Secular bear Rosie not throwing in the towel . . . again

 Rosie was on the wrong side of the trade in April 2011 when the bear went bullish. Is he again now?

He uses the same phrase, too, "not throwing in the towel", lol.

In April 2011 he claimed he wasn't throwing in the bear towel after the S&P 500 had already recovered from the 2008 debacle. Then the market slid 20% all the way to October 3, 2011, with the index falling to 1099 again, right where it was exactly three years earlier on the very same date.

It was . . . spooky!

If you had followed his take that April, you'd have lost 20% again. On top of all your losses in 2008. Ouch. Ouch.

Many of us who had kept our powder dry couldn't believe it in October 2011. We thought we were headed back to the depths of March 2009 again, too, just like the last time the market fell to 1099. I mean, that was a free-fall from there in 2008. TARP got signed in a panic that week to stop it, to no avail.

But October 2011 turned out to be more of a retest than we realized, one of the last great buying opportunities of the period. It was a brutal, crushing period of doubt, which some of us still live with.

Now it's the reverse, with unbelievable euphoria everywhere, with the S&P 500 at 6075.

A period of euphoria seems to me like a damned strange time to throw in the bear towel again, after missing out for two years by his own admission. I have no idea if Rosie is the contrary indicator he appears to be.

But the valuation of the market is pre-1920s crazy right now. It is literally not on the charts of our experience in the post-war, or even from the roaring '20s. We have GDP of $29.354 trillion, meaning a valuation of 207, when fair value has been 81 since the Great Depression.

I'm not in it, and I intend to keep staying out, because I can.

Good luck out there to those of you who go where angels fear to tread.

Besides their bad character, what do Trump and Obama have in common in 2009 and 2020?

 Trump and Obama signed off on the two most fiscally irresponsible periods in post-war history, and Biden two years in looks set to join them.

The Executive is supposed to be a check on irresponsible spending. But both Trump and Obama went right along with it instead of vetoing the outrageous spending of the periods.

What else do they have in common?

Two crises, both of which plunged the country into hysteria.

The Great Financial Crisis did not begin to end until March 2009 when the FASB signaled its intent to suspend mark-to-market rules. The stock market bottomed almost immediately, but as with all cases of mass hysteria it took time for the panic to pass as other sectors recovered "one by one". 

The Pandemic Crisis gripped the country in March 2020, sending millions home from work, stocks plunging, toilet paper into shortage, businesses into bankruptcy, and on and on. With just about everyone vaccinated who was going to be by the end of 2021, the country gradually started to come out of it in 2022, eschewing jabs, masks, and social distancing as it became clear that the Omicron variant was infecting tens of millions despite all those measures.

2020 was the single most fiscally irresponsible year in the post-war since 1953. Federal expenditures, bloated by panicked bailouts, outpaced tax revenues by a whopping 216%.

Only 2009 comes close, at 210%, the second worst year on record.

Third, not shown, was 2010 at 196%, and fourth, not shown, was 2021 at 176%, each a part of the respective crisis periods.

Do you know what else those two years share in common?

Spending bills must originate in the House of Representatives.

In 2009 and 2020 its Speaker just happened to be the same person, as she was in 2010 and 2021.

Nancy Pelosi owns the four most fiscally irresponsible years in the entire history of the post-war. Her two speakerships literally busted out all over. 

How low could the S&P 500 possibly fall from the Monday, Jan 3, 2022 closing high of 4,796.56?

 Some are calling this a dot-com-like bubble "burst". 

Jeremy Grantham thinks a 40% decline is in the offing.

That burst happened gradually, actually, from August 2000 to February 2003, more like an old balloon slowly deflating in the corner of the room under a table months after the party had ended.

On an average basis, the S&P 500 fell from 2471.50 in August 2000 to 1314.31 in February 2003, in March 2022 dollars. That 1157.19 point drop amounted to a drop of 46.82%.

Before climbing to the spectacular heights we know today, the S&P 500 had another appointment with more bad news, unfortunately, in March 2009, achieving an even lower level than February 2003.

In March 2022 dollars, the S&P 500 bottomed in March 2009, again on an average basis, at 1023.36. That was 1448.14 points from 2471.50 in August 2000, a drop of 58.59%.

