New data on Corporate America and the stock market

Much to think about going forward in the stock market. As we approach the end of August and the beginning of the Fall, one thing on investors mind is this, Does the stock market have room to still go up since the rise of the past 3 months? To answer that question I will use The Chart of the Day below, because it shows we are in totally unchartered waters.


The scary thing to me from this chart isn't how far the S&P500 has gone up from its historic P/E ratio, but rather the implication for how far the market could drop, if reality sets in that we have a disconnect between the real economy and the stock market. This chart should give all great pause. To add money into the stock market is this level would seem to be the epitome of foolishness. If this doesn't look like a bubble, I don't know what would be a better example. It is a bit scary with a P/E of 145, which is a minimum of 3.5 to 4 times as high as it ever has been. Consider you have been warned! Unless we get a recovery which creates real jobs, we are looking at a very rough road ahead.

Are voters shallow thinkers?

Are voters shallow thinkers or are they just trying to make sense from all the spin out there? It seems to me that those that want to get above the fray can do so by taking the time it takes to learn about the issues independently from the spoon feeding we get from the media at large. The problem is that most are busy working trying to feed their families and take care of their needs and have little time left to do more than just survive.

What also contributes to this problem is that the greed in Corporate America is rampant. CEO's paychecks are way out of line to their contribution to the bottom line of their businesses. For example, Forbes has listed top CEO's and their Executive pay packages. I looked up one in particular and calculated what their hourly rate would be assuming they worked a 40 hour week. Now I know they work more hours but it still makes the point. Can you guess what their hourly rate might be assuming they work for all 52 weeks, where they really don't because of vacations they take? Well it will amaze you but the hourly rate for just one of the CEO's was $25,000 per hour. Now compare that to what an average worker makes and you get a sense at the outrage. As long as we keep the gap this large we are undercutting the middle class and the future tax base of this country.

Voters normally don't have the time to even think. Many eligible voters don't even vote as they don't believe their vote for any candidate will make any difference at all in their lives. One casual review that this is nonsense is to look at what happened over the past 7 plus years of President Bush. We need to choose our President more wisely or our fate, as well as our families and those generations to come, are doomed.

As a society, we think going up the corporate ladder is the way to be "successful". That is not true and is the source of a lot of our troubles. One answer is to work for yourself. That takes time too but at least you are in control of the outcome, not someone else. That is what's wrong with the Primary process. We don't control the outcome with our votes. It is decided by others who have self interests at stake and will not vote what we want but what's best for them individually. You see our Democracy has been bought and paid for by Corporate America as the ultimate bosses of most of the candidates. That is the one good reason to vote for Barack, as he is the least beholding to Corporate interests than either McCain or Hillary. Barack has the least combined income of the 3 candidates and is more like us than any candidate of my memory going back to Eisenhower.