact markets in the coming months. Gold and silver are amongst the best performing assets in 2017, with gains of 8% and 4% respectively and stayed resilient despite poor sentiment. Demand drivers such as geopolitical uncertainty, a weak dollar and low interest rates continue to provide support for the precious metals as does renewed robust demand in the Middle East, India and China. Given 2016 finished with a sell-off in the precious metals, both gold and silver have remained impressively resilient in the face of overwhelmingly bearish sentiment in much of the media and with the retail investing public in the U.S. and most of the western world. Gold rose in value in all currencies except the euro in which it fell 1.2%. This is compared to say the likes of crude oil which has been under pressure of late and experienced a 20% correction. Not even the world's two top oil producers agreeing in May to prolong their ongoing output cut from the first half of 2017 to the end of the first quarter of 2018 has been enough to prop up the price. For silver fans, the last few weeks have been disappointing as silver has dropped 4.9%, while gold has dropped only 1.9%. Silver often mimics gold but of late industrial traits in the metal have affected its price more than usual. We may have seen a turnaround this week however as silver has traded near a two-week highs as a stumbling dollar provided a boost to both precious metals. Trump’s arrival in January set off quite a Trump rally in the first quarter of the year however this was not able to be maintained. Multiple distractions have meant that Trump’s policy agenda has been thrown off course and delayed. The Trump rally in the first quarter appears to be stalling badly as false promises come to fruition and he struggles to execute policies in the face of powerful vested interests in corporate America and on Wall Street. The world is changing rapidly posing risks to any sort of conventional economic recovery. As a McKinsey study highlighted this week, ‘Even if we rebuild factories here and you build plants here, they’re just not going to employ thousands of people -- that just doesn’t happen,” said report co-author and McKinsey Global Institute Director James Manyika. “Find a factory anywhere in the world built in the last 5 years -- not many people work there.” Robert Shiller, Nobel Laureate economist, told CNBC this week that investors should be cautious about investing in US stocks in such ‘an unusual market.’ The CAPE index he devised thirty years ago is at ‘unusual highs’ which is concerning. The Yale professor advised, ‘One should have a little of everything if one hasn’t diversified this would be a good time to do that.’ Trump delays and scandal has weakened the US currency and benefited gold. Despite this record-high equity prices and bond prices with higher U.S. bond yields appear to have kept a lid on gold and silver prices which would normally have seen greater gains in an environment of such uncertainty. Speaking of currencies, strength in the euro has meant investors are currently paying the least for gold than they have in earlier months as the currency climbs amid speculation that the ECB plans to reduce monetary stimulus. Gold priced in euros is currently down more than 10% from its 2017 peak in April. However, further euro gains against the US dollar would likely support the sentiment surrounding gold and could lead to gold breaking out in dollar terms above the key $1,300/oz level. Gold in Euros (5 Years) Positivity around the euro is unlikely to last as fears regarding contagion in the eurozone begin to resurface. The government of Italy’s bailout of two Italian banks of a sum equal to the country’s defence budget will be enough to remind markets that a couple of positive election results is not enough to support the eurozone which is just balancing on a precipice of unsustainable debt levels. Eurozone banks in Spain, Portugal, Greece and Ireland remain vulnerable. Central banks elsewhere continue to affect sentiment around precious metals and sometimes in an unexpected fashion. Federal Reserve rate policy was expected to weaken gold, however rate hikes prior to June prompted gold to climb as opposed to tumble, as one might expect. Across markets interest rates remain historically low and government bond yields are low to negative. Worries over this situation are exacerbated further as disparities between how central banks move forward are becoming clear. For example the U.S. Federal Reserve is starting to raise interest rates but some major central banks continue to keep rates low and print more money. As a result, gold and silver both remain far more attractive stores of value. Brexit has and will continue to provide support for both metals. Gold has outperformed sterling this year (+2%) as the currency continues to suffer thanks to uncertainty regarding the divorce talks between the sovereign country and the European economic union. The country’s assumed fail safe London property market is rapidly coming undone as 75% of houses sell for below asking price. Goldman Sachs explained this week that the bank is bullish on the yellow due to ‘global growth momentum likely having peaked’ and gold therefore representing a ‘good hedge for equity.’ More importantly it pointed towards peak gold mine supply in 2017 as a reason for gold to head above it’s commodity team year-end target of $1,250. Supply of gold will continue to be anaemic while demand remains robust as the likes of China, India and Russia buy up physical gold. Yuan weakening and a slowing property market has helped to drive demand in China, while India saw its gold imports rise fourfold in May compared to last year. Considering Robert Shiller’s comments, the reasons for diversification continue to grow every day, mainly due to fear trades and poor economic management. Where should we start? Worsening relations in the Middle East, worries over North Korea’s nuclear program and therefore US-China relations, Brexit uncertainty, the gaping difference between central banks’ monetary policies, lack of progress in US congress and finally the looming threat of inflation following on from years of QE around the world. Whilst gold and silver may not have performed to the same extent they did in the first-half of 2016, we can be assured as they have held themselves well despite a bearish environment in terms of U.S. and western sentiment. There seems little cause for the precious metals to be pushed lower in the medium to long-term. The primary cause of the global financial crisis was insolvent banks and massive debt in all segments of society. This has yet to be addressed in any sustainable manner. Arguably, the financial position of banks and even more so western sovereign nations is in a far worse place than in 2008 whilst political instability is very real and poses very real risks to markets and risk assets. Gold and silver's continuing gains reflect both the massive global financial bubble and increasing geopolitical dangers. Investment and savings diversification is now more important than ever. News and Commentary Gold steady ahead of U.S. Independence day holiday (Reuters.com) Asia Stocks Mixed While Oil Gains for Eighth Day (Bloomberg.com) Industrials Push Rebound in U.S. Stocks; Oil Gains (Bloomberg.com) U.S. Consumers Sour on Outlook While Happy With Their Finances (Bloomberg.com) UK household savings ratio plunges to all time low (Nasdaq.com) Source: bmgbullion Blowing bubbles: New world economic order (ABC.net.au) The Coming Carmageddon (DailyReckoning.com) World’s Most Dangerous Man (DailyReckoning.com) U.S. Gold Exports Surge As Its Gold Trade Deficit Continues (SRSRoccoReport.com) Bitcoin Nears Bear Market Territory (Fortune.com) Gold Prices (LBMA AM) 03 Jul: USD 1,235.20, GBP 952.09 & EUR 1,085.00 per ounce30 Jun: USD 1,243.25, GBP 957.43 & EUR 1,090.83 per ounce29 Jun: USD 1,246.60, GBP 959.88 & EUR 1,093.14 per ounce28 Jun: USD 1,251.60, GBP 976.25 & EUR 1,101.91 per ounce27 Jun: USD 1,250.40, GBP 980.31 & EUR 1,111.36 per ounce26 Jun: USD 1,240.85, GBP 975.56 & EUR 1,109.32 per ounce23 Jun: USD 1,256.30, GBP 987.70 & EUR 1,125.27 per ounce Silver Prices (LBMA) 03 Jul: USD 16.48, GBP 12.72 & EUR 14.49 per ounce30 Jun: USD 16.47, GBP 12.69 & EUR 14.44 per ounce29 Jun: USD 16.83, GBP 12.98 & EUR 14.76 per ounce28 Jun: USD 16.78, GBP 13.08 & EUR 14.78 per ounce27 Jun: USD 16.66, GBP 13.07 & EUR 14.79 per ounce26 Jun: USD 16.53, GBP 12.98 & EUR 14.79 per ounce23 Jun: USD 16.71, GBP 13.12 & EUR 14.97 per ounce Recent Market Updates - Pensions Timebomb In America – “National Crisis” Cometh- London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess- Shrinkflation – Real Inflation Much Higher Than Reported- Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash- Worst Crash In Our Lifetime Coming – Jim Rogers- Go for Gold – Win a beautiful Gold Sovereign coin- Only Gold Lasts Forever- Your Future Wealth Depends on what You Decide to Keep and Invest in Now- Inflation is no longer in stealth mode- James Rickards: Gold Will Start Heading Higher On “Dwindling” Supply- Billionaires Invest In Gold- Brexit and UK election impact UK housing- In Gold we Trust: Must See Gold Charts and Research Important Guides For your perusal, below are our most popular guides in 2017: Essential Guide To Storing Gold In Switzerland Essential Guide To Storing Gold In Singapore Essential Guide to Tax Free Gold Sovereigns (UK) Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Pensions Timebomb - Pensions "Are Going To Be A National Crisis" - America’s underfunded pension system is “not a distant concern but a system already in crisis”... - Tax may explode as governments seek to bail out insolvent pension plans - Illinois, California, New Jersey, Connecticut, Massachusetts, Kentucky and eight other states vulnerable - The simple mathematical mismatch at the heart of the pension crisis... - Why the pension crisis really is “America’s silent crisis”... - Pensions timebomb confronts Ireland, UK and most EU countries By Brian Maher, Managing editor, The Daily Reckoning "This is going to be a national crisis..." “This” being America’s woefully underfunded pension liabilities, according to Karen Friedman. She’s the executive vice president of the Pension Rights Center. (A place called the Pension Rights Center does in fact exist. We checked.) MarketWatch columnist Jeff Reeves howls in confirmation that “collapsing pensions will fuel America’s next financial crisis.” “This is not a distant concern,” warns he, “but a system already in crisis.” According to data supplied by the Federal Reserve, pensions — public and private combined — were roughly 27% underfunded at the end of last year. By some estimates, America’s public pensions alone are sunk in a $6 trillion abyss. The issue, approached from any direction, is an impossible knot… a tar pit… a minotaur’s maze of blind alleys and dead ends. How has the American pension come to such an estate? Most public pension systems were built upon the sunny assumption that their investments will yield a handsome 7.5% annual return. But consider… The average public pension plan returned just 1.5% last year. Last year marked the second consecutive year that plans undershot the 7.5% return rate, according to Governing magazine. The same plans worked an average gain of 2–4% in 2015. A highly technical term describes the foregoing if it goes on long enough... and we apologize if it sends you to the dictionary: Insolvency. Briefly turn your attention to the Golden State, for example. California. State pensions are only in funds to meet 65% of their promised benefits. And California pins its hopes on that golden annual 7.5% return to make the shortage good. But it’s in a devil of a fine fix if the average public pension plan only returns 1.5%. The math is the math. California essentially depends on returns 400% above the norm, according to financial analyst Larry Edelson. But California is by no means alone. We won’t run the entire roll call of shame. But the great state of Illinois, for one, risks sinking into a $130 billion "death spiral" from its unfunded pension liabilities, as Ted Dabrowski