That was quite a long process, a very bad, no good, rotten almost a decade for stocks. Real per annum return August 2000 through March 2009 averaged  -8.14%.

Many children watched their parents lose everything, including the house.

Those February 2003 and March 2009 type of events must be recognized as within the realm of real possibility even today.

4796.56 minus 46.82% would put the S&P 500 at 2551.

Minus 58.59% . . . 1986. 

Not saying it will happen. Not saying it's even probable. Just possible, because it has happened before.

Smart investors are ready for the possible.

The index is down 18.19% from the all-time-high tonight.

 

The current secular bear market in stocks matched the length of the Reagan secular bull in September 2018

Average investors since August 2000 have underperformed the great Reagan secular bull market by nearly 70% annually through September 2018, but the current secular bear marches on.

Average investors aren't just severely underperforming the Reagan bull, however. The average 5.77% per annum return since August 2000 also underperforms the S&P 500 annually from 1871-1982 . . .  by 29%.

When the current secular bear ends is anyone's guess. While already long in the tooth, there's nothing that says it can't last even longer.

But you'll know it's over when stocks are universally shunned, as they were in the summer of 1982. Unfortunately, that would mean the S&P 500 would have to fall, and fall hard and deep, from here. In a worst case scenario that would mean to a level of, say, 283, which is today's inflation-adjusted level of the S&P 500 in July 1982, 89.6% south of yesterday's close at 2728. That's what it would take to match that buying opportunity, not just of a lifetime but of the whole history of the S&P 500.

On an inflation-adjusted basis a more likely future washout range would include a level something well north of 283, however, say between December 1987 at 527 and March 2009 at 898. The feeling has always been that the catastrophe of 2009 was arrested by draconian interventions, and that the market wasn't allowed to do its work and destroy the weak as it should have.

The Reagan secular bull was an extreme outlier in the history of the market. Nemesis is still lurking out there somewhere in its relentless quest to revert to the mean. Best not to stand in its way. 

Barack Obama March 3, 2009: "Buying stocks is a potentially good deal if you've got a long-term perspective on it"

Here, after the 10 minute mark.

S&P 500, average nominal per annum return March 2009 - August 2018: 17.51%

Edward Snowden documents help The Intercept identify eight AT&T buildings central to NSA spying on global internet, phone, email, chat

From the story here:

THE EIGHT LOCATIONS are featured on a top-secret NSA map, which depicts U.S. facilities that the agency relies upon for one of its largest surveillance programs, code-named FAIRVIEW. AT&T is the only company involved in FAIRVIEW, which was first established in 1985, according to NSA documents, and involves tapping into international telecommunications cables, routers, and switches.

In 2003, the NSA launched new internet mass surveillance methods, which were pioneered under the FAIRVIEW program. The methods were used by the agency to collect – within a few months – some 400 billion records about people’s internet communications and activity, the New York Times previously reported. FAIRVIEW was also forwarding more than 1 million emails every day to a “keyword selection system” at the NSA’s Fort Meade headquarters.

Central to the internet spying are eight “peering link router complex” sites, which are pinpointed on the top-secret NSA map. The locations of the sites mirror maps of AT&T’s networks, obtained by The Intercept from public records, which show “backbone node with peering” facilities in Atlanta, Chicago, Dallas, Los Angeles, New York City, San Francisco, Seattle, and Washington, D.C.

One of the AT&T maps contains unique codes individually identifying the addresses of the facilities in each of the cities.

Among the pinpointed buildings, there is a nuclear blast-resistant, windowless facility in New York City’s Hell’s Kitchen neighborhood; in Washington, D.C., a fortress-like, concrete structure less than half a mile south of the U.S. Capitol; in Chicago, an earthquake-resistant skyscraper in the West Loop Gate area; in Atlanta, a 429-foot art deco structure in the heart of the city’s downtown district; and in Dallas, a cube-like building with narrow windows and large vents on its exterior, located in the Old East district.

Elsewhere, on the west coast of the U.S., there are three more facilities: in downtown Los Angeles, a striking concrete tower near the Walt Disney Concert Hall and the Staples Center, two blocks from the most important internet exchange in the region; in Seattle, a 15-story building with blacked-out windows and reinforced concrete foundations, near the city’s waterfront; and in San Francisco’s South of Market neighborhood, a building where it was previously claimed that the NSA was monitoring internet traffic from a secure room on the sixth floor.

