my concern is the collateral damages of weak housing and banks would have on the econ in the next several quarters.
It's kind of like Star Trek where the US monetary policy is boldly going where no man has gone before. We never had a world reserve currency country in full throttle quantitative easing. If the ES cracks, you already know what Janet Yellen will do. This is where being too tied to history, i.e. historical margin debt to GDP implying a high, may be a mistake. The entire full faith and credit of the US monetary system is being used to prop up risk assets with QE. Since our monetary system and Dollar still has a lot of credibility, one can say stocks can be propped up for a long time ... for many years if FOMC wanted until they get what they want to achieve ... i.e. the self-sustaining economy that has stubbornly failed to materialize thus far. Hence, I would argue that future margin debt to GDP will make new all-time highs far above levels of previous stock market tops. The level of speculation forthcoming will shatter all previous known records. Let's welcome the forthcoming Tulipmania Squared.
what I find interesting - this year as the market is making new all time highs, the amount of ET top callers has dropped from prior years. In fact, I think I see more bullishiness than bearishness at the highs here at ET than recent years. I could be wrong, but it does seem less crash/top callers lately even though all time highs in what is historically a poor month for stocks. This itself might be meaningful change, but was hoping others could let me know if am wrong on my view here.
Your post is good for another 100 handles on S&P. Good job... I've noticed that these type of market calls on ET are an excellent contrarian indicator.
You do realize that you can't be wrong, as long as the idea that nominal growth is sustainable forever prevails. Of course for real growth to be sustained forever is impossible! But in the U.S. economy and most other economies, perpetual growth is a given. That is not to say that there won't be ups and downs, but it is assumed that the long term slope of the economy measured in nominal currency units is always positive out to infinity.. It is only speculation on my part, but i am supposing that the real driver behind nominal growth forever is human nature (which Malcolm Muggeridge said was made of vanity, greed and instinct). Incidently, you may have heard of Muggeridge's Law: which is essentially that fiction can never surpass the absurdity of real life. I would say the idea and non-critical acceptance of perpetual growth out to infinity is a nice example of Muggeridge's Law in action.