Weight of secular bear heavier than all the global monetary policy put together

Trillions in central bank printing and banking “rescues” by taxpayers, and still global stock markets are falling back to 10-year lows. This is what secular bears look like. All the money wasted in trying to pump up over-valued asset prices only holds back meaningful recovery in the economy and delays repricing to attractive investment levels. Historically after 3 or 4 of these print and fail cycles, the money and political will to intervene runs out, and finally valuations succeed in re-seting to generational lows.
Here is the Nikkei since 2002 (source CNBC.com):

The Italian market since 2002 (source: CNBC.com):

Spain since 2002(source CNBC.com):

China since 2002(source: CNBC.com):
All of which paints a rather ominous picture for the fate of still “stimulus-hoped” US stocks (and the few other markets still well above prior cycle lows):

Source: CNBC.com

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4 Responses to Weight of secular bear heavier than all the global monetary policy put together

  1. dazzo says:

    You should have put up the NIKKEI data all the way back from 1989, it would have been even more impressive. My one and only beef with Danielle is that she seems reluctant to admit that secular bears can last a lot longer than the ~16-17 year cycles she seems to espouse.

  2. aliencaffeine says:

    The only difference being between US stock markets and ‘the others’ (which includes resource-based Canada) is that WE CONTROL THE PRINTING PRESS.

    So we are safe.

  3. not reluctant at all. That particular chart screen simply doesn’t offer a longer view than 10 years. Japan has been 24+ years, but that one case does not make it the norm or mode in history. It is a logic error to only bet on a terminal or worst possible scenario. Japan is also a pretty unique set of facts ie. huge domestic savings, nasty demographics, non-existent immigration. Our secular bear may well last longer than average this time (depending on how many more policy errors are made). We will have manage risk throughout, however long it takes. We are going into year 13 of this one and we have still been able to make modest gains throughout with very little volatility. It is possible to survive and accumulate wealth through a secular bear, you just have to do pretty much the opposite of “conventional” investment theory. You can’t blindly buy and hold stocks or anything else in this climate, but you can own assets for parts of each up cycle so long as you have a method for actively monitoring risk, entering and exiting.

  4. JW says:

    True and true. I can’t help recall the famous quote from Star Trek “resistance is futile”. Not expecting another “Leahman like event”, but do expect YEARS slow grinding downward trend to retest the 08-09 low, possible return to the 01-02 level. I, sincerely, hope I am wrong for those who are buying today and driven the dividend paying stocks/etfs to new 52-week highs. It is not easy when you are trying to survive between the gap of policies, crooks, and dark forces. Kudos to those who bought US 10yr at 1.65% and sold it at 1.4%, that’s about 15% profit in a very short period of time. What now? Thank you both for your valuable opinions and charts. – Langley, BC

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