Juggling Dynamite

For all the hype and hyperbole, the S&P 500 has gained .8% a year over the past 13.5 years since this secular bear began and today once more boasts the distinction of being one of the most hideously over-valued markets in history.

Source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

And as we look at the gains made in US economic leading indicators over the last 4 years compared with US stocks (that other supposedly leading indicator)…it all adds up…to a nightmare of risk for capital.

While media offers ’round the clock coverage of Washington dysfunction, in the real world…corporate revenue and profits (which present stock prices have forecast to infinity and beyond) are weak and getting weaker in the second half.

Meanwhile the most recent OECD report ranks Canada as having the second most over-valued housing market on the planet (note the trend among commodity producers here, too bad that commodity super-cycle is moving the other way now), just as Canadian household debt hit a fresh record in the second quarter at 163.4% debt to disposable income. (more Canadian bank shares anyone??)

As the political theater in Washington this week goes from embarrassing to worse, the world received the UN’s 2013 Intergovernmental Panel on Climate Change report confirming yet again that human behaviors have become an increasingly damaging virus for the planet and at a faster pace than previously projected. At the same time, in a separate yet related story, North American watersheds are coming under increasing stress through bad management, abuse and neglect. Care to wager how much our expensive real estate, possessions and “entitlements” are worth without access to clean air and water?

In 1992, 12-year-old Severn Cullis-Suzuki became known as “the girl who silenced the world for six minutes” after she addressed delegates in Rio de Janeiro during the summit’s plenary session. Last year, 21 years after her historic address, Cullis-Suzuki, now a veteran international environmental campaigner and mother of two, was back at the Rio+20 summit, reviewing the pressing issues still being largely ignored but threatening the planet, its people and global health. Here is a direct video link to a report taped last year.

Framing the issue in economic cost and saving terms has focused the attention of some business leaders.

Billionaire Tom Steyer, former U.S. Treasury Secretary Hank Paulson and New York Mayor Michael Bloomberg, founder and majority owner of Bloomberg News’s parent Bloomberg LP, have joined forces to fund a study to calculate how much economic risk American industries and communities face from a warming atmosphere and more extreme weather patterns. Here is a direct video link.