15 Signs That We Are Near The Peak Of An Absolutely Massive Stock Market Bubble

One of the men that won the Nobel Prize for economics this year says that "bubbles look like this" and that he is "most worried about the boom in the U.S. stock market."  But you don't have to be a Nobel Prize winner to see what is happening.  It should be glaringly apparent to anyone with half a brain.  The financial markets have been soaring while the overall economy has been stagnating.  

Reckless injections of liquidity into the financial system by the Federal Reserve have pumped up stock prices to ridiculous extremes, and people are becoming concerned.  In fact, Google searches for the term "stock bubble" are now at the highest level that we have seen since November 2007.  

Despite assurances from the mainstream media and the Federal Reserve that everything is just fine, many Americans are beginning to realize that we have seen this movie before.  We saw it during the dotcom bubble, and we saw it during the lead up to the horrible financial crisis of 2008.  

So precisely when will the bubble burst this time?  Nobody knows for sure, but without a doubt this irrational financial bubble will burst at some point.  Remember, a bubble is always the biggest right before it bursts, and the following are 15 signs that we are near the peak of an absolutely massive stock market bubble...

#1 Bob Shiller, one of the winners of this year's Nobel Prize for economics, says that "bubbles look like this" and that he is "most worried about the boom in the U.S. stock market."

#2 The total amount of margin debt has risen by 50 percent since January 2012 and it is now at the highest level ever recorded.  The last two times that margin debt skyrocketed like this were just before the bursting of the dotcom bubble in 2000 and just before the financial crisis of 2008.  When this house of cards comes crashing down, things are going to get very messy...

"When the tablecloth gets pulled out from under the place settings, you're going to have a lot of them crash and smash on the floor," said Uri Landesman, president of Platinum Partners hedge fund. "That margin's going to get pulled and everyone's going to have to cover. That's when you get really serious corrections."

#3 Since the bottom of the market in 2009, the Dow has jumped 143 percent, the S&P 500 is up 165 percent and the Nasdaq has risen an astounding 213 percent.  This does not reflect economic reality in any way, shape or form.

#4 Market research firm TrimTabs says that the S&P 500 is "very overpriced" right now.

#5 Marc Faber recently told CNBC that "we are in a gigantic speculative bubble".

#6 In the United States, Google searches for the term "stock bubble" are at the highest level that we have seen since November 2007 - just before the last stock market crash.

#7 Price to earnings ratios are very high right now...

The Dow was trading at 17.8 times the past four quarters of earnings of its 30 components, according to The Wall Street Journal on Friday. That was up from 13.7 times its earnings a year ago. The S&P 500 is trading at 18.7 times earnings. The Nasdaq-100 Index is trading at 21.5 times earnings. At the very least, the ratios are signaling that stock prices are rich.

#8 According to CNBC, Pinterest is currently valued at more than 3 billion dollars even though it has never earned a profit.

#9 Twitter is a seven-year-old company that has never made a profit.  It actually lost 64.6 million dollars last quarter.  But according to the financial markets it is currently worth about 22 billion dollars.

#10 Right now, Facebook is trading at a valuation that is equivalent to approximately 100 years of earnings, and it is currently supposedly worth about 115 billion dollars.

#11 Howard Marks of Oaktree Capital recently stated that he believes that "markets are riskier than at any time since the depths of the 2008/9 crisis".

#12 As Graham Summers recently noted, retail investors are buying stocks at a level not seen since the peak of the dotcom bubble back in 2000.

#13 David Stockman, a former director of the Office of Management and Budget under President Ronald Reagan, believes that this financial bubble is going to end very badly...

"We have a massive bubble everywhere, from Japan, to China, Europe, to the UK.  As a result of this, I think world financial markets are extremely dangerous, unstable, and subject to serious trouble and dislocation in the future."

#14 Bob Janjuah of Nomura Securities believes that there "could be a 25% to 50% sell off in global stock markets" over the next couple of years.

#15 According to Tyler Durden of Zero Hedge, the U.S. stock market is repeating a pattern that we have seen many times before.  According to him, we are experiencing "a well-defined syndrome of 'overvalued, overbought, overbullish, rising-yield' conditions that has appeared exclusively at speculative market peaks – including (exhaustively) 1929, 1972, 1987, 2000, 2007, 2011 (before a market loss of nearly 20% that was truncated by investor faith in a new round of monetary easing), and at three points in 2013: February, May, and today."

As I mentioned at the top of this article, this stock market bubble has been fueled by quantitative easing.  Easy money from the Fed has been artificially inflating stock prices, and this has greatly benefited a very small percentage of the U.S. population.  In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.

