Stocks remain wildly overvalued and seriously underperforming

 The S&P 500 averaged 5,792.32 in October 2024 (the all-time high was on 10/18 at 5,864.67).

Nominal GDP was updated on Oct 30th at $29.349924 trillion for 3Q2024.

That yields a ratio of SPX/GDP of 197.35 vs. median of 81.

Stocks remain wildly, obscenely, off-the-chart overvalued.

The formula is GDPx = SPX.

29.35(81) = 2,377.

The market would have to fall 3,415 points just to hit median valuation at current GDP, or about 59%.

You can see a similar analysis here, where the median is 79.7 vs. current 200.7.

Real return from SPX since Aug 2000 is now about 5.1% per annum vs. 7.4% before that (including the Great Depression, the depression of 1920, and every collapse before that going back to 1871), 31% worse.

We are living through developments echoing the lunatic era of the 1920s, which ended in tears.

Owe no man anything . . ..

 

 

 

We still live in a world of very diminished economic growth since The Great Recession

Real GDP 2007-2023, 16 years, compound annual growth rate: 1.905%.

All the other years, 1929-2007: 3.448%.

We're behind that by almost 45%.

Compare the 16 years of The Great Depression and WWII, 1929-1945: 4.743%.

Or the 16 years prior to The Great Recession, 1991-2007: 3.253%.

This is bad, but you knew that.

The global total fertility rate has fallen to 2.25, just above the 2.1 rate considered replacement level for developed countries, because the world has grown wealthier

 

I don't know why it shocks some people that as people get wealthier they have fewer children, but it does.

 

Global tfr is down 53% since 1950 to 2.25 in 2023 as global gdp per capita is up 80% since 1990.

 

The developed world (just 17%) replacement rate is 2.1 vs. ~1.47 actual tfr.

 

 

 

1Q2024 GDP, third estimate, up $1.455 trillion nominal year over year, US debt to the penny up $3.128 trillion

 

Nominal GDP for 1Q2024 was revised down $28.6 billion in the second estimate today: What's the big picture?

 Nominal GDP came in at a revised $28.255 trillion.

Sounds like a lot, right?

Here's the big picture.

From 1947 to 2000, nominal GDP grew at a compound annual rate of 7.26%.

From 2000 to 2024, nominal GDP grew at a compound annual rate of 4.42%, 39% lower.

The year 2000 marks the US opening to China, and the great wealth transfer out of the US from the middle class under globalism, creating new middle classes there and elsewhere.

We are poorer for it, but we have lots more billionaires now and you can read all about it on your Apple iPhone made by slave labor while you eat your 40% more expensive hamburger from McDonalds since 2019.

Why it feels like a depression

 Because average annual real GDP growth rates are so low.

Between 1929 and 1945, average annual real GDP grew at a compound annual rate of 4.74%.

Between 2007 and 2023, average annual real GDP grew at a compound annual rate of 1.82%, which is under-performing the sixteen year Great Depression and WWII era rate by almost 62%.

Up until 2007, the country averaged 3.44% from 1929. 

Something remains rotten in Denmark.

The S&P 500 closed at a new record high today: 5224.62

 

We've been getting along with ~ 2 million farm workers for over two decades, we don't suddenly need 7.2 million new illegal aliens to help them