No metric matters but Federal Stimulus and/or negative rates


If the situation with not just the U.S. but global economy is that there is no growth without negative real rates because the currencies themselves have no value without constant debt pulling them through the system, then what do P/E ratios matter if they can be obscenely high for over a year just because rates were zilch and money was printed?

And I am not constraining this to just the past 2 years. This dates back to when real rates went negative back '08. So does any TA or earnings season even matter? Because, to be brutally honest, Q1 earnings weren't that bad. And there hasn't been this wave of revisions on guidance.

What are we actually trading here?

What will you miss out on if you just wait for the printer to turn back on? Does anybody even care about actual price discovery based on fundamentals? Do the people handling your 401 realize this?

Because if the prices actually reflected sentiment anchored to fundamentals, alot of companies like XOM should not be having diaper filling days like this.

It seems that you can basically disregard this reality at your own risk. You can DCA all day and night into SPY but all it appears to be is your tax money and printed vapor being handed back to you. And it's pointless to look at historic levels. It's now obvious that the GFC and the following decade plus was likely mostly if not all vapor. The valuations have stagnated in situations or dropped entirely when they actually have to compete with Bonds (that are still negative at this point.)

It's crazy considering how big some companies are and how much they provide. It's beyond just dismissing it all as “the market is not rational”. That is fine, I accept that. But this isn't just about the market's ability to be rational.

This is about the global economy as a whole and what wealth really is. Are securities even assets if the companies they represent are just conduits for fake money to the “investors?”

Does debt matter when entire manufacturing and resource bases were exported and there is no will to reinvigorate them? Does being green matter if you can't provide heat and electricity in the winter? And you arrest people when they start burning their cash and the trees around their houses to provide heat because there is no gas? And on that same vein, does it matter if you want to go green but you have no desire to look for and provide the resources needed to do so out of your own natural resource reserves?

I am not looking to argue or anything. I am just sitting here philosophizing watching all but my dinky little EUO and UUP trades go red which ironically are green due to a dollar that now requires six of itself to buy a dozen eggs being stronger than any other asset on Earth.


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