Micron (MU), a memory chip maker in the commodity, low margin business hit the trillion-dollar market cap yesterday joining the other 10 companies in the exclusive club. Thanks to a massive expansion of about 5 times increase in its price to sales ratio, from about 3, the median over the last decade to about 15 now. That brings the price increase of about 10x from the 52-week low of $92 to about $956 now, all in short 12 months.
Micron’s entry into an exclusive trillion-dollar market cap of about 10 companies is owed to the Wall Street frenzy fueled by the “rogue” sell-side analyst call with wild prediction of the Micron share price to $1600. It created a massive increase of $200 billion in market cap in just one day and catapulted the company in this exclusive club yesterday. Remember the equally wild prediction of $1,000 in the share price of Amazon (AMZN) back in 1999? The rest is history.
If the Federal Reserve (Fed) was not as “impotent and incapacitated” as it is today and truly independent then it would have started to raise the interest rates long ago especially in the wake of Iran war and resultant inflation that is already brewing in a material way on top of the pre-existing “sticky” inflation with the core CPI (consumer price index) well in excess of targeted 2% inflation for the last several years. Total or headline inflation is not too far from 4% for quite some time. Speculative mania is only a cherry on the top for the responsible Fed to act. However, “responsibility” is quite a foreign concept to the current Fed.
Fed of the past raised the interest rates steadily at the peak of the dot-com mania starting in summer of 1999 thru May 2000 and that did the trick to burst the bubble of late 1990s. The most speculative market index of all – NASDAQ hit 5,048 level in early 2000 only to crash by about 70%. It took good 15 years for NASDAQ to recover to its previous height and surpass 5,000 mark again. Yes, you read that right. It took 15 years to reclaim the same milestone – from March 10, 2000 to April 23, 2015 to get to over 5,000 level again.
See the “responsible” Fed rate hikes listed below to help “tame” the beast!
Source: Forbes Advisor
Current Fed is not “about to lose” independence. It “already has lost” its independence given the incessant pressure by the “The Biggest Bully” of the world on the Fed. That is the biggest bully sitting at the highest seat of the world… just a pure “evil” that “blind” populace of America is not able to see, unfortunately. In fact, the highest office on this land is not of the “Commander-in-Chief” to the prosperity, rather, it is occupied by the “CDO or Chief Destruction Officer”, not “CEO – Chief Executive Officer” who can take America to the greater heights. Instead, he will take America into the abyss of despair.
U.S. stock market of today is not a stock market anymore, rather it is a casino where the odds are rigged in the favor of the house.
Institutional investors are not truly investors anymore, they are “gamblers” betting like there is no tomorrow and having an “orgy” with other people’s money including 401(k) and retirement money pools for many ordinary Americans.
Bond vigilantes are in the hiding in a plain sight and just as “impotent” as the Fed is watching this “silly” game of “stock investors” silently.
If America is capable of electing a “moron” and evil president then clearly, it is fully capable of destroying itself. There is no doubt about it. It is unfortunate that the president still has a big sway onto the Republican party that has already destroyed itself. It became amply evident with the loss of his adversaries in recent primaries, namely Sen. Bill Cassidy, Rep. Thomas Massie and now Sen. John Cornyn.
Sane Republican party voices are getting squashed as the party has been taken over by the evil. Only a true “exorcism” can save the party from being possessed by the evil spirits, however, hoping for that in a very near future is like “day-dreaming”, a futile exercise.
This only goes to show how our culture has “devolved” instead of having to “evolve” – a responsibility of every human being. A beacon of hope that was this country is turning into an utter despair and full of pain to see utterly corrupt and evil acts of this presidential administration in broad daylight as the “fools and masses of ignorant” are being taken for the ride to the detriment of our country.
It is beyond belief that we are capable of “manufacturing” a crisis of this proportion. So, when the Armageddon hits there will be no place to hide. By the time all the dust settles, there would have been so much destruction all around that we cannot even imagine. It is beyond fathom. The Great Financial Crisis (GFC) of 2008 driven by equally insane housing market back then will pale in comparison. This is not just our view, however, echoed by many great minds and thinkers that we shall respect for our own benefit.
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