The peering sites – otherwise known in AT&T parlance as “Service Node Routing Complexes,” or SNRCs – were developed following the internet boom in the mid- to late 1990s. By March 2009, the NSA’s documents say it was tapping into “peering circuits at the eight SNRCs.”

May is the most wonderful time . . . of the year . . .

. . . to sell stocks if you've capitalized on the spectacular 9-year run since March 2009.

Getting in when stock valuations are cheap is key. So is getting out when those valuations soar as now. On the scale used in the chart, valuation right now is about 13.2, similar to the year 2000 when everything fell apart. At the January 2018 high valuation averaged 14.3.

Hillary can't claim she'll continue the good economy because it isn't a good economy

From the macroeconomic point of view of GDP, jobs and homeownership, the economy under Obama has been a bad joke.

Economic growth is lagging, lagging I say, the horrible, awful George W. Bush . . . by $2 trillion. Current dollar GDP under Obama has grown a paltry 28.2%. Under Bush, the worst in the post-war until now, it at least grew by 41.7%. Obama should kill to have George Bush's economic growth, and Hillary probably will, by starting another war. Nothing boosts GDP like war-spending.

Meanwhile job growth as measured by monthly total nonfarm has slowed in 2016 by over 20% compared with 2015, to 181,000 new jobs monthly vs. 229,000 new jobs monthly last year. Is that a hopeful trend?

And if you think 2015 was so great, it wasn't. If the same percentage of the population had been working in 2015 as worked in 2007, there would have been 7 million more employed than there were. There has been a huge contraction in employment, which explains the GDP problem. Without work there is no product.

You can see this vividly in full-time jobs. Compared to October 2007, we have just 2.6 million more full-time jobs in October 2016 than we had in 2007. Think about that. Just 2.6 million more full-time jobs but population has increased by 22 million. After recessions, full-time has always recovered to the previous highs in 2-3 years, but not under Obama. This time it took 8 years, a terrible stain on the economic record.

Next consider housing. There have been 6.4 million completed foreclosures since September 2008 even as the Feds have done everything they can to get housing prices to recover, distorting the economy to the point that today the typical $247,000 existing home is unaffordable for 90% of individual wage earners. No wonder the homeownership rate, at 63.5%, has plunged to a level last seen in 1985.

In the end about all Hillary surrogates have to boast of is the stock market. Larry Kudlow featured one on his radio program this weekend doing just that. But estimates of how many Americans own stocks vary considerably. Gallup recently put it at 52%. Pew in 2013 put it at 45%. Shockingly, the Federal Reserve itself estimates it's more like 13-15%. In the best case only half the country is reaping benefits from stocks, and probably a lot less than half.

Those people who had the foresight to invest in March 2009 have done extremely well. On average the S&P 500 is up over 17% per year since then through September 2016.

But how have long term investors done, people who buy and hold in retirement accounts? Since the last stock market boom peaked in August 2000, they are up only 4.32% per year. That's almost 64% worse than the historical post-war performance of 11.9% with little upside on the horizon as the market has made new all-time highs and is obscenely valued.

Nothing Hillary Clinton is proposing looks remotely likely to improve any of these measures, except maybe by starting a new war.

My boy will be 18 next year. Please don't vote for her.

Bob Brinker's advice to stay fully invested in stocks in 2008 beats Jim Cramer's to sell

Bob Brinker famously said on his radio show Moneytalk during the 2008-2009 market meltdown that "no one could have predicted this".

As a market timer, he's taken a lot of heat for this statement, including from me, but it is time to reassess his 2003 call to return to a fully-invested position in the stock market and to stick to it in 2008 despite the meltdown.

How has that worked out? 

"Fully invested" means different things to different people. This is because it is a question of asset allocation. Asset allocation strategies are by definition highly individualized to meet objectives while minimizing risk, and they depend on many factors including income and age, which change over time and thus necessitate adjustments to the strategy periodically. So to be clear, a person who allocates 50% of all resources to stocks at any given time is fully invested when that is so. But that means that a person who has much more tolerance for risk and normally invests 90% of all resources in stocks by definition has a greater percentage of all his resources in stocks, yet both individuals are "fully invested".