When this stock market bubble does burst, those wealthy Americans are going to be in for a tremendous amount of pain.

But there are some people out there that argue that what we are witnessing is not a stock market bubble at all.  That includes Janet Yellen, the new head of the Federal Reserve.  Recently, she insistedthat there is absolutely nothing to be worried about...

"Stock prices have risen pretty robustly," Yellen said. "But I think that if you look at traditional valuation measures, you would not see stock prices in territory that suggests bubble-like conditions."

We shall see who was right and who was wrong.  Let's all file that one away and come back to it in a few years.

So where are stocks going next?

If you had the answer to that question, you could probably make a lot of money.

Yes, the current bubble could burst at any moment, or stocks could continue going up for a little while longer.

After all, the S&P 500 has risen in December about 80 percent of the time over the past thirty years.

Perhaps that will be the case this December as well.

Perhaps not.

Do you feel lucky?

Credit to Economic Collapse

Fukushima? 5 Million Seabirds Estimated to Have Died on the Beaches of Australia and New Zealand

Reports are coming out that unusually high counts of dead seabirds are winding up on shores in Australia and New Zealand. All the birds that have been tested by vets so far were found to be starving and emaciated.

One theory is insufficient predatory fish to herd baitfish inland for the birds to feed on, but as YouTuber Pinksapphiret2 asks at the end of her video report below, “Is it a lack of baitfish or is it radiation?”

Or is the radiation ultimately causing the lack of baitfish?

The video’s narrator is surely referring to the crippled Fukushima Daiichi Nuclear Power Plant on the coast of Japan which still spills 400 tons of irradiated groundwater a day, every day, into the Pacific Ocean and has since it was struck by an earthquake and subsequent tsunami in March 2011.

While the mainstream media continues to play off the Fukushima disaster and the Japanese government and mostly government-owned TEPCO, the power company which owns the plant, continue to reassure everyone that everything is under control and the irradiated water is just hanging out in the bay in front of the plant (the most absurdly unbelievable story maybe in the history of ever), it would seem we are all somehow supposed to believe that the ocean is basically a giant Mr. Clean Magic Eraser for all of this radiation and that it will not have any real or far-reaching consequences on the delicate balance of the biosphere.

We are supposed to believe this and go back to whatever it was we were doing, even as more and more reports of radiation-tainted wildlife, contaminated foodstuffs and mass animal illnesses and die-offs surrounding Pacific coastal areas continue to be reported seemingly every other day.

If the questions above were asked of Yachtsman Ivan Macfadyen, who sailed from Melbourne to Osaka and then on to San Francisco earlier this year and noted how quiet the ocean was most of the voyage due to the lack of seabirds, he would straight up answer “The ocean is broken”.


Credit to Activist Post

Why It's Going To Be A Whole Lot Worse Than In The 1930s

As Mike Maloney forecast in the mid-2000s, the roller-coaster ride continues in world markets and economies. His - so far - spot on projection that "first the threat of deflation (1), followed by a helicopter drop (2), followed by big reflation (3), followed by a real deflation (4), and then followed by hyperinflation (5)," appears to be rotating from stage 3 to stage 4 (as we noted here). However, as Maloney explains in this brief clip, while we have seen great deflations before, in the '30s one-third of the monetary base was backed by gold, now we virtually nothing as "people do not understand the scale of the emergency that's going on right now."

Five brief minutes on a Sunday... watch!

Credit to Zero Hedge

Enough enriched uranium in Iran for 4 nuclear weapons

Saudi King Abdullah and Israeli Prime Minister Binyamin Netanyahu were not won over by President Barack Obama's pledges in personal phone calls to the two Middle East leaders last week not to allow Iran to acquire a nuclear weapon. Their skepticism only grew.

This development in the Iranian nuclear controversy finds two of the three leaders trapped in a credibility gap between their public pronouncements and the Iranian reality which has long overtaken them both.

Obama’s oft-repeated pledge is canceled out by most Western nuclear experts, who are convinced that Iran managed to advance to a capacity for producing four nuclear bombs, under cover of protracted diplomacy. In their view, the current first-step deal, followed by a comprehensive accord in six months' time, are merely an attempt by the six world powers to hold Iran back from expanding its arsenal any further.

The US president’s avowals are therefore hollow.

Saudi princes and officials have often said that if Iran acquires a nuclear weapon or reaches the threshold of this capacity, the oil kingdom will not lag behind.

All Riyadh needs to do now, say DEBKAfile’s Middle East sources, is to invoke the agreement signed with Islamabad in 2004, under which Saudi funding was provided for Pakistan’s nuclear bomb program in return for some of the bombs or warheads produced to await Saudi Arabia’s call for their delivery, complete with the appropriate missiles.
Pakistan denies the existence of this transaction.