of the Illinois Policy Institute described it. S&P Global Ratings has even threatened to downgrade the state's credit score to "junk" status. New Jersey, Connecticut, Massachusetts and Kentucky are also among the worst deadbeats. But the problems run from ocean to ocean and south to north. A report from Moody’s reads thus: For many states and municipalities, exposure to unfunded pension liabilities is already at or near all-time highs. Since cost burdens are already expected to further increase, pension fund investment performance is critical for the credit quality of many governments. Not even a "best case" cumulative 25% investment return on public pension plans would stanch the blood flow, according to Moody’s. They say that best-case 25% would merely reduce pension liabilities a slender 1% through 2019 due to weak contributions and poor past investment returns. “But I don’t have a pension,” comes your response. “This doesn’t concern me.” Ah, but have another guess — at least if you swear off your taxes in these United States. Is it your belief that governments will let their prized public pension plans flop? There are votes to consider, after all. Jilted pensioners are capable of generating a good deal of hullabaloo, hullabaloo to which the official ear is exquisitely attuned. Besides, do you think kind Uncle Samuel will turn the politically strategic states of California and Illinois out on their ears? As our resident income specialist Zach Scheidt argues: Your tax bill could explode as governments around the country seek to bail out insolvent pension plans. And you know how much politicians like to use your tax money to bail out some constituent. They like to prove their “compassion” with your money! “Expect to pay higher state and local taxes for fewer services in the years to come,” adds Larry Edelson, before mentioned. And: “Don’t be surprised if authorities of all shapes and sizes — from local governments to national agencies — up the ante to get ahold of your assets any way they can.” We would have to agree. You shouldn’t be surprised in the least. And we can scarcely imagine the holy hell that would follow another financial crisis. Illinois Gov. Bruce Rauner warns the state’s pension crisis is driving his beloved Land of Lincoln into "banana republic" territory. But we suspect the good governor’s mouth ran away with him here... Can you imagine comparing the venerable, eminently worthy banana republic... to Illinois? The pension crisis is truly “America’s silent crisis” and indeed the world's silent crisis. From The Daily Reckoning newsletter Related Content 85% of Pension Funds Will Go Bust Within 30 Years Pensions Timebomb in “Slow Motion Detonation” In U.S., EU and Internationally Investing in Gold In Your Individual Retirement Account (IRA) News and Commentary Gold steady on easing dollar, stocks amid hawkish central banks (Reuters) Technology Shares Lead Stock Rebound; Oil Gains: Markets Wrap (Bloomberg) Nikkei dives under 20,000 as Asian markets sharply pull back (Marketwatch) Tech Spoils Bank Party as Stocks, Dollar Slide: Markets Wrap (Bloomberg) The Yellowstone Supervolcano Has Just Seen 878 Earthquakes in Two Weeks (Science Alert) Source: Cape Shiller via ZeroHedge Robert Shiller: "The Index I Invented Is At Levels Last Seen In 1929 And 2000" (Zerohedge) How owning a home in Britain became a luxury (Moneyweek) Petrodollar wars - Gold in your custody cannot be hacked, erased, or frozen (Zerohedge) Should you own bitcoin or gold? That’s easy (SCH) Lessons from ten of the greatest trades of all time (Moneyweek) Gold Prices (LBMA AM) 30 Jun: USD 1,243.25, GBP 957.43 & EUR 1,090.83 per ounce29 Jun: USD 1,246.60, GBP 959.88 & EUR 1,093.14 per ounce28 Jun: USD 1,251.60, GBP 976.25 & EUR 1,101.91 per ounce27 Jun: USD 1,250.40, GBP 980.31 & EUR 1,111.36 per ounce26 Jun: USD 1,240.85, GBP 975.56 & EUR 1,109.32 per ounce23 Jun: USD 1,256.30, GBP 987.70 & EUR 1,125.27 per ounce22 Jun: USD 1,251.40, GBP 988.36 & EUR 1,120.13 per ounce Silver Prices (LBMA) Silver Prices (LBMA) 30 Jun: USD 16.47, GBP 12.69 & EUR 14.44 per ounce29 Jun: USD 16.83, GBP 12.98 & EUR 14.76 per ounce28 Jun: USD 16.78, GBP 13.08 & EUR 14.78 per ounce27 Jun: USD 16.66, GBP 13.07 & EUR 14.79 per ounce26 Jun: USD 16.53, GBP 12.98 & EUR 14.79 per ounce23 Jun: USD 16.71, GBP 13.12 & EUR 14.97 per ounce22 Jun: USD 16.58, GBP 13.09 & EUR 14.85 per ounce Recent Market Updates - London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess- Shrinkflation – Real Inflation Much Higher Than Reported- Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash- Worst Crash In Our Lifetime Coming – Jim Rogers- Go for Gold – Win a beautiful Gold Sovereign coin- Only Gold Lasts Forever- Your Future Wealth Depends on what You Decide to Keep and Invest in Now- Inflation is no longer in stealth mode- James Rickards: Gold Will Start Heading Higher On “Dwindling” Supply- Billionaires Invest In Gold- Brexit and UK election impact UK housing- In Gold we Trust: Must See Gold Charts and Research- Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty” Important Guides For your perusal, below are our most popular guides in 2017: Essential Guide To Storing Gold In Switzerland Essential Guide To Storing Gold In Singapore Essential Guide to Tax Free Gold Sovereigns (UK) Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Authored by Lance Roberts via RealInvestmentAdvice.com, Over the last couple of week’s, volatility has certainly picked up. As shown in the chart below, stocks have vacillated in a 1.5% trading range ever since the beginning of June. (Chart through Thursday) Despite the pickup in volatility, support for the market has remained firm. Importantly, this confirms the conversation I had with Kevin Massengill of Meraglim just recently discussing the impact of Algorithmic Trading and how they are simultaneously currently all “buying the dip.” As he notes, this is all “fine and dandy” until the robots all decide to start “selling rallies” instead. (Start at 00:02:40 through 00:04:00) But even with the recent pickup in volatility, volatility by