Im max kaiser this is the kind of the report match skies are named by the magazine. The spectator magazine in the United Kingdom one of the most annoying things of 2019 thats right im on the same list as great a thorn bork and a lot of other stuff wow thats awesome take that joe rogan. Yes youre one of the 41 most annoying things about 21000 according to spectator magazine they call you an ex excitable duck sounding economist and con excitable dux voiced economist yes lets quacked on with these have of course the markets ended 21000 with partying like its 1999 you know in 1999 if you recall because you were part of that dot com thing well the nasdaq ended up 85 percent in 1909 it ended up almost 40 percent and 21000. 00 so its boom times again and were going to look at some tweets here about the whole 2019 assessment 21000. 00 just keeps Getting Better and better the nasdaq closed above 9000. 00 for the 1st time ever and is up almost 38 percent for the year that was earlier in december before the end of the year so were still looking back at that time going to comparison time 899 nearest year and youre indicating or inferring bubble like qualities i would imagine and it does look bubblicious you know but these are the rest of the world isnt dire straits other you know also think about it the venezuelan stock market was up spectacularly recently since you said that im going to jump ahead to some a few another 2 tweet here to indicate what might be happening the rest of the world might be in distress but the fact is the Us Federal Reserve bank has been printing enormous amounts of money and its going in lockstep with the increase in the nasdaq in the stock market because remember from mid september when the repo market turmoil erupted the fed started printing money and in the last 2 weeks the 2019 here were in 20202020 but theyre still printing the last 2 weeks of 21000. 00 a printed 450000000000. 00 their asset their their balance. Expanded by that so lets look at that fed Balance Sheet moves up to 4. 166 trillion highest level in 14 months over for him to the 6000000000 over the last 4 months quote in no says is this q. E. This is nothing like it drone powell had said october 8th 2019 you can see that its a v. Shaped recovery in the feds Balance Sheet since you know the nasdaq as i said was up 40 percent nearly 40 percent so 60 percent of the gain and the nasdaq happened from that point lets revisit my ongoing theory which is that youve got really low Interest Rates now for 10 years near 0 or in some cases negative and there are a few private equity folks that are taking all the stock off the board you know in remember a monopoly. The winner has all the real estate and everyone else becomes a right so this is the same thing nasdaq is just a proxy for monopoly and the players that are winning this are both the bank and park avenue and park place the 2 most valuable spots on the board game of monopoly so. Thats this is exactly what ive been saying for a few years now if you keep printing trillions and trillions of dollars and you dont allow it to go into wages you cut them off you you you you you vilify the working person and you just give it to private equity speculators youre going to end up with this enormous bifurcation in the economy of extraordinarily wealthy plutocrats and kleptocrats and surf the surf class the losers the deplorable i might add that is also a hedge funds hedge funds play a big part in the repo market thats where they go for funding and then 10 x. Leverage up into the markets so thats important because of course as i mentioned heres the feds Balance Sheet it had been declining it was down 8 percent on the year at one point for the 1st 3 quarters of 2. Money 19. 00 it ended the year up 2 percent the feds Balance Sheet so those a huge turnaround thats the v. Shaped recovery so ill match that to this tweet here feynman market cap has hit fresh all time high 5. 00 trillion which is almost equal to the combined g. D. P. Of france and u. K. As big tech keeps rattling fame in our facebook apple netflix and google so if you look at those chart thats the surge in the feds Balance Sheet theyre printing money and thats the surge in the famine shares at their so its going lockstep so to put this in perspective though on a global basis there was never any diminishment of money printing so the fed was down maybe 678 percent at one point over year over year the trend was extraordinarily expanse of maybe a couple of quarters down but globally its never gone down any at any months the its never gone down so the global printing by all the globes major Central Banks has gone on on this hyperbolic increase which has led to a 38 year bond market rally which is unprecedented and unreasonable and is dangerous for any economy to have that kind of a misallocation and the trickles down to the bank stocks in the franc stocks our momentum stocks the you know this disorder in overvalued group 5 years ago 4 years ago 3 years ago 2 years ago one year ago one month ago last week it will be in overvalued group in 6 months i cant get more overvalued because the ratio of at nasdaq to s. And p. 500 was almost twice as high in 2000 during the dot com bubble so those valuations can continue to rise so dont fight the fed and dont fight Warren Buffett i might add because Warren Buffett might be even bigger than the fed remember he poured. Into apple early in 2019 well this is a tweet about the biggest Largest Company in the world well i guess and around saudi aramco is now the biggest but apple is the biggest corporation in america in case you missed that apple is up over 80 percent and 21000. 