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ChuckKay
6 minutes ago
On the way up it didn't matter how overbought this index was. It just kept going up no matter what. Are we on the verge of the opposite? Given the overvaluation on a market cap to GDP basis (showing fair prices roughly half what they are), the analyst estimates being in the clouds, the housing market in the US beginning to falter, countless shoppers in the US maxed out not only on credit cards, but buy now pay later loans, the endless complacency, retail investors in the US FOMO buying leveraged ETFs (hence extreme employment of leverage), US banks and institutions unloading shares and buying treasuries, tariffs, it being late cycle, market performance vs GDP growth the last couple years being a very very rare extreme, insider share purchases over sales at record levels, I dunno. Need I also mention the particulars regarding Japan, namely the limited power the government has not to spend given its very extreme debt to GDP level, its inability to lower rates much given it did not raise into high inflation, the massive size of the BOJ balance sheet, the debt being so massive that any government spending will have limited power to do much (given the debt multiplier is hence very very low), the massive levels of debt in Japan across companies and individuals accustomed to handouts, all of the zombie companies in Japan now struggling, the rising bankruptcies, the extreme multidecade levels of capital misallocation across Japan, the falling population of Japan. The multidecade long failure of Japan to raise its GDP. And the list goes on... My point? We ought to have rallied. But we didn't. Hence, I think the collapse has begun in earnest.
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