UBS Financial Services has an excellent daily market commentary for clients with the views and outlook of long time New York Stock Exchange veteran Art Cashin. Last week Art included the opinions of Dr. Lacy Hunt and Brian Reynolds. We agree totally with every point they make. Art’s comments as follows: ” While not quite as incredible as the separate but simultaneous conception of Calculus by Isaac Newton and Gottfried Leibniz in the 17th century, I was amazed to see two parallel, virtually identical concepts of the basis for this 8 year rally from the Great Recession bottom in March of 2009.  These concepts come from Dr. Lacy Hunt and Brian Reynolds at New Albion Partners.  Dr. Hunt spoke at John Mauldin’s Strategic Investment Conference.  Luckily for us, the brilliant Steve Blumenthal participated in the conference and took copious notes of most of the presentations.  Here are Steve’s notes on Dr. Hunt’s segment on the stock rally. 

WE SAID IT HERE ON MAY 31 ON THIS SITE  “BLATANT MANIPULATION IN THE GOLD MARKET…EXPECT IT TO OCCUR AGAIN.”  AND IT CERTAINLY DID OCCUR AGAIN TODAY.

Blatant Manipulation in the Gold market…expect it to occur again.

The old age and the elevated valuation of stock market averages are causing concerns that the bull trend may be nearing its end and that a bad turn is imminent. While we recognize that skittishness can bring about market corrections when valuation metrics are ahead of themselves, secular bear trends are only firmly in place when recession risks are very high. Investors often misjudge what is going on. When the situation is too abstract, people tend to go along with the general consensus as it is socially acceptable and expected of them.

We cannot tell the future but we try anyway. It seems to us that the stock market is as vulnerable to a more than 20% downside as it has ever been. The true P/E ratios for some of the leading stocks are at nose bleed levels, insiders who as officers and directors are the most informed of all have been selling at one of the highest rates ever. Last week they sold $456 million of their own personally held shares. Moreover the value of all stocks is now minimally at approximately 126% of Gross Domestic Product which at these levels in the past has led to the most brutal of bear markets.

                                                                “OVERNING INSTITUTE”                                                      It’s happened several times in just the last few years. With so many systems severely underfunded, it’s likely that more government employees will to be blindsided.  

The normal 20% or so stock market corrections to be followed by rallies up again would have given investors and institutions opportunities to invest when stocks are “on sale” never occurred. So we now have a stock market that is by all fundamental value gauges at least 20% over where is should be. Too high a percentage of stocks have been purchased while they were overvalued and at the very high end of their price ranges and valuation levels. Note that we now have a market that at every time it has sold at these levels has been followed by a brutal bear market. Despite ongoing and regular manipulation and central bank intervention and supportive buying, bear markets will occur. Investment in stocks when they are far above their proper value happens all the time as recommendations by the brokerage houses must continue despite overvalued price levels.           Think back to the internet stocks and techs that were crushed then think back to 2008. Today, there are many quality companies that are selling at far too high prices in view of expected earnings and sales. It is not the companies themselves but the prices that too many investors have paid for them. We recognize that the majority of recommended stocks are profitable and may offer solid long term potential, the problem is not investing in these stocks but investing when their prices are too high. Numerous excellent and undervalued stocks can be found today. Yet most […]

    The confidential meeting three years ago…. In an eastern US city approximately three years ago, major bankers met for “discussions.” The purpose of the conference was not disclosed. However, there is an ugly rumor that one of the issues discussed was the necessity to keep the price of gold bullion down. The rumor was that it was about $1300. The point is that if gold is rising, it indicates problems in the financial system and the economy. For years we have seen the “put up jobs” of manipulation regularly occur. But of course they would never “collude” and try to manipulate the price of gold. It must just be another ugly rumor. Manipulation and bank collusion would be downright un-American; it brings tears to my eyes to even think that such things could occur.

K.C. Je trouve que les choses ont l’air très prometteuses. Je pense évidemment  aux métaux précieux et aux aurifères en te disant cela. Ce soir, après la fermeture, au cours de la période du  « after hours trading », l’or est rendu à 1275-76 et les actions affichent presque toutes un bid plus élevé que lors de la fermeture. De plus, les configurations sont en général très ressemblantes et très bullish. Quoi de mieux?          Oui, je sais ce que tu vas me dire, il faut que ça saute, que les actions décollent plus fortement à la hausse.  Je suis bien d’accord avec toi. Je lisais sur Yahoo Finance que les traders sont en train d’acheter l’ETF GLD. Ça, c’est une nouvelle formidable. J’espère juste que ce n’est pas un Fake News. On ne sait jamais avec ces journalistes corrompus. Mais il s’agit vraiment de l’élément le plus important pour amorcer une hausse du marché des aurifères. La configuration est fort belle et typique des aurifères, mais tant que nous ne verrons pas 1350 $ US, il ne faut pas crier victoire trop vite.  N’oublions pas que nous avons affaire à des banksters, la plus grande race de crapules qui existe. Ils nous l’ont bien prouvé.      Salut,  Raymond