its own measure remains extremely compressed and near its historical lows. While extremely low volatility is not itself an immediate issue, like margin debt, it is the “fuel” that when ignited “burns hot” during the reversion process. Currently, as we head into the extended July 4th weekend, the bull market trend remains clearly intact. With the “accelerated advance” line holding firm on Thursday’s sell-off, but contained below the recent highs, there is little to suggest the advance that began in early 2016 has come to its final conclusion. However, such a statement should NOT be construed as meaning it WON’T end as it more assuredly will. The only questions are simply when and how deep the subsequent reversion will be? Volatility is creeping back. The trick will be keeping it contained. In the meantime, this is what I am reading over the long holiday weekend. Happy Independence Day. Politics/Fed/Economy When The Fed Worries About Overheating Economy, Watch Out by Pedro Da Costa via BI Yes, The Fed Is Holding Down Interest Rates by Joseph Salerno via Mises Institute GOP Can No Longer Repeal Obamacare by Tyler Durden via ZeroHedge What’s The Matter With Health Care? by Caroline Baum via MarketWatch How The Fed Handles Stability Is Key To Avoiding Crisis by Edward Harrison via Credit Writedowns Not Secular Stagnation, The Reality Of Slow Growth by John Mauldin via Mauldin Economics The False Premise Of GOP Tax Cuts by Editorial via New York Times Did She Just Say What I Think She Said by Mike O’Rourke via Hedgeye Here’s The Real Health Crisis In America by Jake Novak via CNBC The Seattle Minimum Wage Study by Alex Tabarrok via Marginal Revolution Yield Curves & Fed Mistakes by David Keohane via FT Alphaville Rate Hike? What Rate Hike? by Jeffrey Snider via Alhambra Partners Video Markets Will U.S. Drillers Drive Oil Prices Into The Ground by Danielle DiMartino-Booth via Money Strong Uncomfortably Numb by Eric Parnell via Seeking Alpha Trader Warns We Are In A Lot Of Trouble by Tyler Durden via ZeroHedge Stock Market Sending Yellen A Crucial Message by Joe Ciolli via BI Markets Have Been Too Good For Investors by Michael Santoli via CNBC Oil’s In A Bear Market, Stocks To Follow by A. Gary Shilling via Bloomberg Stockpicking Is Only Slightly Better Than Lottery by Paul Merriman via MarketWatch The Move In Stocks & Bonds Is Dangerous by Peter Tchir via Forbes There Is No Such Thing As An Einstein Investor by Robert Shiller via NY Times The Bulls Are Still Winning by Michael Kahn via Barron’s Stocks Don’t Become Less Risky by Mair Statman via MarketWatch RIP? Death Of Diversification by Tae Kim via CNBC David Rosenberg: Stock Market In Denial by Stephanie Landsman via CNBC Might Not Have Seen The Peak, But We’re Close by Doug Kass via Real Clear Markets Investors Should Hang In There Even With A Correction By Byron Wein via Real Clear Markets Research / Interesting Reads “Tightening” Slugfest At The Fed by Wolf Richter via Wolf Street America’s Silent Crisis by Zach Scheidt via The Daily Reckoning If This Isn’t A Housing Bubble, Would Hate To See One by Mark Hanson via MHanson.com What Darwin Owes Adam Smith by Matt Ridley via Foundation of Economic Education Really Stupid Things Uttered By Really Smart People by Doug Kass via Real Clear Markets Investors Have Lost Sight of Purpose Of Indexes by Aaron Brown via Bloomberg It’s Financial Suicide To Own A Home by James Altucher via James Altucher Nope, You Can’t Afford That New Car by Catey Hill via Moneyish 10-Harmless Mind Tricks To Make People Like You by Travis Bradberry via CNBC Hold Up On That $15/hr Minimum Wage by Noah Smith via Bloomberg Leverage Will Make Any Correction Quick! by Jared Dillian via Maulding Economics Ultimate Symbol of Pre-Recession Boom Is Back Ana Swanson via Washington Post Nope, You’re Not Ready To Retire (Signs) by Katie Brockman via Motley Fool Two Main Supports Now Missing by John Hussman via Hussman Funds Stock Speculators Take Record Risk by Dana Lyons via Tumblr Yes, Bitcoin Is A Bubble by Jesse Felder via The Felder Report “Life is [Stocks] are a fragile thing. One minute you’re chewin’ on a burger, the next minute you’re dead meat.” – Adopted From Lloyd, “Dumb and Dumber”
With the Shiller CAPE index having surpassed the 30x for the first time since September 2001, its creator, Nobel Laureate and Yale School of Management Economics Professor Robert Shiller is warning investors that they should be cautious about investing in such an “unusual” market. “… the CAPE index that John Campbell and I devised 30 years ago is at unusual highs. The only time in history going back to 1881 when it has been higher are, A: 1929 and B: 2000.” “We are at a high level, and its concerning.” However, the index has risen to these levels before without precipitating an immediate collapse, Shiller said. Indeed, during the history of the stock market, it has only traded at a richer valuation during one period - June 1997 to September 2001 - as the dotcom farce blew and burst. Historical data for the index is available going back to 1881. Luckily, Shiller says, US investors at least have the option of investing in foreign markets. There are plenty of venues today that allow clients paying in dollars to invest in foreign markets. “I think people should be cautious now. We have a high market. That doesn’t mean I would avoid it all together. One can invest abroad also, the US has an unusually high stock market compared with other countries, or one can invest in low cape sectors.” “The world looks better and cheaper than we do?,” CNBC asked. “Yea – well the world believes in us, I guess. I think everyone should diversify. "One should have a little of everything if one hasn’t diversified this would be a good time to do that.” The market’s fragility is becoming increasingly apparent as vol events become more frequent. In Thursday trading, the S&P 500 was off as much as 1.4% - sending the VIX up 50%+ before the panic-vol sellers stepped in. The FANG stocks, which contributed an outsize portion to this year’s rally, are facing their worst week in five months.
