As you listen to the nitwits and propagandists on CNBC and the rest of the captured MSM expound about the NEW HIGHS being reached by the stock market, keep in mind one inconvenient fact:
S&P 500 Level on March 24, 2000 – 1,527
S&P 500 Level on January 29, 2013 – 1,507
For the math challenged, the stock market is still lower than it was 13 years ago.
Jeremy Sigel wrote his book Stocks For the Long Run in 1999 and he was on Bloomberg TV yesterday predicting further stock market gains. I’m sure he’ll be right this time.
Yojimbo says:
And yet we have money in Hussman funds and we are losing money.
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30th January 2013 at 8:17 am
Eddie says:
The stock market is working out well for the Waltons.
I read today that the wealth of the Walton family now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.
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30th January 2013 at 9:10 am
Welshman says:
Yojimbo,
I’m 1/3 equities, 1/3 gold, and 1/3 cash. I have done OK, but Hussman plays it very safe, and if you want to be sleep nights, he is not a bad pick. As ole Muck is fond of saying, those who lose the least WINS in this environment.
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30th January 2013 at 9:21 am
Eddie says:
When one family has wealth equal to 40% of the entire population, it shows just how innacurate the term ” the one percent” is to describe the distribution of wealth in this country. The truth is that most of the wealth is concentrated in a group of families that comprises far less than one percent.
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30th January 2013 at 9:41 am
Wyoming Mike says:
But you’re leaving out the fact that prices have deflated since then, meaning we are still ahead, right?
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30th January 2013 at 10:29 am
Administrator says:
Wyoming Mike
Why so cynical?
The CPI in March 2000 was 171
The CPI today is 230
For the math challenged, that is a 34.5% increase in inflation, while the stock market went nowhere.
Using a true measure of inflation and we’re probably talking 80% increase in costs.
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30th January 2013 at 10:39 am
Muck About says:
See my comments under “Guess what”…
One hates to predict when TSHTF —- the timing Gods will bite you on the ass every time.
But this time is really different – and has been different since 2008.
The Feds have trapped themselves in a liquidity trap beyond all belief and the excess credit, debt and make believe money locked into both the Fed and bank assets (sterilized) WILL be unwound until the books are honestly balanced.
With way over $500 Trillion of unfunded default swaps sloshing around world markets, ($200+ trillion in the USA alone) being buried deeply in the trash cans that litter the banks back room operations, when a rip in the fabric of world commerce happens, the whole pile of dog shit will come sluicing down the pike and the 1930′s will look like high hog living to most of the world (US included).
The longer it takes to happen, the worse it will be. We are way beyond awful now and the only thing that might soften the blow here for a few years is our immensely developed infrastructure that will take time to disintegrate and allow some functionality to continue here beyond what is possible in lesser developed countries.
The first thing to go will be transportation as fuel costs drive the big rigs off the road. Then the utilities will start failing (anything that goes “whir” or “rumble” or has moving parts) as maintenance slowly falls behind. The last to go will be the roads and bridges – they are built to last and as vehicle traffic falls off, wear and tear of the roads and bridges will also decrease. In the end, entropy will get even the roads and long before that, we’re right in Kuntsler’s World Made by Hand..
MA
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30th January 2013 at 10:49 am
Eddie says:
I don’t see how we even go this far, running the economy on fumes for four years now. You might be right about the bond market…but I don’ t like what that portends. Once it all starts to unravel, who knows where it will stop?
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30th January 2013 at 10:55 am
Administrator says:
Muck
I take it you don’t agree with the esteemed Dr Siegel?
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30th January 2013 at 11:09 am
wyoming mike says:
Was watching Andy Griffith the other day, most of the vegetables were under 10 cents a pound, and that was 1965. No inflation here, move along.
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30th January 2013 at 11:59 am
AWD says:
Yea? What’s the inflation adjusted S&P?
Per admin:
34.5% inflation: 65.5% of S&P=987
80% inflation: 20% of S&P=301
Inflation, the silent but deadly tax.
Greenspan and Bernanke have pumped more than $6 trillion into the economy (and mainly the stock market), and what do we have to show for it? Debt, debt, a huge Fed balance sheet, and more debt.
