[quote=livinincali]
Japan has been trying to push their market higher for 20 years. Ben Bernanke didn’t stop the market from dropping more than 50% in 2008. The people that are pushing the market higher are those that now naively believe in a power that Bernanke doesn’t really have. They’ll eventually get slaughtered in the popping of the bubble like they always do. Might need to go a lot higher first, I can’t tell you when it will happen, just that it will. The only sure thing from the fed is that they can always create a bubble somewhere and they never see it until after the fact.[/quote]
I have to disagree about there being a bubble in the market right now. If there was, the market would be 20-25% higher than it is. By historic levels, it’s currently valued pretty average based on earnings. That doesn’t mean that we’re not in for a technical correction, but that’s substantially different than a bubble bursting. And even if there is a significant business slowdown, even in hindsight, that wouldn’t be indicative of a bubble. Current earnings are real.
I do have great concerns though, that the economy will falter. The US economy has never survived the levels of spending cuts by both federal and state governments of the last 3 years without a recession. And that’s before the spending cuts that the sequester will bring. We can quantify the dismal failures of austerity in Europe, and fortunately have not yet been dramatically effected by US austerity. It’s very possible we will. And soon.
