Shiller P/E on SP500 is 34.45 today. It has only ONCE exceeded this number. No not the 1929 crash but rather the 1998 to 1999 spike move before the big crash.
It took a year to peak and crash from these numbers. Will this be the same? No idea other than the fact we are in bubble territory. BUT "NOT" according to Citibank. They just acknowledged the unprecedented move we are having and declared we are good to go! GREEN LIGHT! All steam ahead. In early February of 2020 they were mostly BULLISH on stocks. Want to know the similarity between now and then?
In the six months leading up to February 19, 2020, the S&P 500 had surged by 15.8%, reaching a series of new all-time highs.
Fast forward to today: Over the past six months, the index has climbed 15.9%, consistently setting new records.
I sure hope this doesn't result in the same setup going forward. Actually, only a major external event or real dramatic signs of inflation spiking back up should cause such a crash.
BITCOIN hit the last 2 peaks. Is the 3rd time the charm? In those last 2 it dropped big time. So lest recap: P/E ratios insane, expectations soaring, inflation still considered dead as they await the next rate cut this year. No one seems to consider that a 40-year inflation cycle that is known and used by Buffet himself is about to take off. ALL conclude this time is different and it is impossible for inflation to come back based on the new paradigm in this economy. The disparity between the few super rich owning the large percentage of this country's wealth is a non-issue. Debt by government and individuals is also a non-issue as long as disinflation remains.
Why I consider a crash here unlikely. Seasonality. Usually in October or July is when we have nasty turnarounds.
AI
