Skip to content

Financial consultant warns that U.S. is entering third largest stock bubble

By Catholic Online (NEWS CONSORTIUM)
7/18/2014 (3 years ago)
Catholic Online (https://www.catholic.org)

Smithers warns that bubble will grow until it pops

A new research report by financial consultant Andrew Smithers, chairman of Smithers & Co., suggests that the U.S. is in the midst of another stock-market bubble, much like the bubbles in 1853, 1906, 1929, 1969 and 1999.

A new study by financial consulting firm Smithers & Co. warns that the U.S. is entering another major stock bubble, the third largest in U.S. history.

A new study by financial consulting firm Smithers & Co. warns that the U.S. is entering another major stock bubble, the third largest in U.S. history.

Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (https://www.catholic.org)
7/18/2014 (3 years ago)

Published in Business & Economics

Keywords: Finance, News, Market


LOS ANGELES, CA (Catholic Online) - U.S. stocks are now overvalued by about 80% on certain key, long-term measures, according to Smithers.

Be the light in the darkness: fight world hunger through "prayer and action."

The five dates listed above are the only times since 1802 when data began being tracked, when stocks have been overvalued by 50% or more, and only 1929 and 1999 have bigger bubbles than today, and both of those were followed by disastrous crashes.

Smithers suspects that we are now in the third biggest stock bubble in U.S. history, and that it will grow even bigger before it comes back down.

This research studied data based on a combination of measures: 30-year returns after the bubble and a comparison of U.S. stock prices-since 1900-in relation to a key measure that looks how much it would cost to replace a corporations assets from scratch-called "Tobin's q".

Smithers argues that stock prices are likely to go even higher because they are being driven up by two forces. The first is the Federal Reserve's "quantitative easing" program, the policy of giving banks money in the hope that some of it finds its way into the wider economy, and the second is corporate buying. Today the top buyers of U.S. stocks are companies not people, and many of these companies have been borrowing aggressively to purchase their own stock.

Probably the most important implication of this study is not about what may happen within a year, but that stocks in aggregate do not always generate high returns. The stock-market, even through modern history has gone in long waves, with booms of several decades, followed by mediocre or even disastrous returns of many years.

---


'Help Give every Student and Teacher FREE resources for a world-class Moral Catholic Education'


Copyright 2018 - Distributed by THE CALIFORNIA NETWORK

Pope Francis Prayer Intentions for APRIL 2018
For those who have Responsibility in Economic Matters.
That economists may have the courage to reject any economy of exclusion and know how to open new paths.


Comments


More Business & Economics

Disaster looming? Market flashes warning, worst April since Great Depression Watch

Image of The stock market is in decline. Is recession looming?

Markets have suffered their worst April start since the Great Depression, led by Amazon which lost 5.21 percent of its value in one day ... continue reading


Stock market tumbles, is a recession on the way? Watch

Image of The stock market took a tumble yesterday but may recover today. Nobody is certain of what's next.

Global markets have dropped for the past few days, and just this morning have rebounded. It remains to be seen if the recovery is ... continue reading


Is free money a Christian solution to economic problems? Watch

Image of Is there a Christian solution to our economic problems?

The world is richer and more productive than ever before in history. Yet, income inequality is growing the poverty is on the rise. Middle ... continue reading


Income inequality - Here's why world poverty and hunger remain a problem, frustrating Pope Francis' efforts to solve the crisis Watch

Image of Pope Francis has spearheaded a campaign to end world hunger by 2020.

When Pope Francis accepted the chair of St. Peter, he pledged to end world hunger by 2020. By all appearances, it was an easy win. The math ... continue reading


Jobless claims historic low! - Why workers are getting raises this year, thanks to President Trump Watch

Image of Workers are finally being dealt back into the American Dream, thanks in part to President Trump's economic policies.

Say what you will about President Trump, but American workers are starting to "win" under his administration. Jobless claims have reached a ... continue reading


Never Miss any Updates!

Stay up to date with the latest news, information, and special offers.

Information
Learn about Catholic world

Catholic Online
Inform - Inspire - Ignite

Catholic Online Saints
Your saints explained

Catholic Online Prayers
Prayers for every need

Catholic Online Bible
Complete bible online

Catholic Online News
Your news Catholic eye

Daily Reading
Today's bible reading

Lent / Easter
Death & resurrection of Jesus

Advent / Christmas
Birth of Jesus

Rest of Catholic Online
All Catholic world we offer

Services
Products and services we offer

Catholic Online Shopping
Catholic medals, gifts & books

The California Network
Inspiring streaming service

Advertise on Catholic Online
Your ads on catholic.org

Catholic Online Email
Email with Catholic feel

Catholic Online Singles
Safe, secure Catholic dating

The California Studios
World-class post production service

Education
Learn the Catholic way

Catholic Online School
Free Catholic education for all

Student Classes
K-12 & Adult Education Classes

School Teachers
Teacher lesson plans & resources

Support Free Education
Tax deductible support Free education

Socials
Connect with us online

Catholic Online on Facebook
Catholic social network

Catholic Online on Twitter
Catholic Tweets

Catholic Online on YouTube
Enjoy our videos

Catholic Online on Instagram
Shared Catholic moments

Catholic Online on Pinterest
Catholic ideas style inspiration

Catholic Online Logo

Copyright 2018 Catholic Online. All materials contained on this site, whether written, audible or visual are the exclusive property of Catholic Online and are protected under U.S. and International copyright laws, © Copyright 2018 Catholic Online. Any unauthorized use, without prior written consent of Catholic Online is strictly forbidden and prohibited.