Robert Shiller urges caution on the market: 'We're at a high level, and it's concerning'
Investors need to tread carefully right now because market valuations are at "unusual highs," Nobel Prize-winning economist Robert Shiller said.
Via Global Macro Monitor, This is one of our favorite posts of all-time. Thought it apropos to re-post given that everyone and their mother is trying to call the top in stocks. It’s all about yield-seeking capital flows, my friends. Tell us what interest rate is the tipping point which thwarts that behavior and we will tell you when the stock and credit markets top and flop. “John Bull can stand many things, but he cannot stand 2 , 0, .5 ,1, 1.5 , 2 percent” – Bagehot We are still far from the tipping point interest rate that sends the yield seekers back to their caves, in our opinion. I just borrowed 5-year money for my daughter’s first car at 2.64 percent. That is less than 85 basis points over the 5-year note, for a used car! Expensive Assets Yes, absolutely, all assets are incredibly expensive. But pension funds are not going to make their nut sitting in cash waiting for them to get cheaper. Seniors in Europe can’t eat with their interest earnings from negative rates. Argentina floating a 100-year bond at 7 percent-ish, even after defaulting several times over the past 30 years, is definitely the warning bell of a credit bubble closer to the top. And a contrarian call inflation is about to ignite. The FOMO * yield and return chasing behavior of the markets reminds us of portfolio managers running to catch the Titanic, knowing full well the ship is going down. They just want to enjoy the 3-day party. How long will the party last? O Lordy, help us. * Fear of Missing Out The Ambiguity of Stock Value Professor Robert Shiller, of Yale University, is probably best known for his book, Irrational Exuberance, which called the top of the dot.com bubble and the second edition called the top in the housing market. During our days on Wall Street we were big fans of Shiller’s book, Market Volatility. We asked him once to visit us in our offices and the meeting took place the day after then Fed Chairman Alan Greenspan’s famous Irrational Exuberance speech in December 1996, But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? The professor said he was in town to meet with Greenspan who was concerned about the run-up in stock prices. During the meeting Greenspan solicited his thoughts on why stocks were rising. The professor answered maybe it was just “irrational exuberance” among investors. Hmmmm…. We think Shiller’s best work was Martket Volatility and specifically the following, The Ambiguity of Stock Value Stock prices are likely to be among the prices that are relatively vulnerable to purely social movements because there is no accepted theory by which to understand the worth of stocks….investors have no model or at best a very incomplete model of behavior of prices, dividend, or earnings, of speculative assets. Shiller nails it here. Stock values are ambiguous as there are no models to determine their “true” price. Even at the macroeconomic level this is true and Greenspan addressed it in his Irrational Exuberance speech, There is, regrettably, no simple model of the American economy that can effectively explain the levels of output, employment, and inflation. In principle, there may be some unbelievably complex set of equations that does that. But we have not been able to find them, and do not believe anyone else has either. Consequently, we are led, of necessity, to employ ad hoc partial models and intensive informative analysis to aid in evaluating economic developments and implementing policy. There is no alternative to this, though we continuously seek to enhance our knowledge to match the ever growing complexity of the world economy. So to it is with our job in forecasting asset values, which can only be done with “ad hoc partial models” in the ether of ambiguity. Because prices are determined by simple buying and selling, we paraphrase Shiller in constructing our ad hoc model, Stock prices are likely to be among the prices that are relatively determined by capital flows because there is no accepted theory by which to understand the worth of stocks. In our experience getting ahead of the capital flows has been more profitable than buying what we believe to be a “cheap” stock or selling an “expensive” stock. And that leads us into the next issue of perspective based on reference points, time frames, and historical bias. Take a look at the three objects. Two charts of the exact same market, the S&P500 over different time horizons; and one picture. Do you see an S&P500 that is overvalued? Undervalued? Oversold? About to rollover or break to new highs? Do you see a young lady or an old hag? It most likely depends on your confirmation bias. Larry Summers, who will leave the White House at the New Year, coauthored a paper in the late 1980’s stating market volatility is caused by investors and traders with different time horizons. But, like Keynes’ beauty contest analogy, the true question to ask is not what we see, but what we believe the market – i.e., the dominant marginal buyers – will see. Do they see the young lady or the old hag? Or maybe beauty is relative, or even ambiguous, and we have to determine which markets will be deemed the least old or the most pretty. And that just may be the best lesson here, which we think certainly is the case for the world’s major currencies. Dollar strength doesn’t necessary equate to the young lady!
