Mark Hulbert, the longtime publisher of Hulbert Financial Digest, posted an interesting piece today on Marketwatch about interest rates and P/E ratios.
The crux is what comes down goes back up. Looking at data going back to 1871, Hulbert notes only two well-defined periods, each lasting more than 10 years, where interest rates remained in an extended uptrend.
http://www.marketwatch.com/story/pe-ratios-to-drop-20-in-coming-years-2013-07-31
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WARMED-OVER KEYNESIANISM
The Summers-Yellen plot thickened Wednesday as President Obama reportedly in a closed-door meeting with Democratic members of Congress rejected concerns that Summers was less aggressive in pushing economic stimulus.
Yellen is viewed by many as the more dovish of the two and more likely to push for more QE. Either way, according to some traders, both represent a warmed-over serving of archaic Keynesianism.
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