Friday, September 26, 2014

Today we learned something about another market commentator



Reformed Borker (Bork Bork Bork!) - Peter Boockvar on the market. I'm only linking to this because it's provided us with a great little piece of information that we need to keep in mind from now on:

My friend Peter Boockvar is not a fan of unconventional policies at the Fed to boost the economy. He’s also been a critic of the way QE has artificially boosted the stock market.

QE "artificially" boosted the stock market, Josh? How's that?

Here are the ways I can see QE "artificially boosted the stock market":

1. by forcing the economy out of an economic depression that would have otherwise kept the S&P below 800 for a decade;

2. by reducing rates in an attempt to stimulate growth and reduce unemployment, again out of fucking economic depression levels;

3. in the case of asset purchases, mopping enough disastrous paper that money could flow back into the economy instead of spending the next twenty fucking years repairing the balance sheets of all the banks;

4. by giving market participants enough hope so that now, six fucking years later for the love of Christ, the S&P finally has an 18x multiple on 12-month trailing earnings; or,

5. wharrgarbl.

The first 3 points, if you don't get it, are ways that QE boosted the fundamentals that underpin the economy. The fourth is the way that QE corrected the hyperbearish doomster psychosis that took hold for years after we were threatened with bank runs and tanks in the streets.

None of them are ways that QE "articifially" boosted the stock market - unless you believe that earnings are a lie, or that a P/E of 18 is unreasonable for a bull market that's just got going.

Point 5, however, is the assumption that earnings are a lie, or that a bull market S&P index should trade at a P/E of 12 or less; or that gold is money, that the US dollar is worthless, that Obama is a gay muslim atheist, or anything else with no basis in reality.

It seems Boockvar believes #5.

If you also do, Josh, then you know fuck all about economics, and it's a damn good thing that Ben Bernanke was in charge the last few years instead of someone like you.

So thanks, Josh: I'll ignore anything out of the mouth of Peter Boockvar from now on.

I strongly suggest you read the last 5 years of Paul Krugman's blog to give yourself a bit of a fucking education. Because he's been right continually, and right by using a theoretical model that has evidence to back it up, while all your idiot Wall Street buddies have been wrong.


No comments:

Post a Comment