Robert Shiller: In Long Run, There’s No Such Thing as an Einstein Investor, NY Times: There are no easy answers in investing. It is tempting to replicate a successful strategy — one created by an outstanding investor, like Warren Buffett,...
For the first time since September 2001, Robert Shiller's CAPE Ratio measure of stock market valuation has topped 30x... (...and yes, we know, we "don't get it" and "this time is different" and "the world is a changed place" and so on...) Time will tell... Source: Multpl.com In the history of the stock market, it has only traded at a richer valuation during one period - June 1997 to September 2001 - as the dotcom farce blew and burst. And the market has only been this 'euphoric' once... Trade accordingly.
Authored by Jeffrey Snider via Alhambra Investments, The Net Worth of Non-financial Corporate Business declined slightly in Q1 2017 according to the Federal Reserve’s Financial Accounts of the United States (Z1). The revised quarterly figures suggest that economic net worth eased to $23.62 trillion after a record high $23.69 trillion in Q4 2016. That likely relates to economic weakness to start the year, though not of any lingering concern given what is a well-established upward trajectory. In using corporate net worth to estimate equity market valuations, however, the quarterly stumble means that under Tobin’s Q, valuations would rise sharply. The Z1 statistics estimate that the market value of corporate equities rose, gaining $1.18 trillion in Q1 alone. That was the largest quarterly increase for equities since Q4 2013. Truly “reflation” repeats. The Q ratio, which had dipped under 1.0 for each of the past six quarters of the “rising dollar”, blows back above that mark being calculated at 1.04 for this latest period. It brings this measure of equity valuations back up to where they were at the start of 2015. Our modified Q ratio, subtracting the market value of corporate real estate holdings from net worth, also rose sharply despite a small gain for estimated CRE. By whichever Q valuation measure, the market is pushing back toward levels comparable only to the dot-com era or the peak period at the start of the Great Inflation. Other valuation methods show the same extreme levels. Robert Shiller’s cyclically-adjusted P/E is at its highest since March 2002. At more than 30 times adjusted earnings, that is about the same as valuations in the middle of 1997. The use of CAPE as a comparison tool has been criticized lately – it’s different this time – but the real value in Shiller’s data is its length. Comparing valuations across 125 years of data gives one greater historical perspective. A more accurate way to interpret the CAPE data series, as the Q ratios, is in the frequency of distribution. Before 1995, a CAPE of 31 was in the top 1/10th of 1% of all monthly data – practically only the very peak in 1929. But in the post dot-com era, such high valuations have become more frequent; indeed, the whole market valuation has shifted upward so that what was before in the top 1/10th of 1% resides today only in the top decile. Since the CAPE data series matches quite well the Q ratios, we can reasonably assume similar interpretations. Valuations are clearly stretched, but over the last twenty years stock investors have become accustomed to that condition in a way that hasn’t ever happened before. Even the crashes in the dot-com era and the Great “Recession” failed to trigger complete mean reversion. Today’s stock prices, in stark contrast to bond prices and yields, seem to embed an expectation that economic growth will accelerate in the future to justify today’s prices. Indeed, current valuations imply a rate of growth for an extended period of time that is highly unlikely given current workforce and productivity trends. Stock investors have been waiting on the Godot of growth for most of this century and one can’t help but wonder at what point they’ll get up and leave the theater. One need not rely solely on Mr. Shiller’s methodology. Valuations across a variety of methods all tell pretty much the same story. Earnings (as reported) on the S&P 500 index were for the first time since 2014 above $100 on a trailing-twelve-month (ttm) basis in Q1. But at a “fair value” of 15 times EPS, that would imply an index level of just 1,500 for the S&P 500, nowhere near 2,429 as of this writing. By every metric and method, stock prices, in general, are not grounded in the current economy. Earnings and revenue estimates for Q2 are also coming down although still expected to show year over year growth of about 6.6% and 5% respectively. That is down from estimates of nearly 9% earnings growth and 5.5% revenue growth at the end of Q1. The downward revisions have been across the board, 10 out of 11 sectors, with energy showing the largest negative revisions. Energy though is still expected to show a large increase year over year. Ex-energy earnings are only expected to rise about 3%. Full year estimates are also coming down and Q1 may be the peak in year over year growth. Improvement in earnings in recent quarters is mostly due to two factors: recovery in energy company profits and improvement in overseas earnings. As noted above, analysts are quite busy today reducing estimates for energy companies. And if someone can come up with a bullish case for oil that doesn’t depend on OPEC actually sticking to its quotas, we’d love to hear it. Energy company earnings are unlikely to show this magnitude of growth in future quarters. On the international side, Q1 earnings growth at US companies with over 50% of their revenue outside the US was roughly double that of companies more domestically focused. It is a bit difficult to completely separate overseas from domestic earnings but earnings growth for non-US based companies certainly supports the case. Earnings growth in Europe was nearly 30% year over year in Q1 2017. Earnings in Japan doubled in Yen terms while Emerging Market companies reported earnings growth of nearly 28% year over year. And by the way, earnings growth estimates for all three are higher than the US for 2017 and rising in a lot of cases. Not to belabor the point but those markets are also cheaper than the US. And by the way, our current Alhambra Portfolio allocation is overweight international markets. Like the late 1990’s, investors are paying up today in expectation of a tremendous positive growth shift tomorrow. Like those late ’90s investors they may get an actual shift in growth but it may not have the sign they expect. It is the denominator of the P/E equation that accounts for much of today’s pricey market. Prices aren’t actually up that much in the last twenty years. What’s been missing is the growth everyone thought the “new paradigm” would usher in. The only thing missing from the mean reversion scenario is a catalyst. Unlike 2008 or the dot com era there hasn’t yet been any kind of spark to ignite the fear. In the former it was liquidations and margin calls that created the dramatic crash especially after July 2008; in the latter it was the rude intrusion of common sense brought about after many of the high flying companies of the era were finally seen as worthless, and therefore dangerous. We don’t know what the spark will be this time around and in fact there may not be one. We feel confident in saying that today’s valuations are not supported by the US economic outlook. Workforce growth – or lack thereof – productivity growth – or lack thereof – and the continued deterioration of the Eurodollar market are not supportive of the growth necessary to justify current valuations. That means that future returns on stocks are likely to disappoint – but we don’t know how they’ll disappoint. This time around is different in that valuations are more uniformly stretched; there isn’t one overvalued sector like technology in 2000. Any reversion to the mean will certainly not be like the 2000-2003 bear market when there were plenty of places to hide. And it probably won’t be like 2008 because global bank balance sheets have shrunk. But reversion to the mean will happen and all those buy and hold passive investors out there are going to be tested. How many of them will be able to weather multiple years of low or negative returns? Some of the most overvalued stocks in the market – in our opinion – are the Blue Chip dividend payers that everyone has bought as bond proxies. How much will that dividend matter if your principal is down by half? Every bull market produces excesses that get reversed in the ensuing bear market and for this one the best candidate is the dumbing down of investing, the passive indexing craze. Indexing may not be the road to serfdom but it isn’t the yellow brick road either.
