Juggling Dynamite

Robert Shiller, Yale University professor of economics, explains his “Titianic” economic theory for why the stock, bond and housing markets all look pricey today. Here is a direct video link.

He points out that historically “there are always special factors” to argue why ‘this time is different’ and price to earnings ratios should remain permanently higher than their 144 year average. (Until they mean revert way below average once more of course)

“Stocks, bonds, real estate. How can it be that everything is expensive?” QE-seats on the Titanic everyone? Your friendly broker/dealer/financial advisers are all just itching to help you pick your seat. Step on up! Maybe you can enjoy the ride a little longer before all the passengers plunge below the waves. PE in blue below, interest rates in grey.

Nomi Prins talked about her book, All the Presidents’ Bankers: The Hidden Alliances that Drive American Power, in which she explores the multi-generational marital and protégé relationships in the financial and political worlds that she argues are the basis of power and influence in the U.S. She spoke with “In Bed with Wall Street” author and blogger Larry Doyle.  Here is a direct video link.

The rest of us and our democracy itself, continue to pay a heavy cost for revering bankers and allowing them to operate above the Rule of Law.

Suckled on the public purse through a decade of excessive government-backed student loans, education costs in America have formed a grotesque bubble. When your customers no longer have the means to purchase your service, fresh more affordable business models and solutions take over.

The cost of higher education has jumped more than 13-fold in records dating to 1978, illustrating bloated tuition costs even as enrollment slows and graduates struggle to land jobs.

The CHART OF THE DAY shows that tuition expenses have ballooned 1,225 percent in the 36-year period, compared with a 634 percent rise in medical costs and a 279 percent increase in the consumer price index.

…“Some schools are effectively limiting cost increases by bigger tuition discounting, but on the whole college presidents have not adjusted to a fundamental shift in attitudes toward the value of a high-cost education,” said Richard Vedder, director of the Center for College Affordability and Productivity in Washington. “Colleges are too slow to reinvent themselves,” particularly as enrollments are waning…”  See: College Tuition costs soar