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Robert Reich , Former United States Secretary of Labor and economist said the following today in his blog post:
"Iâm not predicting an imminent collapse of the stock market but I am sounding an alarm. Consider: Retail sale are flat, median real wages are flat, nearly half the revenues of large U.S. companies come from foreign sales but markets abroad are going nowhere, and the ratio of stock prices to company earnings is higher than it's been since before the 2008 crash.
The only reason stock prices continue to advance is theyâre being pumped up temporarily by (1) corporate stock buy-backs and mergers, (2) anticipated tax reductions through âinversionsâ (companies planning to desert the U.S.), (3) low bond yields that continue to drive pension funds and other institutions into stocks, and (4) capital flows from the rest of the world, for which the U.S. stock market is a safe haven compared to tumult and uncertainty abroad. But this canât go on much longer. Watch your wallets."
"Iâm not predicting an imminent collapse of the stock market but I am sounding an alarm. Consider: Retail sale are flat, median real wages are flat, nearly half the revenues of large U.S. companies come from foreign sales but markets abroad are going nowhere, and the ratio of stock prices to company earnings is higher than it's been since before the 2008 crash.
The only reason stock prices continue to advance is theyâre being pumped up temporarily by (1) corporate stock buy-backs and mergers, (2) anticipated tax reductions through âinversionsâ (companies planning to desert the U.S.), (3) low bond yields that continue to drive pension funds and other institutions into stocks, and (4) capital flows from the rest of the world, for which the U.S. stock market is a safe haven compared to tumult and uncertainty abroad. But this canât go on much longer. Watch your wallets."