However, military and intelligence experts in the West are certain that although this transfer has not yet taken place, it will soon, in the light of the edge Iran has gained in its current negotiations with the West.

Therefore, Obama’s phone conversation with Abdullah was more concerned with keeping a nuclear bomb out of Saudi hands than out of Iran’s.

Since 2008, the Israeli prime minister has vowed time and time again to prevent Iran reaching a nuclear threshold, making it clear that the Israeli armed forces would be sent into action - if need be.

So his credibility deficit is on a par with Obama’s.

At the Western Wall, Thursday, Nov. 11, on Hanukkah eve, Binyamin Netanyahu paraphrased a popular festival song to declare: “We came to drive out the darkness and the largest darkness that threatens the world today is a nuclear Iran!”

What did he mean by those words, if not an intention to exercise Israel’s military option to “drive out the darkness?”

Maj. Gen. (res) Yakov Amidror – until recently National Security Adviser to the prime minister - wrote last week in The New York Times that Iran already has enough enriched uranium to make four bombs. “The Geneva deal, in short, did not address the nuclear threat at all,” he wrote

Iran reached that point more than a year ago, so how to take the repeated pledges by the prime minister to “act itself, by itself” to prevent this happening?

Prime Minister Netanyahu has carefully avoided presenting the Knesset or the people with a clear picture of where Israel stands in relation to Iran’s nuclear program, has never laid out his policy on the question or depicted what the future may hold.

And so his “military option” has progressively waned in credibility both at home and abroad.
In Obama’s phone call to Netanyahu, DEBKAfile’s intelligence and Washington sources report that the president described at length the US intelligence measures to be applied for verifying Iran’s compliance with the Geneva deal. He said that its findings would be referred to Israeli intelligence for a second assessment.

Obama also suggested a visit to Washington by an Israeli military intelligence delegation of nuclear experts to finalize the details of US-Israeli collaboration for verifying that Iran was living up to its commitments under the near accords.
When this US-Israeli dialogue reached their ears, the Iranians were furious. Thursday, Nov. 28, Foreign Minister Javad Zarif, dropping the genial mien he assumed in Geneva, reverted to harsh Islamic Republican-speak when he said: “Never such a thing will happen and definitely we will not be in the room in which representatives from the Zionist regime will have a presence!”

It was clear that Tehran would boycott the technical discussion on the details of the Geneva accord if Israeli experts were to sit in a side room, a proposal which might also be extended to Saudi Arabia, as the two Middle East nations most directly at risk from an Iranian nuclear capacity.

Then, Friday, President Hassan Rouhani weighed in to further devalue the Geneva accord’s international worth. In an interview with The Financial Times, he said Iran would never dismantle its atomic facilities. Asked whether this was a "red line" for the Islamic republic, Rouhani replied: "100 per cent."

In other words, not only Netanyahu but Obama too can forget about any hopes they may have entertained of Iran shutting down its Fordo enrichment plant, or holding up the construction of its heavy water plant in Arak for the production of plutonium.

Tuesday, Nov, 26, two days after the six powers signed their first-step nuclear accord with Iran, Netanyahu called the security cabinet into special session which went on into the night to hear and debate briefings from IDF intelligence (AMAN) officers.

No word has leaked from that session, but some sources claimed anonymously that the ministers received the most optimistic outlook they had heard in years.

Before giving weight to such possible optimism, DEBKAfile’s analysts recall AMAN’s 2011 prediction that Bashar Assad’s downfall was imminent, and its misreading of the situations prevailing in Washington and Tehran.

Credit to DEBKA File

Currency Suicide: Japan Experiencing The Ugly Effects Of Its Own Policy

Exactly a year ago, Japan announced its monstrous monetary stimulus, beating even Helicopter Bernanke who had just started its fourth round of QE. The Japanese government was fed up with deflation and decided to stimulate their economy with massive liquidity (QE).The Nikkei index started an historic rally with a gain of 50% in less than half a year (see barchart on the chart below). The value of the Yen dropped like a stone (see black line on the chart below). The aim of a weaker Yen was to stimulate exports. So it should have been a win-win-win situation, at least on paper.



We are lied to told every day again that weak currencies are a good thing as they stimulate export and increase the economic output (rising GDP). While that could be true, there are a lot of conditions and consequences that are associated with it. One condition, for instance, is that all other countries should keep the value of their currency flat, which is obviously not the case in Currency War III.

