Decline Barely Started

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Despite the rout, the S&P is just barely down for the year.

Expect a "Lost Decade"

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Why?

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The Shiller PE Ratio also known as "CAPE", the Cyclically Adjusted Price-Earnings Ratio, is in the stratosphere. It's not a timing mechanism, rather it's a warning mechanism.

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The main idea is that earnings are mean reverting.

On that basis, stocks are more overvalued than any time other than the DotCom era.

But that is misleading. In 2000 there were many sectors that were extremely cheap. Energy was a standout buy then. So were retail and financials.

It's difficult to find any undervalued sectors now other than gold.

Financial Crisis Coming

At 1:40 AM (this morning), I posted Eight Reasons a Financial Crisis is Coming.

It's been about 10 years since the last financial crisis. FocusEconomics wants to know if another one is due. The short answer is yes.

Click for details.

Mike "Mish" Shedlock

Where Will the Stock Market Be a Decade From Now?

An interesting discussion took place on Twitter today regarding the stock market.

Italy Heads for 2nd Lost Decade, Entire Eurozone on Verge of Contraction

Italy's GDP is still below the 2008 level. PMIs from Germany and Italy show the entire eurozone on verge of contraction.

Investors Abandon Hedges: Who Needs Em? The Stock Market Only Goes Up

With the stock market on a record tear, investors increasingly view hedges as a money-losing operation.

Stock Market “Crash” Unlikely: It’s the Debt, Stupid

Many people have been predicting another stock market “crash”. I have not been in that camp for reasons I will explain below.

Memo Released, That's Just a Start: Let it All Hang Out

At long last, the "blockbuster" memo was released. What did it say? Nothing more than's been hinted at for weeks.

Housing Least Affordable in a Decade

It takes 23.6% of median income to make the monthly payment on the average-priced home.

Stock Market Erases All Gains of 2019

The S&P 500 rose almost 29% in 2019. Today those gains were erased this morning but now stocks are off the lows.

Stock Market 10% Plunge is the Worst Since 1987

The Dow fell 10%, the S&P 500 futures fell 10.6%, and the Nasdaq futures fell 10.5% in a stunning rout.

Just 5 Stocks Account for 20% of the S&P 500

If you believe you are diversifying by buying an index ETF, you are mistaken.