00 as best year in a decade largest traded company added 530000000000. 00 in market value this year more than the market cap of all 5 comparables in s. And p. 500. 00 twice the market value of intel so thats the price rise in apple and 21000. 00 and of course right now the big loser of that well as carl icahn you know carl icahn was sold to Warren Buffett around 14150. 00 a share sound close to 300. 00 so its a double since carl icahn and he sold it because he thought it was overvalued the market was overvalued he told everyone to get out of the market he stopped managing private money he only manages like this huge Family Office fun so hes been dead wrong i mean theres a multibillionaire theres generally been right going back to the eightys he was part of the the mike milken crowd of the 1980 s. Who were given extraordinarily huge tax breaks and free money as you had the s. And l. Crisis and then the Drexel Burnham crisis but hes been dead wrong you know with Apple Computer it started off at a very low valuation remember back in the late ninetys when it was at less than 10. 00 a share adjusted for splits michael dell of Dell Computer recommended that steve jobs quit the computer business in that he was no good at it and nobody wanted to buy the stock under 20 bucks now everybody wants to buy the stock at 1. 00 trillion dollars valuation you know its its contrarianism versus the blindingly obvious you know Warren Buffett pursues the blindingly obvious every a lot of people are like hedge funds are contrary and tend to underperform even a simple vanguard type s. And p. The tracking fund well were going to look at a chart of apple going back 39 years this is it right here is the dot com bubble little tiny blip down there this is the 2008 crash and as you see its gone hyperbolic since then the fed money printing has done well for them i guess also the powerful state department introducing intellectual property laws and things like that around the world has done well but its hard to see on this chart but its definitely going parabolic this year based on that long term 39 year chart right you know going back to the late ninetys and early 2000 apple was a really hated company because it had lost a lot of people a lot of money after the heyday gone public and then steve jobs left the company if you recall in the stock was underperformer and people really hated it so as a result you know apple just now on a price earnings multiple is just now becoming closer to the market average on a p. C. Ratio its not overextended like back in the dot com days these Tech Companies are nasdaq or netflix for example or the other frank stocks are trading at 70880120 times earnings or 200. 00 times earnings astronomical price earnings multiple the case of apple theyre just trading at a market multiple i believe last i checked its somewhere around 20 up from you know 2 years ago it was 10 or 12 which is extraordinary so you mentioned carl icahn and you mentioned that he had said it was overvalued and of course a lot of these things are overvalued based on historical metrics but history never had negative Interest Rates they never had such activist Central Banks i mean Central Banks are pretty new and on a Global Situation in the United States i got ours in 1913 and of course bank of england has been around for a while but we were on everybody was on a Gold Standard back then so we havent had that sort of interim interventionist center. Bank policy as we see now were going to get into another chart about that another statement about Central Banks but of course Warren Buffett also he does have a match the one metric he looks at to determine whether or not markets are in a bubble as he said if market cap equals 100 percent of g. D. P. Thats what he said he decides to sell and that has happened in the last month of 21000. 00 that happened i think it started out december at like 85 percent and that it was like surge so hard into this into the end of december that it hit 100 percent so heres a tweet from karl can tell a feds Balance Sheet continues its epic rise up by an average of 101500000000. 00 per month since september compared to 80000000000. 00 per month during q e 3 quote its hard not to imagine this influence on stock prices as long as Interest Rates are near 0 it doesnt matter could be 2030 trillion dollars on the Balance Sheet heres a thought experiment and a bit of a prediction for 2020 going back to saudi aramco around co as it went public just recently at a market valuation an excess of 1. 00 trillion dollars i think a one point was worth 2 trillion dollars i think that were going to see them make a hostile buy of a Company Maybe facebook for example and it could be the 1st trillion dollar hostile raid in history because theyve got the Balance Sheet now if youve got a 2 trillion dollars Balance Sheet that means youve got you know the ability to borrow another trillion so youve got a 3 trillion dollar war chest if you go after an apple or even a Berkshire Hathaway 5 or 600000000000 dollars so i went inside go buy Berkshire Hathaway just as a hostile rate and then they own a huge portion of the whole Global Market the American Market why not theyve got the Balance Sheet now they want to diversify away from oil and gas and i think were going to see a move like that the next 6 to 9 months well i do believe. That we could see a doubling like we did in the end of the parabolic move because member Alan Greenspan had warned that the markets were displaying irrational exuberance he said that in 97 we continue on for 2 more years 1909 as a going to be 85 percent we only went up 40 percent and 21000. 