Our Annual Repost Of The Top 41 Untruths Perpetuated By Wall Street

I have posted this in the last three Octobers. These are major themes we have written about extensively so I decided to put them into my list of untruths. When this was first posted, we were still in a bull market so obviously they were generally considered to be views of a crackpot by our fearless leaders on Wall Street and many global bulls who happened to also be American economy and dollar bears.

All of these untruths have proven to be accurate or there are seeds still building in their development. Since we are far from out of this crisis, none of my perspectives on these issues have changed. And many are still considered to be crackpot views.

If nothing else, this is a reminder of the constant lies and media manipulation that are so easily forgotten. As an example, it's pretty hard to remember the incessant babble on CNBC about how much global liquidity existed. And how bullish that was for the future. Even though we were writing of coming liquidity shocks.

Top 41 Untruths Perpetrated by Wall Street

1. We will get a healthy and much needed 10% correction and restart the second phase of a multi-year bull market
2. Buy this dip because because earnings were great
   
3. There is too much global liquidity for the markets to go down
   
4. Interest rates must go up to kill the commodity run, inflation and the global equity markets
5. China is an economic miracle
6. The 21st century is the Asian century
   
7. The U.S. (and I guess by implication all democracies) has lost its economic leadership
8. The stock market is cheap
9. Risk management.....Well, need I say more
10. Continued globalization is a foregone conclusion
    
11. Emerging markets and (Brazil, Russia, India, China) are a safe havens while the U.S. economy and dollar craters
    
12. American manufacturers cannot compete and offshoring or doom is inevitable
13. The dollar is doomed because America is a land of spend happy dunces
14. Capital equipment spending will rise from the ashes and drive us to a new bull run
15. The Federal Reserve will save the economy and by implication the stock market when they cut rates
16. Financials are defensive stocks because they pay a dividend
    
17. Defensive stocks are a great investment in any coming market decline
18. Inflation is out of control and interest rates must go higher
19. This has been the best global growth story ever and it's unstoppable
20. The American consumer and the housing market are the major concerns behind a recession. (They are symptoms.)
21. Oil is at a permanently high plateau
22. Commodities are in a twenty year bull market (Maybe many years of yo-yo action)
    
23. The rest of the world will pull the global economy through US weakness
24. Global companies get more than half of their earnings overseas and that makes them a great investment
25. There is always a bull market somewhere. (Yeah, and it will likely be in the U.S. dollar comparatively)
26. Sentiment is too bearish for the market to sell off
27. The U.S. doesn't drive the global economy any more
28. Markets must exhibit mania and blow off to have a peak (That's double speak for people who don't know what's going on and they need a sign from God to see a market topping)
    
29. The Federal Reserve is printing money (Total baloney)
    
30. Alan Greenspan caused all of this (Although he didn't help)
    
31. Goldman Sachs is a great investment
32. This can't be a top because Goldman is levered to the hilt
    
33. Wall Street is smart money
34. It is different this time
35. The real estate slow down will be contained
    
36. The US is a service economy and manufacturing doesn't matter anymore
37. The consumer loves high gasoline prices (or more eloquently spoken by Wall Street as high oil prices haven't hurt the consumer)
38. Unemployment is at 4.5% and by implication the economy is great
39. Apple and Google are the next great thing and deserve their stratospheric valuations (As I said before, I'd rather own all of the equities in Thailand than Google for the same sum of money.)
    
40. The Fed equity valuation model tells us the market is very undervalued
    
41. This final one is for emphasis and has actually been discussed above: the dollar will crater if the Fed cuts rates.