Thank G20 it’s Friday – Will World Leaders Keep Markets from Collapsing?

No, of course they won't.

What can the World leaders possibly do to sustain these ridiculously over-priced markets?  Things have simply gotten too expensive to buy – as in, there's simply not enough money in the World to buy the S&P 500 for 100% more than it was priced less than 5 years ago.  That's 20% average growth in an economy where wages are rising at 4% and GDP is rising at 1.8% which simply suggests that stocks have gotten 100% more expensive for no particular reason.

We'll get some more payroll information later this morning but, historically, wages have grown 6.26% annually since 1960 and that INCLUDES the crappy growth we've had this past decade (wages were -5% in 2009, in fact) and the market has grown at about 8.5%.  THAT we can accept.  It makes sense, more money – bigger markets – sure, we get that.  

Image result for wages top 1% 2016What we have now, however, is a stock market that is outpacting wage growth, productivity growth, GDP growth – pretty much anything you want to measure growth EXCEPT the growth in income of the Top 1%, who are, of course, the primary owners of stocks.  Their salaries have jumped about 25% in the same 5-year period but still, even that staggering amount of money isn't enough to justify the 100% rise in market prices.

When we say market bubbles, it's not really a bubble.  People buy stocks every day and people sell stocks every day and prices go up when the buyers are more enthusiastic than the sellers and vice versa but the problem with that is, when the stocks get very expensive AND the sellers get enthusiastic – it becomes much harder to find buyers and you can get violent adjustments in price in order to satisfy the demand for CASH!!! (have I mentioned how much I love CASH!!! lately?).

When you have CASH!!! while other people are panicking, YOU are in charge.  When a marlet is in a frenzy, as it is at the moment, then no one wants cash and everyone wants stocks, so the sellers of stocks are in charge and stocks get bid up to higher prices.  Just because the small
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