Как уберечь свой бюджет от хитрых продавцов, кто виноват в экономическом кризисе 2008 года и чем опасен политический лоббизм? Новая книга лауреатов Нобелевской премии по экономике рассказывает о рисках свободных рынков
**Hoisted from June 2, 2007: On Keynesian Economicses and the Economicses of Keynes** : With respect to ... I think that there are two ways to understand the divergence of perspectives here... The first is to note that Jamie Galbraith sees Keynes's _General Theory_ as part of something bigger: combine it with John Kenneth Galbraith's _New Industrial State_, with Hyman Minsky's approach to financial crises, and perhaps with Piero Sraffa's _Production of Commodities by Means of Commodities_, and you do have an alternative theoretical framework for economics that owes very, very little to the Marshallian or even the Smithian tradition—and that owes nothing at all to the Walrasian tradition. Call this "East Anglian Keynesianism." My macroeconomics teachers—Kindleberger, Eichengreen, Dornbusch, Fischer, Abel, Blanchard, Sargent—by contrast, see Keynes's macroeonomics (not just the single book that is the _General Theory_, but also _How to Pay for the War_, _The Economic Consequences of Mr. Churchill_, the Tract on Monetary Reform, and so forth) as part of a different bigger thing. They see Keynes, Wicksell, and even Milton Friedman (though he would rarely admit it) as all groping toward an understanding of the macroeconomy that ends in the belief that limited, strategic, focused, yet powerful...
Робоэдвайзерам мешают не только медленное проникновение технологий и отсутствие законодательной базы, но и то, что им пока не верят.
Мировой фондовый рынок потерял в III квартале 2015 г. $11 трлн. Падение во всех крупных мировых экономиках сильно ударило по "бумажному богатству", и это был худший квартал для фондового рынка с 2011 г.
«Сейчас очень опасное время», - отметил в интервью CNBC нобелевский лауреат Роберт Шиллер. – «Типичное соотношение P/E (прим. ProFinance.ru: цена акции/доход на акцию), на которое обычно смотрит большинство инвесторов, на самом деле вводит в заблуждение. В то же время соотношение CAPE (Cyclically Adjusted Price-Earnings, разработанное господином Шиллером) указывает на «спра читать далее…
Не могу уже вспомнить, когда мне тут объясняли, почему не надо было ждать роста цен на недвижимость в Германии...Как бы то ни было, Бундесбанк уже разглядел возможные пузыри на рынке недвижимости в крупных городах страны :). Логика прежних рассуждений о недвижимости в Германии была простой. Валюта в Германии казалась недооцененной из-за большущего профицита по счету текущих операций, поэтому цены должны были расти. Процентные ставки ЕЦБ были слишком низкими для Германии, что обязано было стимулировать рост цен на недвижимость. Понимающие это инвесторы должны были ускорить рост цен... Сегодня трудно найти читающего человека, который еще не слышал о свежеиспеченном лауреате Нобелевской премии Роберте Шиллере. Многие сразу же нарисуют его знаменитую картинку американского пузыря на рынке жилья. Но еще больше вокруг уверенных в том, что они видят пузырь на рынке недвижимости, будь то в Австралии, Канаде, Великобритании, Китае, России...Нельзя за такое осуждать. Раз уж жилье доминирует наше и их богатство, то очень хочется знать, пора ли купить квартирку или же лучше вовремя соскочить с обреченного поезда. Вдобавок к мыслям о Москве, Лондоне, Париже, Берлине, Таллине, Риге, Юрмале и Малаге, не лишне еще раз вспомнить о Гонконге. Ведь это Гонконг был правильной подсказкой к пониманию кризиса в Латвии и еврозоне. На рисунке из мартовского доклада цб Гонконга о финансовой стабильности показаны цены на жилье. Виден пузырь 1997 года, падение цен к 2004 году, в течение 6 лет, как заказывали Рейнхарт и Рогофф, и последующий волшебный взлет к сегодняшнему счастью (или горю?). После лопнувшего пузыря в 1997 году правители Гонконга уже прекрасно понимали, чем рискуют, как понимают сейчас специалисты Бундесбанка, насмотревшись на страдания Ирландии и Испании. Поэтому они внимательно следили за ростом цен на недвижимость и изо всех сил старались защитить экономику от будущих потрясений. О перспективах Гонконга в период "необычной" политики ФРС давно уже записывал здесь и здесь. Там же сохранил параграф Позена о трудностях определения пузырей, не говоря уже об их предотвращении оружием денежно-кредитной политики. Со времени тех записей, несмотря на 6 раундов (!) затягивания гаек в Гонконге и настойчивые публичные предупреждения цб, цены на жилье продолжали расти...Уже много лет не стихают споры о пузыре на рынке недвижимости Гонконга.