OK, so let's take the hypothetical person born in 1949 who just retired at the age of 65 in November 2014. That person has had theoretically 43 years of continuous investing life, let's say beginning from November 1971 after landing that first job out of college in the spring of that year.

Now whatever this person had allocated to stocks over the course of those 43 years, using the S&P 500 as a proxy for the part allocated to stocks, he or she has averaged a nominal return of 10.68% annually with dividends fully reinvested through November 2014, including the crash periods of 2000 and 2008.

But back in March 2003 this person was turning 54 years old and was worried about the future after the stock market crash he had just experienced. And let's say he had ridden his investments all the way down in that crash by being fully invested through the 2000 debacle. From 1971 to that point in 2003 his average annual performance had been 10.94%.

Had he heard Bob Brinker's advice to be fully invested going forward and stayed the course he had been on, how did remaining in the market as before repay him as part of the overall average performance of 10.68% which he ended up achieving annually on average through November 2014?

The answer might surprise you: The average annual performance of the S&P 500 from March 2003 through November 2014 has been 10.01%. The market crash of 2008-2009 might certainly have unnerved this investor, who was then turning 60, to the point of utter capitulation, for it reduced his performance from 1971 through March 2009 to 9.11% per year on average.

It's clear, however, that cutting and running after the fact in 2008-2009 was not the answer. That was Jim Cramer's answer in October 2008, on morning television no less, but it wasn't Bob Brinker's.

Simply staying the course was like putting back on a point and a half for every year of the 43 year investing life of our hypothetical investor in a matter of just five years.

Kudos to Bob Brinker. Raspberries to Cramer.

"Retail and Food Services Sales" falls 0.94% in December, which is cautionary for GDP

The drop is not that odd for a December.

In December 2007 we had a drop of 0.6%, in December 2008 a drop of 2.5% (part of the big whopper decline of 12.25% between summer 2008 and March 2009), and in December of 2011 a drop of 0.3%.

The drop in January 2014 when GDP went severely negative was 1.26%, so the 0.94% magnitude this time does not augur well for 4Q2014 GDP.

TARP ends, but conservatives still don't realize it was just a sideshow

Existing crisis loans 1st of the month in billion$

That TARP was just a sideshow was not known at the time in 2008, but it should be known by now.

Too bad conservatives haven't paid attention.

TARP assumed the role of the main actor on the stage of the financial panic as the liberal government of George W. Bush tried to show that it was capable of doing something to bring the panic of 2008 to an end. Bush at length signed the TARP legislation on October 3, 2008, at which point the stock markets promptly rewarded him by caving over the next three weeks, setting the stage for the final denouement by March 2009. Only Securities and Exchange Commission changes to mark-to-market accounting rules at that point stopped the cratering and put a floor under stock prices. Meanwhile behind the scenes the liberal government of Woodrow Wilson in the form of the Federal Reserve had already been hard at work for months frantically doing the real rescue.

Now that TARP is over, liberal political operatives are wont to characterize TARP as a success because it supposedly made a profit accruing to the government, and hence to The People, who are ever almighty in liberalism. They also say this to keep our eyes off the ball. "Conservatives" continue to take that bait and argue there was a loss to TARP, never examining themselves to see if they are in the larger truth. National Review's Matt Palumbo is just the latest example, here, quibbling over a few measly billions of dollar based on an argument from inflation to substantiate a loss to TARP.

It doesn't get much more pathetic than that.

TARP became the sideshow it always was once and for all when Bloomberg News, using the Freedom of Information Act, forced the Fed long after the fact in late 2010 and early 2011 to reveal the true scope of its bailout of the world in 2008-2009. Behind the scenes the rest of us had groped in the dark trying to fathom TARP's $700 billion bailout, when that turned out to be just a decimal point in the real bailout, the Fed's $7.7 trillion lending authority through the discount window and other programs.

"Conservatives" still haven't grasped this.

Over five million Americans lost their homes in the wake of the panic, almost 30 million ended up filing first time claims for unemployment in 2009 (85% more than did just last year), and almost eight years after the employment peak of 2007 full-time jobs still have not recovered, the most disgraceful record in the post-war.