Patrick Barron explains how mainstream economists believe that currency devaluation exports unemployment to its trading partners, apart from enhancing sales from exports. “They call for their own countries to engage in reciprocal measures. Recently Martin Wolfe (Financial Times in London) and Paul Krugman (New York Times in the US) both accuse their countries’ trading partners of engaging in this “beggar-thy-neighbor” policy and recommend that England and the US respectively enter this so-called “currency war” with full monetary ammunition to further weaken the pound and the dollar.” This is no currency war, this is currency suicide. Source: Mises.org.

One of the consequences of Japan’s intended currency debasement is now starting to show its ugly head. The cheaper Yen may be intended to stimulate exports but it simultaneously makes imports more expensive.

From Japan Times:

Japan is likely to post a record trade deficit in fiscal 2013 because the weaker yen and soaring demand for energy have driven up the cost of importing fossil fuels, according to a projection by a trade business group.

The deficit is expected to expand to ¥12.1 trillion during the year through next March, much worse than the ¥8.18 trillion in fiscal 2012 and the largest since comparable data became available in fiscal 1979, the Japan Foreign Trade Council Inc. said Thursday.

The economy will log a trade deficit for the third straight year, according to the organization, which is composed of companies involved in international trade activities.

Exports in fiscal 2013 are forecast to rise 9.8 percent from the previous year to ¥70.18 trillion, sustained by the yen’s fall, while imports are expected to climb 14.1 percent to ¥82.28 trillion, JFTC said.

A sliding yen usually supports exports by making Japanese products cheaper abroad and boosts the value of overseas revenues in yen terms, but it also increases import prices. Japan depends on imports for more than 90 percent of its energy needs.

Unfortunately, the economy is not as simple as central planners pretend it to be, at least not in the 21st century. The globally interconnected world, the huge volumes of derivatives (currently tenfold the global GDP), the increasingly complex financial world, the “easy money” policies from competing regions … all play an almost unpredictable role. We have not seen to date a model from the academicians at the central banks taking those variables into account.
Speculative effect

The consequence in the real world of the weaker Yen is not only limited to more expensive imports. Another ugly effect is that the speculative effect kicks in, accelerating the “unintended consequences.” As the Yen got back into is declining trend, hedge funds took notice of this and are now betting on a continuing decline. As Zerohedge notes: “While ‘economists’ are less convinced that the JPY will weaken further, and even the Japanese officials somewhat jawboning the currency’s stability now, futures traders have pushed ‘net shorts’ (i.e. bets against the JPY) to their highest since July 2007. Between the possibility of a Fed taper (stronger USD) and fading economic gains (more BoJ QQE), it would appear that Japan’s $70bn per month buying program is not going to shrink anytime soon. While the world has grown accustomed in recent months to ‘hating’ gold – despite the ECB and BoJ rumors of more money-printing and an inevitable un-taper by the Fed – for now, the ‘dislike’ of the JPY has exploded.” Precious metals investors have learned in 2013 that a price crash is likely when hedge funds go aggressively short.





The message we are trying to bring across is not that a crash is inevitable and imminent. We point out that it is likely to happen and that these are consequences of interventions.

The sentiment indicators provide a confirmation of the ultra weak Yen. As the latest Sentimentrader report shows, the Yen carries the most negative sentiment of the major currencies.



Precious metals sentiment is not much better, but that is not surprising, at least not in the worst year for the metals since four decades.


Credit to Gold Silver Worlds

Netanyahu orders Mossad to find proof Iran violating nuclear accord

'Sunday Times' quotes Israeli defense sources as saying Jerusalem wants to discredit Geneva deal by finding evidence of Iranian duplicity.

Prime Minister Binyamin Netanyahu has ordered both the Mossad and Military Intelligence to search for evidence that Iran is continuing nuclear activities forbidden under the Geneva accord signed with world powers last week, The Sunday Times quoted Israeli defense sources as saying.

Proof that Iran was violating the terms of the six-month interim deal would complicate US President Barack Obama'spush to delay the passage of new congressional sanctionsagainst Iran while a long-term deal with Iran is being negotiated.

Prime Minister Binyamin Netanyahu has repeatedly said, both before and after the signing of the deal in Geneva, that the agreement does not sufficiently curb Iran's ability to obtain nuclear weapons and prematurely offers the Islamic Republic sanctions relief.

“Everyone has his own view regarding the Geneva agreement,” the Times quoted an Israeli intelligence source as saying. “But it is clear that if a smoking gun is produced, it will tumble like a house of cards.”

The Times quoted Israeli defense sources as saying that Israeli intelligence was seeking to uncover clandestine activity in three areas of Iran's nuclear program - hidden uranium enrichment sites, ballistic missiles and bomb design.

