Category Archives: Finance

Lessons Worth Remembering: Who Predicted the Bubble? Who Predicted the Crash?

Mark Thornton some 10 years back wrote an article titled “Who Predicted the Bubble? Who Predicted the Crash?” where he discusses who predicted the 2000/2001 bubble and crash. On pages 22 to 24 he writes the following which is worth noting given the current lofty price of the S&P 500 (even though it has fallen a bit during the last month) and the Fed’s expansion of the monetary base and keeping interest rates low: In general there were two categories of correct predictions. The first group was based on analysis of valuation. Using standard…

It’s The Money Supply, Stupid: 10-year Average Earnings- and Dividend Yields, S&P 500 (as of 21 Mar-14)

Posted by EcPoFi Despite this poor performance year to date, the S&P 500 index climbed to a new all-time high just a couple of weeks ago when it hit 1,878 on 7 March (based on daily data). Adjusted for CPI, the index is now higher than the peak from the last bull market which ended in 2007 and is now only lagging the record high from August 2000. The price return for the index was just short of 19% in real terms during the last twelve months with about 6%…