00 if this is exuberance and you know the Retail Investor wasnt really participating in 29 everybody hated it everybody was like dissing even big names like carl icahn everybody was out so this could be the year that its in and that ties to this final headline Nobel Laureate economist praises truong for stock market rally he creates animal spirits Nobel Laureate for economics Robert Shiller sees President Donald Trump as the primary cause of wall streets recent strength because he stoking the markets animal spirits schiller a woman nobel prize in 2013 chillers newly found praise for trump is a huge turnaround from the point of view he held back in january of 2018 when he said in an interview he would give trump a grade of one or 2 out of 10 when it comes to Economic Policy he said he didnt vote for trump in 2016 but he thinks hell win in 2020 right schiller agrees with me and ive said for 3 years now that a trump instills confidence in people the American Economy is 70 percent consumer and you have thats a key component of barack obama never get no one gave anyone any confidence to do anything everyone looked at barack obama and his presidency and his policies and they were like i think ill wait for somebody like a trump ok dont take a break and when we come back much more coming your way. In a world a big part of the. Conspiracy its time. To do. Deeper to hit the stories that made stream media refuses to tell more than ever we need to be smarter we need to stop slamming the door on the back and shouting past each other its time for Critical Thinking its time to fight for the middle for the troops the time is now were watching closely watching the hawks. So what weve got to do is identify the threats that we have its crazy to confront a shouldnt let it be an arms race based on often spearing Dramatic Development the only really im going to do exists i dont see how that strategy will be successful very critical time time to sit down and tom. Welcome back to the kaiser report time out of turn to stein author of planet ponzi dot com bitch welcome back great to be here for us in england so minutes lets get into this you know the markets are defying all who were looking for a pullback these last 2 or 3 years we seem to be heading to 30000 on the dow whats going on. Ill tell you max im pretty im pretty surprised actually you know we called it wrong this year and 1st to admit it you know the nasdaq is up close to 40 percent its year what we have an all time highs for the decade weve got stocks bonds property credit markets it debt markets corporate debt stock buybacks c. E. O. Lows valuations we are all time highs on central bank johnny elation and i think if thats the story we also have new lows which are Interest Rates at historic 600 year lows trust in our Government Trust in big tech space both twitter google politicians media the government the f. B. I. N. S. A. Congress all new lows so the next decade going to be a ripper were going to see the next decade massive amounts of opportunity that will make the 40 percent gain nasdaq look small i think were talking about a big correction that well see in the distortions that the Central Banks that put forward for the last 10 years during the next 10 years 2020 is going to be a real economy of the next decade and a turnaround for where markets are going going on central bank magic in the i guess youd have to make the comparison to 1999 i. Was very involved in the dot com era at that time you were managing money you observed it 1st hand it is it similar to 1999 yeah the nasdaq was up 80 something percent that air Alan Greenspan had in 1906 a warned of irrational exuberance that then went on to catapult higher yeah the i. P. O. s that were being launched at a 50 to 60 percent 1st day pop if you remember that was the big thing i remember when i was at the hollywood stock i say we were about to go public a barrister and Barbara Streisand was calling me asking to get stock in the i. P. O. You know things are crazy is it similar to 99 which i mean its similar to 1999 only 19991929 max i think the valuations are in the stratosphere. On the metric that no university uses. That iroh all time historic highs only have we didnt have in 1990 are so many 1000000000. 00. Or. And. Dollar unicorns the. Dollar. Amount of the files that. Amazon. And apple are the valuations that are a little bit ridiculous right now but they keep or not they will not mean for the sad fact that. The European Central bank. Has been buying. And is buying them hand over fist the Swiss National bank and over for me its just a matter of time before the fed starts buying equity. I think that it will see more clearly i think they have no other chance but to think for the markets theyve proven. Markets. In the stratosphere the problem is were still doesnt know what it. Is its a problem as i said for a couple hours its impossible to hit the top of a bubble and you can tell were going to probably have. 13000000000. 00 and then we are yet to make a profit. And have a. Seat at an all time high making a valuation or test i think theres something in the world. Thats not over the outs. And is finding out with. The Big Technology in those battles. And frankly it needs rare earth metals so those metals not come from china i doubt china is going to be very helpful in for moti American Companies over their own. Force everybody is getting into the game with the east now so. I think we will come forward and in school. In russia. And i am. For to signal to the maps the best are within the test drive my test which is not the best way out there on the market in this case it was the millennial so far on their robinhood stock app that were right theyve been buying tesla for the last 3 or 4 years and the stock just man a new all time high that professionals were shorting it and now theres a shared shorts quasar mascot kind of a thought exercise there because in an era now where the rumor is that black rock and blackstone are going to merge to create a multitrillion Dollar Financial buy a myth and have got a ramp go saudi aramco went public as thou got in a 1. 00 trillion dollars valuation my is my thought exercise is it possible that around cow could do a hostile raid of a company like a facebook and at a trillion dollar take out well we say potentially the 1st trillion dollar deal as a hostile deal that is out of possibility you know if they want to diversify why not met each well i think. Trade as you saw a stock drop this is you know i was very skeptical about the valuation when i as i was very skeptical about we were at 57. 7000000000 and i think i said it time last januarys that work was a ponzi scheme we were turned out of the funds geyser and announced well i dont know why its a soft and asian fund going back to. I dont think thats an apple that i think. Another oil company. Him out was such a while valuation and it. Now 100000000000. 00. After or something and i think. Ridiculous especially with transparency in. Financial. I think. All the. Negative. Trillion dollars in negative debt now. You know could never guarantee what i feel. Is the body where it was negative you want and hope that the maturity in those months now were going to change would come with the pension fund is we should not allowed to buy an instrument a lot will last for the answer and this is just exploitation and its its one from saver for savers. Were going to fund many of its own and you know this is. The next ok oh its going to blow up and its not the end well i think it is this isnt the version weve. Added it is around the world you see the civil unrest thats on. You know on on the all over the world civil unless we sense that the reduced wealth in the Central Bank Actions reciprocated by lowering Interest Rates and hundreds of trillions of dollars into part of its credit which is now thats a bad day losing money on a negative Interest Rate bond of course you can still use them for collateral and f. All the Central Banks are captured as they are and you can invest in a carry trade where youre going to end up with a positive carry because you essentially have own all the Central Banks and the Central Banks are private corporations are not government to situations you know they can see how people would be abusing that market now mick you are right however about the fact that you cant taper a ponzi scheme as the fed tried it and then the fed lost trying to do it after cutting its Balance Sheet by 8 percent for the 1st 3 quarters the fed ended up in the air up 2 percent on the on the Balance Sheet meaning the fed is that when the money printing spray not that the rest the world ever stop printing money but the fed actually put some lip service to tapering upon say for a few months they failed they went right back in the money printing so. I would assume your thought there is that thats only going to continue i think what weve got to look at is where our Interest Rates in the millennial generation are trading now and all the issues that are trading that they dont understand what the function of Interest Rates delineate whats your investment should be so if there was an Interest Rate that assumes that the fret at risk this era and junk trade is where tripoli which way the markets are totally distorted in every possible aspect ive never seen it. And it is ago its in the 20 years that somebody suggested this in a. Straight jacket. Now the problem its not with the hundreds of trillions of dollars of negative movie its thats. Not more that insist rate. Which is an increase of the increase of the reason washington states around the world are its over poor lows because if they go up. Hartwell still wont be able to service the debt so the interest will be hungered reduced to find a new tool to suki the phone once you know. What yeah i get it i get that all scenario which weve been talking about for 4 or 5 years and meanwhile the deals get keep getting bigger and bigger so if you have a half a trillion or one trillion dollar hostile raid thatll perpetuate this ponzi scheme and less like what he out there to be investing in and the scarcity value of equity goes up because all of its becoming private equity. And i think were just about out of time but misfires stein were going to keep you over for a 2nd segment because we love to pick your brain and find out what your insights are thanks for being on the kaiser report wants not to fall into the nexus and thats going to do it for this edition of kaiser report with me max kaiser and Stacy Everett like to thank our guest mitch firesign a plan apology dot com which want to reach us on twitter its kaiser report until next time by elf. Oh. Its. So. And very well now can see you are watching us and see us. But esquus its physics is nothing but the harmony who can create our vibrating strings for his chemistry chemistry is the melody the melodies you can play on strings what is the universe the universe is a symphony of strains. If you want to know what still would oldest d. D. A little story give it back to our tired rails a bit curious what you need to analyze it to gauge what a pot of soup you speak of my life goal whether they like it or not i got past the bits baldly what the police tell me and the book how free to be able to still haunted this world but now you know it opened up a bit opened up to start to put. Greetings and salutations music life
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