I have to confess, these are trying times for those of us trying to make sense of the markets from a fundamentals standpoint. We are back in serious bubble territory, and during the heights of bubbles, all sorts of newly minted rationalizations are bandied about as the new wisdom or a 'new normal'.
I am simply amazed that we are in yet another massive bubble so soon after the last ones, and that so few remember the lessons from those events.
It's gotten so obvious and strange that everybody is openly talking about asset bubbles, including some of the largest asset managers (and especially those with real experience under their belts), and yet most are content to continue to ride the bubble until it bursts.
In recent tweet, John Hussman put it thus:
John P. Hussman @hussmanjp
It's funny how that Keynes quote about the market remaining irrational was the very same refuge bulls took to overstay in 2000 and 2007.
Yes, markets can remain 'irrational' longer than you can remain solvent, but this isn't really a case of markets being irrational – they are following the flood of liquidity that the various central banks are providing specifically with the intent of lifting asset markets (under the theory that eventually the economy will respond as well).
This has lasted a lot longer than I predicted, although the direction was not at all surprising. Here's what I wrote back in April of 2009:
The G20 group is obviously very keen to return their respective countries back onto a solid footing of growth and have recognized that their own fortunes are tied to the global economy. So they've come together and formalized the notion of stimulating the global economy, using the same mechanism by which their individual countries are being stimulated – by printing of money out of thin air.
by kugscheese 
