Other than an un-useful litany of political woes, the only actual point made by Prof Roubini is that 'PE levels are high'. Really - using what lookback period? did that cover periods when rates were 1.6% for the 10Y point? what percentile are we at now for him to be concerned? is PE a sufficient metric - or should one complement with PB and PS as well? a little more fact and a little less opinion please
All debt including zero coupon debt, can be quoted as having some annual interest cost. So don't see why Prof Shiller makes such a big deal about a rough ratio. Naturally, one can get more accurate by discussing interest coverage (interest payment divided by taxes collected). Interesting to hear Prof Shiller's criticism, but would have been even better to hear about the alternative suggested.
Dr Shiller has drunk the kool-aid. thinking regulations will and has alleviated bubbles. the 2007 debacle was the doing of regulators who convened in Basel. They said there is no capital charge for sovereign debt and very very little for AAA. So no surprise. The markets generated tons of paper that met the criteria. the banks got leverage. great ROI. the public went along for the ride. until the music stopped. our regulators are filled with too many academicians and lawyers. we need traders, portfolio managers to regulate. people who have some understanding of profit and loss
The Year of Betting Conservatively
Other than an un-useful litany of political woes, the only actual point made by Prof Roubini is that 'PE levels are high'. Really - using what lookback period? did that cover periods when rates were 1.6% for the 10Y point? what percentile are we at now for him to be concerned? is PE a sufficient metric - or should one complement with PB and PS as well? a little more fact and a little less opinion please
Debt and Delusion
All debt including zero coupon debt, can be quoted as having some annual interest cost. So don't see why Prof Shiller makes such a big deal about a rough ratio. Naturally, one can get more accurate by discussing interest coverage (interest payment divided by taxes collected). Interesting to hear Prof Shiller's criticism, but would have been even better to hear about the alternative suggested.
Bubbles without Markets
Dr Shiller has drunk the kool-aid. thinking regulations will and has alleviated bubbles. the 2007 debacle was the doing of regulators who convened in Basel. They said there is no capital charge for sovereign debt and very very little for AAA. So no surprise. The markets generated tons of paper that met the criteria. the banks got leverage. great ROI. the public went along for the ride. until the music stopped. our regulators are filled with too many academicians and lawyers. we need traders, portfolio managers to regulate. people who have some understanding of profit and loss