The Federal Reserve bailed out hundreds upon hundreds of large banks and corporations not just in the United States but all across the globe by backstopping them with promises of huge sums if needed while regular Americans were simply left to fend for themselves:

$7.77 trillion -- The amount the Fed pledged to rescue the financial industry, according to Bloomberg research that examined announced, implied or actual upper limits on lending and guarantees. This number, which represents potential commitments, not money out the door, was first published in March 2009, when it peaked.

“One of the keys to understanding why we’ve avoided another Great Depression, so far, is to see how bold the Fed was in 2008 and 2009,” said Niall Ferguson, a Harvard University history professor. “That boldness consisted of a range of contingency commitments that backstopped the banking system. Just because they weren’t used doesn’t mean they weren’t important.”

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Actual loans at rock bottom prices over time amounted to about half that, at $3.3 trillion, as can be appreciated here in just one of the lending programs of the Fed, the famous discount window. The low interest rates charged there, a sideshow in themselves, are thought to have benefited the banks at the same time by about $13 billion, according to Bloomberg, over what they would have had to pay at market rates.

That was simply the cherry on the gargantuan crony capitalism cake, an object, I am sure, of singular fascination for the likes of the Matt Palumbos of the world.

That spike in the graph is the discount window lending in the 2008 panic

At 10.01 VGPMX is tonight again below the March 2009 low of 10.04

Vanguard Precious Metals and Mining is looking attractive once again, revisiting the territory of December 2013 when the fund briefly dipped below 10.00 to 9.69 or so. If a real stock market correction of 10% or more makes an appearance at long last, I'd expect the fund to fall in price quite a bit more, this sector fund being a stock fund. A stock market bear of 20% or more might actually take the NAV much lower, with the vicinity of 5.00 being not inconceivable.

Total Market Capitalization To Nominal GDP Ratios, Selected Years

I have used the Wilshire 5000 level at year end multiplied by 1.2 as a proxy for total stock market capitalization (except where noted by the month), and the latest summer revisions for calendar nominal GDP, in summer 2014 for the period back to 1999, and in summer 2013 for the period back to 1971.

A ratio close to 1.0 indicates the market is fairly valued relative to GDP. A ratio less than 1.0 indicates the stock market is "on sale" to some extent (for example, a ratio of 0.48 indicates the market is trading at a 52% discount). A ratio of more than 1.0 indicates the stock market is expensive and may be considered overvalued for investment purposes (for example, a ratio of 1.72 indicates the stock market is as much as 72% too expensive).

1971   .975

1981   .480

1987   .595

1990   .622

1994   .745

1997 1.296

1999 1.715
2000 1.420
2001 1.209

2002   .912

2003 1.125
2004 1.170
2005 1.147

2006 1.234

2007 1.228

2008   .740

March 2009   .676

2009   .962

2010 1.071

2011 1.019

2012 1.113

2013 1.410

March 2014 1.407

June 2014    1.446

Historically considered, valuation of the stock market by the end of 2008 made then a much better investing opportunity than was late 2002 and early 2003, almost 20% better. And valuations have remained reasonable throughout 2010-2012 and only became expensive in 2013. The four year period beginning in late 2008 has been an excellent opportunity for those with cash to invest.

I maintain that a primary driver of conditions in 2013 was the midnight hour 2012/2013 resolution of tax uncertainty, in the form of making the Bush tax cuts and alternative minimum tax rates permanent, ending the tinkering with Social Security, and reaching a compromise on capital gains tax rates.

All hail John Boehner.

Bob Brinker was right in March 2003, but not until May 2009 at the earliest

Bob Brinker's gain since March 2003 when he called for his followers to fully invest in the stock market has been an impressive 7.14% per annum inflation-adjusted, on average, in the S&P500 index through March 2014.

Things didn't look anywhere near that good in April 2009, however, when his  return was still -0.45% per annum, inflation-adjusted, on average, for the 6 years plus one month. His returns had plunged at their worst to -2.32% per annum just the month before, through March 2009, because of the market crash, which of course he never saw coming and he never predicted. Bob remained fully invested into the teeth of the 2008-2009 banking apocalypse cum financial panic, and never told his followers to sell, as did Jim Cramer, infamously, the Monday after TARP was signed into law by President George W. Bush on October 3, 2008, a Friday, on national television no less. Who needs Monday morning coffee with that kind of news on NBC? I say Bob Brinker gets a lot of credit for that courage, and Cramer gets nothing but ridicule.