“Iran would not have invested such a fortune [estimated at $200 billion] if in the end it does not produce nuclear weapons and turn Iran into a regional superpower,” the paper quoted an Israeli official as saying.
Credit to Jerusalem Post

Iran Announces Development of Ballistic Missile Technology

A top Iranian military leader announced late Tuesday that Iran has developed “indigenous” ballistic missile technology, which could eventually allow it to fire a nuclear payload over great distances.

Brigadier General Hossein Salami, the lieutenant commander of Iran’s elite Islamic Revolutionary Guard Corps (IRGC), made the critical weapons announcement just days after Iran and the West signed a deal aimed at curbing the country’s nuclear activities.

Salami claimed that “Iran is among the only three world countries enjoying an indigenous ballistic missile technology,” according to the state-run Fars News Agency.

“Many countries may have access to cruise missiles technology, but when it comes to ballistic missiles, I am confident that only the U.S. and the [former] Soviet Union could master this technology, and now we can announce that we own this technology as well,” Salami told Fars.

The IRGC leader said that Iran is quickly developing advanced military know-how.

“While we did not have any knowledge about drones, we have developed and acquired drones that travel 2,000 kilometers, conduct their operations, and then land in our desirable regions,” he was quoted as saying.

Iran’s claim to ballistic missiles would be a major development for a country known to use its military machinery as a means of intimidating its regional neighbors.

Former U.S. Ambassador to the United Nations John Bolton said Iran’s ballistic missile announcement is no surprise.

“Iran’s ballistic missile program has always been to provide the delivery vehicles nor nuclear warheads,” Bolton said. “The timing of the IRGC announcement is no coincidence.”

As Iranian President Hassan Rouhani and other officials celebrate the recently announced nuclear accord, Tehran’s military leaders have adopted a harsh line on the West.

Another IRGC leader said on Tuesday that Americans only understand “the language of force.”

“The U.S. has double-standards towards social issues of nations and the language that Americans understands is the language of force,” General Ramezan Sharif, Head of the IRGC’s Public Relations Department, said on Tuesday.

U.S. power is growing weaker every year, he said.

“The pillars of the U.S. strength have become seriously shaky in the world, especially in the Middle-East,” according to Sharif.

Other Iranian military officials claim that Tehran no longer needs to import key weapons as they once did.

“Today, we are honored that we have been able to grow needless in the defense equipment sector with the help of our young scientists and thinkers and now we provide all the needs of the Armed Forces with the best quality,” Iranian Deputy Defense Minister Brigadier General Aboutaleb Shafaqat said on Tuesday.

In addition to installing a new air defense system reportedly capable of destroying high-altitude targets, the Iranians claim to have built a highly advanced unmanned drone that is capable of flying for 30 hours straight.

Former Pentagon adviser Michael Rubin said that the United States is not paying great enough attention to Tehran’s military advancements.

“Perhaps, [Secretary of State] John Kerry believes that Iran only wants ballistic missiles for peaceful purposes,” said Rubin, author of Dancing with the Devil: The Perils of Engaging Rogue Regimes.

“The fact of the matter is that Kerry and crew left both ballistic missiles and the nuclear warhead trigger experimentation at Parchin [military site] off-the-table” during talks in Geneva, Rubin said. “It’s the diplomatic equivalent of installing a burglar alarm system in your house but leaving the keys in the door.”

State Department Spokesperson Jen Psaki was asked on Tuesday about a MondayFree Beacon report that Iran does not need to freeze its nuclear program until final details pertaining to the recently announced nuclear pact are hashed out.

The six-month nuclear enrichment freeze negotiated under the deal will not actually begin until Iran and Western powers finalize the deal at a later date.

“It has not” yet begun, Psaki told reporters. “The next step here is a continuation of technical discussions at a working level so that we can essentially tee up the implementation of the agreement, so that would involve the P-5 plus one—a commission of the P-5 plus one experts working with the Iranians and the” International Atomic Energy Agency (IAEA).

Psaki said she did not know when the actual deal will be finalized and go into effect.

“Obviously, once that’s—those technical discussions are worked through, I guess the clock would start,” she said.

Psaki added that the U.S must put its faith in Iran upholding the spirit of the deal in the interim.

“In terms of what the Iranians are or aren’t doing, you know, obviously, our hope would be, given we are respecting the spirit of the agreement in pressing for sanctions not to be put in place and beginning the process of figuring out how to deliver on our end of the bargain, that the same would be coming from their end in the spirit of the—of the agreement,” she said.

Credit to Washington Free Beacon