“It’s Just Like 1998”: Why One Bank Is Haunted By Visions Of Credit Tremors Bursting The Tech Bubble
by Tyler Durden
ZeroHedge.com
Fri, 06/08/2018
Earlier this week, Goldman Sachs, whose market-timing calls leave much to be desired, declared that tech stocks are “not a bubble”, and went so far as to predict that the secular increase in tech names could continue for decades, spawning vivid memories of Goldman predicting $200 oil months before the start of the second great depression, and before oil crashed by $100/barrel, wiping out a generation of muppets.
However, let’s just say that not everyone agrees with Goldman.
Back in March, just as the tech sector suffered its first big rout of 2018, Bank of America had the gall to tell the truth and observe that the “e-Commerce” sector, which consists of AMZN, NFLX, GOOG, TWTR, EBAY, FB, was now up 617% since the financial crisis, making it the 3rd largest bubble of the past 40 years, and at this rate – assuming no major drop in the 6 constituent stocks – was set to become the largest bubble of all time over the next few months.
Fast forward to today, when in a dual-pronged attack, Goldman’s ridiculous thesis was attacked again not once but twice, first by Leuthold Group’s Jim Paulsen who said that tech ETFs now account for 30% of trailing 2 year net fund flows, which was the biggest since – you guessed it – the dot-com bubble. Paulsen, who traditionally has had a cheerful, bullish take on markets, even went so far as to slam FANGs as the de facto harbinger of the next tech bubble:
“Haven’t we seen this movie before? Technology takes over the stock market late in a recovery cycle, seemingly making the bull ageless, pushing portfolios toward a more concentrated new-era exposure, stimulating investor greed bolstered daily by watching a chosen few (FANGs) rise to new heights, and convincing many that tech is really a defensive investment against late-cycle pressures which trouble other investments.”
The Rest…HERE
