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Thursday, 19 February 2015 00:00

When Everybody Thinks They're Right, They're Almost Guaranteed to be Wrong! I Think This Is The Biggest Bubble In World History Featured

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On January 14th, 2015 I penned Toil, Trouble, Crash and Bubble! Monetizing The Biggest Crash of the Millenium? with the following graphic...

Here comes the crash

For those who think I'm doing the Doom & Gloom thing, I simply suggest you do the math. The ECB does QE2, the currency markets go bonkers as those central banks with small balance sheets run out of the way of the steamrollers (but nobody expects lower quarterly results, of course), and every fund and their aunt Petunia engage in the most thoughtful macro and intensive fundamental analysis ever possible. What's the result of this deep, introspective thinking. Chase the Fed ECB, of course!

This is what the sacrosanct advice of Goldman Sachs macro research department suggests, after all. They accurately predicted the (obvious) ECB QE program, and suggest you pile into EU equities for the same reason the rest of the fund world did - low rates mean higher stock prices, right? Well, it's not so simple. I think investors should look a little deeper and dig past the groupthink. Europe has severe structural issues that a NIRP answer will exacerbated vs. ameliorate, at least over the medium term. Yes, you get that short term pop, but then what. I don't think the Goldman nod to groupthink is a good idea. After all, they also suggest - "Sell the Swiss franc against the Swedish krona: A monetary policy divergence play." This would have lost forex traders' a fortune. Wait a minute, it did lose them a fortune, didn't it. One really should have seen it coming, for those small countries cannot outrun the ECB, and it was obvious, reference  It's All Out War, Pt 3: Is the Danish Krone Peg to Euro More Fragile Than Glass Beads? The Danish National Bank Infers So!

And as for the wisdom of piling into those equities because we're NIRPing... Professor Shiller calculates us at being at an all time, worldwide historical high in terms of real PE. Wait, but... It's different this time!

The worlds biggest bubble

 I'm looking for traders to take positions (either in agreement with, or contrary to) the research and opinion contained herein - or using your own trade setups and fundamental/macro outlook - via our UltraCoin P2P swap platform. You can use actual capital or I can give you Testcoins, basically, play money, to trade with me and my team and all I ask for is feedback on the system and the ability to quote you (which is not mandatory, but it would be nice). You can trade stocks, bonds, commodities, forex and forex pairs long or short, or swap the exposures directly for another asset, ex. S&P 500 for the LSE 100, Apple for Google, etc. Digital leverage is available, up to 10,000x worth (double digit profits/losses can be had from 11 basis points in movement, or less - so be careful), with no possibilty of a margin call since the trades are pre-funded.

Any who are interested can contact me here, and download the trading client here.

Read 3110 times Last modified on Thursday, 19 February 2015 11:41

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