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30th January 2013 at 12:02 pm
AWD says:
Wyoming Mike reads the economic tea leaves via Andy Griffith. Nice.
I wonder what Andy Griffith, who didn’t carry a gun, would think of the DHS thugs, domestic predator drones and SWAT teams we have today?
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30th January 2013 at 12:05 pm
Administrator says:
——————————————————————————–
Posted 2013-01-29 23:24
by Karl Denninger
Amazon Buyers: Did You READ The Report?
I have to wonder. After all, the numbers are right here.
Let’s just cut the crap and get to the facts.
Free cash flow decreased to $395 million — on sales of $27 billion, or 0.065%. That sucks. It’s also down 81% from last year when it was $2.09 billion on $48.08 billion (4.35%, which is still pretty crappy.)
Net income was down 45% as well. And while full year sales were up 27%, net was down on the higher sales amount, and so was operating income on a full year basis! In fact it was down 22%!
Transition says Bezos? Like hell.
Further, net sales are forecast under estimates for the next quarter and the company’s operating income range is wider on the negative (loss) side than positive.
Everyone wants to talk about the increased cash position. Did you notice where it came from?
The company sold just over $3 billion in debt — but the cash position increased by about half that. Worse, depreciation and amortization roughly doubled!
Doubled folks, while sales were up 27%. That’s not good, it’s bad! Your depreciation and amortization should not be rising faster than sales; if it is you’re becoming less efficient, not more.
It’s good that payables were lower at year end and receivables were inline — that’s positive and means your control of both vendors and customer credit is reasonable.
Fulfillment expenses were up 36% in the last three months — and up 47% on the year — while sales were up 27%. Remember that some sales are digital in format and have near-zero fulfillment expense. This is not good either; fulfillment expenses increasing faster than sales is again an indication of efficiency problems. In this case that increase is not small either, especially on a full-year basis. Fulfillment expenses rising at nearly double the rate of sales increase is especially troubling!
G&A is rising faster too — 36% on the year.
And while interest expense is relatively modest at $92 million, it now is more than double interest income, where last year it was near-parity. That, of course, came from selling that $3 billion (roughly) in new debt, and will continue to be there in the future.
And by the way, without that interest expense the company would have made a profit on the year. A small profit… but a profit.
Oh, and if that’s not enough, growth is slowing. A lot.
By 38% in the last quarter of the year (compared to 2011) and by 30% on the full year.
Forward stock price multiple expansion is supposed to come from increasing sales growth on a percentage basis, not contracting.
Of particular concern is the fact that electronics and general merchandise sales growth rates for the last three months — Christmas Season — dropped approximately in half from last year. While media increased a bunch it’s also only about a third of the size of general merchandise. “Other” is inconsequential; about 7% of the whole.
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30th January 2013 at 12:56 pm
SSS says:
“the only thing that might soften the blow (of an economic collapse) here (in the U.S.) for a few years is our immensely developed infrastructure ….. the first thing to go will be transportation as fuel costs drive the big rigs off the road. Then the utilities will start failing (anything that goes “whir” or “rumble” or has moving parts) as maintenance slowly falls behind.”
—-Muck About
I disagree, Muck. Economic disorder or collapse will drive priorities TOWARDS the NECESSARY big rigs and utilities. Getting basic foodstuffs to suburbia and small town America will rapidly DISPLACE that “hot cargo” of fresh fruits and vegetables from Mexico, Florida, California, and the Southwest. You want fresh peaches? Sorry, available in a can only. Maybe. How about the latest flat screen from China now on sale at Wally’s World? Fat chance. This reordering will take tens of thousands of big rigs off the road, as you assert. But the big rigs carrying the essential goods will continue to roll down the highway.
As for utilities, well, here you are just flat dead wrong, Muck. Water and power will move to the head of the line above everything else, including SNAP cards. That steam turbine at a coal plant that is catching a cold WILL get all the antibiotics and parts it needs. The pumps at water companies will be repaired, bearings will be lubricated, and reservoirs will be properly maintained and protected. To do otherwise is inviting widespread anarchy, death, and disease.
Now, everyone here on TBP can see the wisdom of what I’m saying. I’m sure you have the same trust in governments to have the same vision. You don’t? Neither do I.
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30th January 2013 at 10:38 pm