If we’re looking at asset bubbles there are lots of examples of reversion to the mean and not one example of the new paradigm. With that kind of track record I believe the burden of proof is on the bull side of this argument, not the bear side. The bears have something to point to as a demonstration of how it can work and how it has happened in the past; the bulls don’t.
Just looking at the reversal of the markets over the last 12 months, I’d say the uber-bulls are running on empty right about now. Their primary argument before was “It won’t happen this time because it hasn’t happened this time”, a rather circular argument in that it could only be true until it wasn’t.