Bob Brinker's advice began to turn positive again in May 2009, as the stock market began to recover with the suspension of mark to market rules by the SEC in late March. Brinker never told anyone to get out of the markets, but soldiered on to where we are today. Was it prescience? Bull-headedness? Luck? Faith?

Here's what I think it was: Bob believes in secular markets, and he knew the secular high in 2000 was not matched in 2007 on an inflation-adjusted basis (1753), so there was no need for caution even though there might be a big correction. The financial collapse made him look like a fool for the size of it, but he knows that today even at 1967 the S&P500 remains well off the real 2000 high of 2045. We could just as easily get a big correction here before we march on to retest that real high.

Either way the market should retest the former high before the secular bear comes to an end, which means we have a bit more to go in point terms, but not very much.

I'm expecting a stock market sell order from Bob Brinker in the not very distant future as we get closer to 2045.

Anyone wanna bet we get as high as 2249?

h/t politicalcalculations.blogspot.com

Market cap to GDP ratios March 2009 vs. March 2014 flash valuation warning

Probably the broadest measure for stock market valuation purposes is total stock market capitalization divided by GDP. Warren Buffett uses it and John Hussman has spoken approvingly of the measure.

But because we have to wait for GDP numbers for at least a month after the quarter end, the ratio cannot be a real-time valuation tool. And given that revisions to GDP can be substantial in the 2nd and 3rd estimates, as well as in the annual summer revisions, precision using the 1st estimate is also wanting. Nevertheless the calculation provides a big picture snapshot of where we have been in the market cycle, and gives forward guidance for long term investors. Presently it appears to counsel taking chips off the table and waiting in cash for a better opportunity to invest. 

For the following I use nominal figures for GDP as revised in the most recent updates from bea.gov and calculate market cap using the popular Wilshire 5000 (level x $1.2 billion) as close to March 31 as practicable.

A comparison of March 2009 to March 2014 is instructive, since March 2009 was a pretty good buying opportunity both in terms of the absolute level of the stock market after its decline and the coincident Shiller p/e valuation which was about 13.3 on March 1. The ratio has almost doubled in the interim, indicating that now is probably not a good time to commit large new sums to stock markets. The current Shiller p/e begins the day at 26.31, which is also nearly doubled from five years ago.

That said, the 10 year Treasury presently pays just 69 basis points more than the dividend yield of the S&P500. At the October 2007 stock market high, the 10 year Treasury paid 276 basis points more than the dividend yield of the S&P500. You could argue the Fed caused the markets to crash by taking rates much too high in 2006 and 2007 and that Janet Yellen is bound and determined not to let that happen again anytime soon, meaning stock markets could have higher to go. Keep in mind that the inflation-adjusted all-time high of the S&P500 was 2045.09 on August 1, 2000. We're at 1962.46 this morning. 

March 30 2009

$10.32 trillion market cap

---------------------------------------------- = 0.72

$14.38 trillion GDP

March 31 2014

$23.99 trillion market cap

---------------------------------------------- = 1.41

$17.02 trillion GDP

Shiller p/e vs. S&P500 p/e: Was either a guide to investing since 2008?

The merit of the Shiller p/e, which is backward looking, for timing investment decisions is cautioned against even by its supporters like John Hussman. It's something of a straw man to attack people like him for using it that way when they really don't use it to time market entry and exit points. Hussman views the indicator as one of a number of things which help him forecast 10-year returns going forward, a point lost it seems on people who don't read him carefully. High Shiller p/e levels in the present are part of an ensemble of indicators which to Hussman forecast low average annual returns over the course of the next decade.

That said, which has been the better indicator for timing a major allocation of monies to stocks in the recent past, the backward-looking Shiller p/e or the simple S&P500 p/e?

Today's Shiller p/e is a very high 26.06, 57.65% above its mean level of 16.53. The S&P500 p/e is 19.32, 24.56% above its mean level of 15.51. By both measures, today would seem to be a costly time to invest new monies in the stock markets.

How about during the March 2009 period when stocks tanked to their lows during the financial crisis?

