Juggling Dynamite

Further to my Relentless rally chasing bears to near extinction, comes this big picture chart showing today’s equity bulls over bears spread back where it was at the last deluded market peak in 2007. See also this good overview of more bubbly indicators: Fantasy stocks for a fantasy market.

Meanwhile corporate earnings, that had achieved unprecedented levels (70% above historic norms) coming out of the lean cost structures of the 2008 Recession (See Big holes in bullish case), have been steadily losing steam as shown in this next chart below courtesy of Pimco this week graphing the S&P price on top versus S&P earnings growth (or near lack there of over the past year)on the bottom.

And as for all the talk about a big rebound in 4th quarter earnings? So far corporations have pre-announced negative to positive outlook changes 10.6 to 1 as shown below. But then maybe the bulls are right: who needs earnings or customers, when markets have the Fed? Party on Garth!

Digging into some of the rules of “progressive capitalism,” with Cambridge University Chancellor Lord David Sainsbury. He discusses whether he expects pushback on the push for reform. Here is a direct video link.

Pope Francis has also recently targeted capitalism in his new papal proclamation, calling unfettered capitalism the “new tyranny.” Here is a direct video link.

David Rosenberg turned bullish in the past year as his firm searches for a buyer now that assets under admin have recovered from their 2008 losses (also see: David Rosenberg turns bullish, earns $3.1m). Hugh Hendry capitulated last week and said he had caved to business model pressure (unhappy clients) and bought back into equities. Each day of higher and higher stock prices are having the usual impact in coercing mass psychology to the bullish “this time is different” belief. With investor sentiment surveys registering cycle highs of 55% bulls and only 15% bears, there are very few left today that are willing to offer a sober view. For those still open to considering thoughts other than the “Central Banks are in so stocks can only go higher”, former OMB director David Stockman offers an excellent summary of relevant facts in this clip.Here is a direct video link.