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. Surf the surf class the losers the poor bulls 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 Sheets have been declining it was down 8 percent on the year at one point for the 1st 3 quarters of 2019 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 of fresh all time high 5. 249 trillion which is almost equal to the combined g. D. P. Of france and u. K. As big tech keeps rolling 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 theyre 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 of 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 misallocation and the trickles down to the bank stocks in the franc stocks are momentum stocks the you know this discipline overvalued group 5 years ago 4 years ago 3 years ago 2 years ago one year ago one month ago last. Week italy and 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 i am co 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 is 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 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 buffet at 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 some 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 less than 10. 00 a share adjusted for splits michael dell a 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. 00 now everybody wants to buy the stock at 1. 00 trillion dollars valuation you know its its a contrarian ism 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. 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 their 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 a 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 you have these Tech Companies are nasdaq are netflix for example or the other frank stocks are trading at 70810120 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 and the Central Banks are pretty new and on a Global Situation the United States 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 Central 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 metric 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 when 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 december 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 as it went public just recently at a market valuation and excess of 1. 00 trillion dollars i think the one point was toward 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 of 5 or 600000000000. 00 so i work inside go by 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. 00 everybody hated it everybody was they 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 no i think ill wait for somebody like a trump ok im going. Take a break and when we come back much more coming you know what. So what weve got to do is identify the threats that we have its crazy confrontation let it be an arms race is on the off and spearing Dramatic Development the only posts really im going to resist i dont see how that strategy will be successful very critical time time to sit down and talk. Good food descriptions sound up the even for the owners so how to choose his pet Food Industry is telling us what to feed our pets really more based on what they want to sell us then was necessarily good for the pet. Food may not be associated as people believe we have animals that have you know diabetes in arthritis they have auto immune disorders theyve got allergies we are actually creating these problems and its a huge epidemic of problems all of them i believe can be linked to very simple problem of diet and some dog owners so heartbreaking stories about their pets streets the larger corporations are not very interested in proving or disproving the value of their food because theyre already making it a 1000000000. 00 on it and theres no reason to do that research. And were going to fulfill the repeated purposes of politics to the people i promise to be you know weve all pots. Pretty rough. Now you want to work correct that. No. Be cut cut cut. Cut cut cut cut cut link up. Or. A. Welcome back to the kaiser report time out of turn to mitch stein author of planet ponzi dot com bitch welcome back great to be here for us in england so 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 im 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 big debt markets corporate debt stock buybacks c. E. O. Lows valuations we are all time highs on central bank g. D. P. Elation and i think if thats the story we also have the new lows which are Interest Rates at historic 600 year lows trust in our Government Trust in big tech space book 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 key guinea 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 1990 my 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. Greenspan had in 1906 and warned of irrational exuberance and 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 Exchange 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 1991929 max i think the valuations are in the stratosphere. On the metric that you know university uses. All time historic highs only have to 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 it is free for the sad fact that. The European Central bank. Has been buying it. 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 for the 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 doesnt know what it. Is its a problem as ive said for a couple hours its impossible that it would stop a bubble and you can tell were going to probably have. 13000000000. 00 and were still yet to make a profit. And have a. Seat at an all time high making the valuation of test i think the. Auto companies in the world. Moving cars and. Its not over the outs. And it is finding out with their move. The Big Technology in those vehicles is the battles. And frankly 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 movies. Force everybody is getting into the game with the east now so thats what i think will come. 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 in the best aramark 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 the 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 a stab in a 1. 00 trillion dollar valuation my as i thought exercise is it possible that around cow could do a hostile raid of a company like a facebook and add a trillion dollar takeout well we say potentially the 1st trillion dollar deal as a hostile deal that is that a possibility you know if they want to diversify why not met each well i think. Trade as you saw the stock drop this is you know i was very skeptical about the valuation when i poor as i was very skeptical about newarks valuation at 57. 7000000000 and i think i said it time last januarys that work was a ponzi scheme and we were turned out to be on those guys or in and out well i dont know why it took down soft and easy and fun going back to. I dont think thats an apple that i think well see another oil company. Him out in such a while valuation and it. Down to about 100000000000. 00. After or something and i think i think ridiculous especially with the lack of transparency you know ram financial. I think people are chasing. All these. Negative. Trillion dollars in negative debt now. You know could never guarantee what i feel. Is the body is negative you want and hope that the maturity in those months now were going to change 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 win from saver for savers to the bank were going to fund many of its own and you know this is. The next ok oh its going to blow. On and be all over the world civil unless we sense that the reduced wealth in the Central Bank Actions were superheated by lowering Interest Rates and hundreds of trillions of dollars into. 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 institutions you know they can see how people would be abusing that market now mitt you are right however about the fact that you can 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 of 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 were going to look at is why are Interest Rates and the millennial generation are trading now. All that. Trading that they dont understand is a function of Interest Rates. And traders where tripoli which we. Are totally distorted in every possible ask. If. Jacket. Now. Thats not hundreds of dollars of negative debt its thats. Not. The reason why Interest Rates around the world are its lows because if they go up. Will still be able to service it so that interest will be hungry to find a new tool to suki the phone once you know. What yeah i get it i get that whole 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 cars report. Not to fall into the excess and thats going to do it for this edition of kaiser report with me max kaiser and Stacey Everett like to thank our guest mitch firesign a plan apology dot com want to reach us on twitter its kaiser report until next time by. The by the but if he when you post the budget and i do the dishes at the bottom or the g. s and you speech and you see me we need to you. About that come up and when you die g. P. S. Will be home and he knew that he dies with an infantry ball. A lot of people see slowing as it fights about to try to both harden. But as you get instant. Sheriff as if archer. Is very. Biased. Here in chief if you will that cabinet 5 days doing it. In english 38 for people who simply do so in new. England in total. Time after time corporations repeat the same mantra sustainability very important. Transition to sustainable transport sustainability stay number man on a more equitable and sustainable world. They claim their production is completely hamas. Because. Companies want us to feel good about buying their products while the damage is being done far away and this is something this must be done to anyone and i mean look. This is the mills i mean listen we didnt do nieminen and. Understood so when in. Israel media a reflection of reality. In a world transformed. What will make you feel safe. High salacious community. Are you going the right way or are you being led so. What is truth what is faith. In the world corrupted you need to descend. To join us in the depths. Maybe in the shallows. That was. Nothing new to. Iran classifies the u. S. Armed forces other terrorist organization in response to the killing of tehrans Top Commander that as huge crowds gathered for the funeral of Kasim Soleimani meanwhile u. S. House Speaker Nancy Pelosi announces a resolution because of Donald Trumps ability to attack a broad even though similar restriction was removed from the defense bill passed by Congress Last month. Putin meets the syrian president in damascus in the middle east braces for further instability. On the new gangster film the gentleman farts a debate over racism and censorship give us the use. We can tell you some of the most. Disgusting racist lot
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