The losses from this epic con job won't be measured in dollars, they will be measured in decades. In the meantime, what a waste to allow the most corrupt era in U.S. history pass by without cashing in...
"If you're playing poker and you don't know who the sucker is, it's you" - Warren Buffett
Every investor should be asking themselves why is it that Warren Buffett recommends index investing for the general public whereas for himself he is currently sitting on record cash? Because he knows that a market that is extreme overvalued is a zero sum game.
The "Buffett Indicator": Market cap / GDP
"Stock market cap is now at 195% of the most recent nominal GDP, whereas this ratio was 141% in 2000"
"2000 to 2009 is known as the lost decade because the most bench-marked equity index, the S&P 500 (SPX), lost nearly 1% each year during this period on average. People who retired near the height of the tech bubble were not able to make money from equity holdings in their portfolio"
The largest stock bubble in human history has arrived at peak Baby Boomer retirement:
It's at times like these when insiders are cashing out at public expense using stock buybacks to cover their tracks.
Once upon a time stock buybacks were illegal:
"It is worth noting that until 1982, stock buybacks were illegal—deemed as market manipulation. But since then, they have become the irresistible opioid of the financial world...this buyback bubble is really the ultimate expression of that philosophy, which has turned the stock market into a casino and our corporate board rooms into parlors for rigged betting"
Market manipulation indeed. What record stock buybacks are hiding is massive share dilution and the fact that aggregate profits are not increasing, only per share profits have been increasing over the past decade. Why? Lack of investment in the real economy. All "investment" is in financial alchemy.
The article above blames the Fed for keeping interest rates low for the past two decades. However, the global economy has been in a state of extreme deflation since China joined the WTO in 2000. The Fed had no choice on interest rates. Does the author also believe that mercantilist Japan and Germany chose the same policy? Of course not. And yet they all arrived at the exact same destination.
The U.S. is the tallest midget in the circus:
The stock buyback alchemy however WAS turbocharged by the Fed's quantitative easing which kept a bid under equity prices while insiders cashed out. Socialism for the rich. Put it all together and what do you get? The largest leveraged buyout in human history as insiders cash out at public expense.
One of these "recessions" is not like the others:
In addition of course are the record cash outs by Silicon Valley via the IPO and SPAC market.
This past week, 2021 officially became the largest IPO issuance year on record in terms of number of IPOs.
Five months being the new "year".
Millennials seeing this epic con job playing out at their parent's expense, chose to try their luck in the crypto Ponzi market instead. The next logical step for a society desperately seeking effortless wealth in a zero sum game where everyone believes that someone else is losing.
As I pointed out on Twitter, Bitcoin unlike most of the other thousands of "ShitCoins" has a finite supply of coins that can be produced. Which means that in terms of carbon footprint it can't scale. And every time it makes a new high and a new crash, it wipes out more newbie speculators.
Nevertheless, today's con men optimistically assume a limitless supply of useful idiots at their disposal, so they never stop hustling.
In summary, there's a sucker born every minute, and it would be a shame to allow the most corrupt era in U.S. history pass by without taking full advantage. Because when the rioting begins, we can be sure that the *new* economy consisting of bilking investors will be over.
And then the sheeple will realize to their chagrin, the cost of this widely accepted fraud is not measured in dollars, it's measured in decades. And not everyone has that kind of time.
