Stock Market Bubble, Bubble Everything

Most investors and traders believe there is a stock market bubble right now but in a new Keiser Report (link above) Max Keiser makes a powerful argument that everything is in a bubble. The economics of supply and demand are not what’s driving the market higher.

Stock Market Bubble

Central banks bought $15 trillion worth of bad assets from banks to keep the stock market bubble alive. Central banks could continue buying bad debt from banks and keep pushing the stock market higher. This is why we have real estate bubbles in countries around the world.

Too many auto loan defaults? The central bank will just come in and start buying up those bad auto loans.

What about the FANG stocks on Wall Street. Facebook, Apple, Netflix, and Google. These stocks can double again because there’s no accountability. If you can collateralize a bubble and sell it to pension funds with the help of Goldman Sachs, and there’s no law against it, then the economics of supply and demand is meaningless. There is no real price discovery. The entire market is based not on economics but on derivatives of derivative packages that are sold to pension funds.

Check out the Max Keiser report:

Bitcoin Value Surging Higher After Britain Offers Pension Funds Access

Bitcoin value is rising fast after Britain’s largest online trading platform, Hargreaves Lansdown, allows its customers to invest in bitcoin, according to the Telegraph (link above).

There are so many amazing things going on that are raising bitcoin value.

Bitcoin Value Up On Swedish ETN

Hargreaves Landsown is providing this service via a Swedish based bitcoin ETN offered by XBT Provider. In other words, Sweden is moving fast to become a leader in the digital currency while back in the U.S., the SEC is busy blocking any type of BTC ETF or ETN on the grounds of transparency.

Hargreaves Lansdown customers can now buy BTC in their personal pension (Sipp) or a normal brokerage account. When did you ever think that you would see BTC being offered in a pension fund? Nice!

Disclosure: I’m long GBTC.

Saturday Night Show: Janet Yellen Rate Hike While Pension Plans Going Broke

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A weekly Saturday financial show that attempts to predict market direction for the week ahead by looking at a variety of fundamental and technical charts. This week’s show features commentary on Janet Yellen and the Federal Reserve’s strange timing of a rate hike, how Obama Administration diverted FNMA money and investors dividends into Affordable Care Act to keep it solvent, and the collapsing pension funds across America.

Terrifying US Pension Fund Charts

Pension funds in the US could be close to a collapse. There is an estimated $1.9 trillion shortfall in U.S. state and local pension funds because of low-interest rates and a sideways US stock market. Even stocks falling overseas is a problem for pension funds.

Credit Suisse published the chilling chart below on the funding gap at the largest 100 US pension funds.

Bloomberg writes

Pensions count on annual investment gains of more than 7 percent to cover much of the benefits that come due as workers retire. But public plans had a median increase of 1 percent for the year ended June 30, the smallest advance since 2009, when they lost 16.2 percent, according to the Wilshire Trust Universe Comparison Service.

Now it seems like there is a run on the Dallas Police and Fire Pension as employees try to claim benefits before the system becomes insolvent.

Pension funds are starting to drop hedge fund investments. Turn To 10 writes

Rhode Island plans to scale back its investments in hedge funds by more than $500 million over the next two years, and reallocate those funds to more traditional investments with lower fees.

Pension funds like Rhode Island are starting to be more defensive and are hunkering down. The problem though is that defensive US Treasury bonds mean way below 7 percent returns which means more shortfalls in funding are coming.

There’s no way pension funds can stay above water in an environment with low-interest rates and with equity markets at valuations that are sky high.

But wait, Democrats say everything is good, just look at consumer confidence that came out this week at 104.1.

consumer-confidence

There is massive offshoring of good paying US jobs, stagnant wages, soaring costs of health care and education, contraction in manufacturing, falling retail sales, and consumers pensions are dangerously close to collapse. Meanwhile, consumer confidence is hitting multi-year highs? Consumer confidence is starting to look like just another tool of public manipulation that’s out of touch with reality on the street.