Колонка опубликована в журнале "Профиль" от 20 октября 2013 года (N833) Присуждение Нобелевской премии 2013 года по экономике еще раз подтвердило, что современная экономическая теория — это не наука и с научными критериями подходить к ней глупо В этом году решение о присуждении Нобелевской премии в области экономики выглядело донельзя скандальным. Два из трех лауреатов — Юджин Фама и Роберт Шиллер — не только радикально расходятся в своих концепциях по одному и тому же вопросу, но еще и крайне неодобрительно отзываются друг о друге. Кстати, последнюю из известных мне колкостей в адрес своего оппонента Шиллер опубликовал совсем недавно, в конце июля этого года. Ситуация, конечно, абсурдная. Один (Фама) говорит, что финансовых пузырей нет и быть не может, потому что никто не знает, что это такое. Другой (Шиллер) утверждает, что пузыри возможны и он знает, что они собой представляют. Он же предсказал кризис 2007—2008 годов. Фама же уверяет, что такого рода предсказания ничего не стоят, поскольку раз в сто лет и палка стреляет, и если постоянно одно событие предсказывать, то рано или поздно повезет. Третий лауреат, Ларс Хансен, теорией не занимается и своей концепции не имеет. Он разрабатывает методы количественного анализа явлений финансового рынка. И полученные им результаты опровергают теоретические построения обоих его коллег. Впрочем, чтобы опровергнуть разработанную Фамой концепцию эффективных рынков, никаких сложных расчетов и не требуется. События 2007—2008 годов наглядно показали ее ценность. Любопытно, что Фама был одним из претендентов на Нобелевскую премию еще в 2009 году, но тогда ему ее постеснялись дать. Как будто с тех пор что-то изменилось! Один из наших отечественных либералов, защищая решение Нобелевского комитета, заявил, что «на самом деле в гипотезе эффективных рынков нет ничего такого, что можно опровергнуть эмпирически». Ну да, и в гипотезе всемирного заговора тоже нет ничего такого, что можно опровергнуть эмпирически. Невозможность эмпирического опровержения — это, согласно общепринятому критерию Карла Поппера, как раз явный признак ненаучности теории. Любой человек, претендующий на то, чтобы называться ученым, кто бы он ни был, должен это понимать. Но ни тем, кто вручает премию, ни нашим либералам Поппер не указ, хоть именно он и разработал любезную сердцу и тех, и других концепцию открытого общества. Так какую мысль хотели донести до нас таким экстравагантным способом? Еще раз подтвердилось то, о чем многие догадывались, но не решались говорить вслух. То, что называется современной экономической теорией, — это вовсе не наука, и с научными критериями подходить к ней глупо. Это религия, организованная как бюрократическая структура. В таких структурах вознаграждается не реальный результат, а правильное поведение. Что сегодня является правильным и одобряемым поведением? Прежде всего это доходящая до абсурда верность букве и духу первоисточников религии. Это качество в полной мере присуще Юджину Фаме. Он из трех лауреатов самый титулованный, обладатель множества других премий. Его теория эффективных рынков — это теория о божественной сущности финансовых рынков, то есть теория ни о чем. Другой нобелевский лауреат, Пол Кругман, в свое время иронизировал по этому поводу, что рынки правильно оценивают, что пол-литра кетчупа должны стоить ровно в два раза дешевле одного литра, но ничего не могут сказать о том, почему и литр, и пол-литра стоят столько, сколько они стоят. Присуждение премии Роберту Шиллеру сигнализирует, что в рамках религиозной доктрины допустима некоторая доза безобидной и не сильно противоречащей догматам ереси. После кризиса такой допустимой ересью были признаны исследования в области так называемой поведенческой экономики. Здесь идея заключается в том, что сам рынок устроен идеально, но сомнению подвергается способность простых людей правильно пользоваться ниспосланным им инструментом. В тех сложных условиях, в которые попала ортодоксальная экономическая наука, когда противоречия между ее утверждениями и реальным положением дел бросаются в глаза всем, хорошим поведением считается «просто возделывать свой сад» и стараться не задумываться о высоких материях. Упорный труд есть лучшее средство справиться с обуревающими человека сомнениями. Этот образец поведения демонстрирует Ларс Хансен — и поделом награда. В общем, последнее решение о присуждении Нобелевской премии по экономике показало, что она не имеет никакого отношения к поиску истины, а есть лишь способ контроля и управления научным сообществом. http://www.profile.ru/article/ekonomika-kak-religiya-77602. От ред. so-l.ru - в смысле религиозности науки показательны слова самого Шиллера в которых он это прямо и признает, см. интервью: