CLASSIC 2014 POST SOMEONE SAW

Thursday, April 24, 2014

RE OVERSTREET

Apr. 24, 2014 8:52 AM ET  |  Includes: CRUD, DIA, DJP, GLD, GSG, IEF, OIL, QQQ, RJA, SPY, USO, UST

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Summary

• This market has all the characteristics of a strong bull: weak commodities, a wide yield curve spread, disinflation, P/E expansion, and counter-cyclical stock behavior.
• This market and the crisis that preceded it is often compared to the Depression, but a far better comparison is the Roaring Twenties and the 1921 crisis.
• That leaves us with three difficult questions to answer: when will this bull market end, what will the aftermath look like (Depression? Stagflation?), and do we have any policy alternatives?
• The market will probably grow for a few more years, and the aftermath will probably be pretty grim, as our understanding of market forces has barely progressed since 1929.

I HAVE ANSWERS FOR HIS QUESTIONS:
When will this bull market end?

1. Sooner than you think.

What will the aftermath look like (Depression? Stagflation?)
2. Both.

Do we have any policy alternatives?
3. No.