Thursday, July 14, 2016

Meet a Major League Money Manager Confused and in Denial

File under: Clueless about Austrian Business Cycle Theory.

Laurence D. Fink, who runs the world’s largest asset manager as chief executive officer of BlackRock Inc., said the current rally in equities may not be justified and won’t last unless earnings pick up. reports Bloomberg.

This morning via MarketWatch:
S&P 500 and Dow industrials scale new heights
U.S. stocks extended their run into the record books on Thursday, finding support after stronger-than-expected results from large financial institutions as well as upbeat economic data.


  1. Manias and manipulation can last a long time, but to confuse them with the business cycle may be viewed as hubris by many.

    To the gentlemans point, a decline in the earnings cycle most definitely is part of the business cycle.

  2. How is the money manager confused and in denial regarding this, Wenzel? What is so absurd about making the statement that company returns and claiming that PE ratios on stocks don't make sense in this market? You're definitely right about someone confused, and it ain't him.

  3. +1 RatFink. The stock market is not always a leading nor lagging indicator of the health of the economy or where we are in a business or earnings cycle. It's a shame that so many Austrians confuse this and make wild arguments about the stock market tanking or gold going to 5K based on a Fed-manipulated economy. ABCT is awesome to understand an economy, but to think that understanding somehow equates to market prognostications is ludicrous. Fink is merely saying what everyone in his business has been saying for years now. Trust me, he's a net buyer. It isn't us little guys that are causing daily new market highs on rising volumes. It's institutional sponsorship.

  4. We my have seen the market highs. Mark this post!

    1. I've seen the "mark this post" comment hundreds of times over the past 8 years on this blog and others. Confirmation bias? A stopped clock is right twice a day.