from Jesse’s Café Américain:
As I had suggested a couple of weeks ago, the Street would keep stock index prices near these elevated levels while they concocted a few sizzling hot IPOs to squeeze out while the squeezing is good.
And yesterday Snap, the parent of Snapchat, has filed for the biggest new era IPO since Facebook. This one looks like a hot steaming pile of whatever passes for sound business valuations in this era of accounting relativism and asset bubbles, partie trois. But who can judge, when the world of investing has gone to the clicks?
While the jobs came in ‘higher than expected,’ the wage growth portion of that report was disappointing to say the least, with the highly optimistic wage growth from the prior report being cut in half on revision.
There is no real sustainable recovery. There is financialisation, fraud, and fiduciary FUBAR.
Let’s keep an eye on the IPO, because once it gets out the door and is done, and the secondary platters licked clean, I think the US equity market has a good chance of posting a 5% retracement of these hopey valuations at which they are currently trading. Note the emphasis on ‘chance.’
If the retracement is a reaction to some of the wild West policymaking coming out of our new leadership, that might be closer to ten percent.
If Trump is a financial reformer, then Haiti’s Papa Doc Duvalier was a social worker. And it looks like Wall Street and Goldman are staffing up the leadership of the Donald’s economic policies tonton macoutes. They might even make the hapless boobs at the Fed look good, and that is something I never thought that I could say.
Maybe things will just continue to muddle along, while the oligarchs continue to tighten their stranglehold on this beacon of freedom for the world.
And maybe this latest unicorn can fly.
Have a pleasant weekend.
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