Despite the already enormous overvaluation of the securities listed on every other market, the financial markets continue upwards. But until when?
After a short reversal in August, the stock markets began to rise again with arrogance, failing to face the harsh and obvious reality: the recession is coming in all three continents, and will hit very hard
Yet, despite the already enormous overvaluation of the securities listed on our Mib40 as on every other market (in particular on the S&P 500, with prices/earnings per share above 32), despite the macroeconomic data providing a clear slowdown of the world economy, despite interest rates suggesting serious difficulties for already indebted businesses and families, financial markets continue to rise.
Even oil has not stopped rising (after the brief pause in August) and remains stuck at 87 dollars.
So what happens? What happens is that the market is now in the hands of "gamblers" and has become the place where you don’t invest but have fun like in a video game, regardless of the real valuations.
Some claim that these are small traders, united to make prices rise or fall. Others blame investment funds and investment banks: but anyone involved is now in the grip of total greed. The lessons of the past have evidently not helped, and I imagine we won’t realize the danger of the moment until something sensational happens. But the question I ask myself is precisely this: Is it possible that we always have to wait for a disaster to regain a modicum of clarity?
We now only think with the "trend" and the graph regardless of excessive values. A reference to 1929 is mandatory precisely because of the relationship between the industrialization of that period, considered the manna of the markets, and today’s Artificial Intelligence. And today, precisely, we are at those same levels of irrationality and with that same dangerous idea that sees the stock market now even totally disconnected from economic-financial reality.
Original article published on Money.it Italy 2023-09-13 07:30:00. Original title: La follia rialzista dei mercati finanziari prosegue imperterrita
