YOU SAW IT HERE FIRST ! How S&P500 has changed, and when it will crash.

talking about the SP500, Wallstreet and the Fed, I KNOW YOU MIGHT THINK : another guy talking about this, none of my business. But guess what? You better know how this whole wallstreet thing is going, because it determens a big chunk of your future.

In my last post I worked out how the SP500 would never go over it’s latest high, we were moving in to a Bear market. Boy was i wrong! In short, it fell 19% and popped up again. Yesterday it went into new highs. This is impossible to explain with conventional approaches of P/E ratios or even credit-cycle theories. By the way this statistic sums up where the credit cycle is at:

us-economy-10-5

So it makes me think , how is this possible?

HERE IS MY EXPLANATION:

This is the chart that most people look at to ask themselves:  where is the market going?:

and I added the type of market…

S_and_P_500_chart_1950_to_2016_with_averages2

It turns out the people behind the chart have changed…. Back in the good old days it were you and me in the stockmarket, people, investing. Today this has changed. People still invest in the market but their share has dropped dramatically. Today over 80% of the stockmarket is owned by fund, hedge funds, asset managers  and the extreemly rich.

Today the people who own the stockmarket don’t NEED the money. Its not like in the old days people got scared, and sold out . NO . Not today. Today these rich funds think like algorithms, cold blooded rational thinking that goes like this: ” I keep investing in the stock exchange as long as it makes me more money than the interest on a saving account”.  I wrote it in bold, because this is how algorithms think, I bet in 10 years time people read this thinking “how did he figure this out?” .

So this brings us to :

where is the S&P500 going? There are 2 options:

FIRST : and most likely: The FED (Federal Reserve) keeps printing money each time the market tends to collaps, just to keep the “captains of industry” happy,  pumping debt levels to insane highs. In the long run it will either make the dollar collapse, or more likely going into JAPAN-style stagnation for decades. In this scenario everything is happy-go-Lucky for some time, untill the stock exchange is valued at the same price as putting your money on a saving account ! Which is insane, giving the stock exchange is for owning a part of a business that fluctuates in valuation. This is the explanation why the SP500 just keeps going up today! You read it here first !

SECOND: The S&P500 collapses at the next presidential elections, in case my best friend Trump doesn’t get reelected. However anoying this may be : politics. Its seems most VERY rich people and fund managers in the US don’t realise they live in a democracy. Democracy can suddenly elect someone who slams on a 70% wealth taxs on anyone it wants to…

happy times ahead…

 

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