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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: redfrecknj who wrote (81744)	5/14/2007 10:30:23 AM
From: Perspective	Respond to of 110194

There is a very important message in that post. The comparison of earnings yield to global bond yields is vital. I don't have time to look at it now, but I'm suspicious of his figures on the excess of earnings yield over bond yields, though. BC

To: redfrecknj who wrote (81744)	5/14/2007 11:52:56 AM
From: zebra4o1	Respond to of 110194

Hussman would point out that it is misleading to make these kind of value comparisons based on peak earnings. Better to look at earnings over a whole cycle. But maybe we don't have cycles anymore.

To: redfrecknj who wrote (81744)	5/14/2007 2:57:41 PM
From: Perspective	Read Replies (2) \| Respond to of 110194

It looks like Ken Fisher is a first-class clown judging by his history on forbes.com. Not sure how much stock I can put in any of his ideas. search.forbes.com Selected favorites: mywire.com "Housing Boom! By Kenneth L. Fisher \| Feb 26 '07 Don't buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007's housing disaster turns out to be. Well, there won't be any housing disaster. We won't have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating. You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector .." mywire.com "So, are home prices a bubble, ready to burst and implode the economy with it? No! Real bubbles are never commonly referred to as bubbles in the press until after they've burst. Real estate doesn't qualify. You can't pick up a reference to home prices in any newspaper or magazine nowadays without seeing the word bubble nearby. That is true here and around the Western World. Only here is it seen as American-only. In Britain, for example, they not only bubble-fret about ..." mywire.com "Here's another reason to be bullish: everyone is worried sick that America is overindebted, but it's not. This country could profitably take on more loans from abroad and invest the money in productive assets. We're underindebted." BC

To: redfrecknj who wrote (81744)	5/14/2007 7:16:11 PM
From: Perspective	Read Replies (1) \| Respond to of 110194

<they borrow money to buy back and destroy their own higher yielding shares> What yield is the corporate world paying to "buy back and destroy their own higher yielding shares" these days? I know spreads are low, but Aaa corporates still cost 5.5% economagic.com economagic.com so a company would have to have a PE below 20 for that logic to make sense, right? What are the private equity funds paying for debt to do the LBOs? I struggle to believe the earnings yield is above the price of debt for these transactions, especially given that these are NOT financed with Aaa-rated debt. BC