The Shiller p/e actually told you to invest, hitting 13.32 on March 1, just days before the markets bottomed. In fact between October 2008 and June 2009 the indicator remained at or below 16.38, in other words below mean level, while the S&P500 inverted bell curve fell from 1100 to 683 and rose to 940. With the S&P500 now over 1900, any time during that woeful period looks in retrospect like a great time to buy. The trouble was that people didn't have any money to invest, being fully invested as usual, riding it all the way down after riding it all the way up.

The S&P500 p/e on the other hand was quite high on March 1, 2009 at 110.37, 612% above its mean level! It most definitely told you NOT to buy then, when you should have bought then. This indicator didn't hit its lows for the period, at the 13 level, until the late summer of 2011 and then only briefly, when interestingly enough the S&P500 was trading near 1100 again, in retrospect another very good time to buy. But at that time the Shiller p/e was above mean, at about 20, and you might have been forgiven for not taking the bait. But because you didn't you've missed an 800 point climb in the S&P500.

You have to go all the way back to the late 1980s to get an S&P500 p/e ratio consistently below 15, and even earlier to the mid-1980s for the Shiller p/e. All of which is to say that stocks have been rather expensive for quite a long time in general, coinciding with the generational focus on it as the way to make the big money for retirement.

In other words, we're in a bubble, and we blew it.

Will The Phenomenal Gains In The S&P500 Since March 2009 To Date Be Cut In Half By 2019?

John Hussman, here:

Though we don’t have a 10-year figure for actual returns since 2009, investors should also notice that the improved valuations evident in 2009 will indeed have been followed by a decade of 10% S&P 500 total returns even if the total returns for the market over the coming 5 years are somewhat negative (which we view as likely).

The annual real gain for each of the almost five years to date is just under 20%, so a 10% annual return for each of the ten years in the period implies forfeiting half of what has already been made in the next five years.

Hussman has previously indicated that the vast majority of investors is likely to ride the coming decline all the way to the bottom.

The Stock Market Laugh Of The Day Comes From Josh Brown, The Reformed Broker

TARP wasn't even a speed bump as the market crashed past 1099

Here:

The House got another crack at the TARP vote on October 3rd and this time it passed 236-171. 63 Dems and 91 Republicans had still voted no, but common sense triumphed. Bush signed it a few hours later and the markets eventually stabilized (although the bear market was far from over.)

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Excuse me, but the market went from 1099 on October 3, 2008 to 899 on October 10th, an 18% decline AFTER TARP was signed.

Then it went to 800 by Thanksgiving, on its way to below 700 by March 2009.

TARP didn't do a damn thing to stabilize the market.

5 Years Post-Lehman Bros. Bankruptcy, VTSMX Makes New All Time High

Vanguard's Total Stock Market Index Fund is up 163% since the March 2009 low of 16.43.

On the day Lehman Bros. failed in September 2008, VTSMX closed at 29.24 but proceeded to fall from there another 44% into 2009 despite the passage of TARP in early October 2008, and despite massive short-term discounted loans to just about the whole world by the US Federal Reserve Bank denominated in the trillions of dollars throughout the period.

From the 2007 high to September 15, 2008 this fund had already fallen from 37.80 or nearly 23%. The total decline of the fund from the 2007 high to the March 2009 low was nearly 57%.

A decline of that magnitude from today's new high would land the fund back at 18.81.

Estimated Fair Value Of The S&P500 Today Is About 1000

Doug Short doesn't say "fair value", but about 1000 should be the fair value level of the index using regression analysis, here (where he has, as always, a vivid chart):

The peak in 2000 marked an unprecedented 152% overshooting of the trend — nearly double the overshoot in 1929. The index had been above trend for two decades, with one exception: it dipped about 11% below trend briefly in March of 2009. But at the beginning of July 2013, it is 62% above trend. In sharp contrast, the major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be around the 998 level. If the index should decline over the next few years to a level comparable to previous major bottoms, it would fall to the 450-500 range.

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Investors with a memory will remember that when TARP was signed on October 3, 2008, the S&P500 was at 1099 and then fell dramatically from there until early March 2009, and that on the third anniversary of TARP in October 2011 the index revisited 1099 exactly, in the wake of the summer debt ceiling brouhaha. But we haven't looked back since.

Unfortunately, the S&P500 has another date with the depths, but just hasn't set it yet.