Stock Markets Rally 50% From Recent Lows!

The Dow Jones is up 50%. The S&P 500 is up 59%.

Surely, VFD, You are not going to say this is bad!

Yes I am, and don't call me shirley.

The S&P is running something like a 140 Price-to-earnings ratio these days. This is not investment-grade. Traditionally, when stock markets made sense, P/E was in the 10 to 15 range. There is, to use a euphemism, quite a ways to fall from here. There is nothing fundamentally supporting this rally, aside from the "what else should I do with my clients' money" type of investment advisor/broker/trader. Demand for pretty much everything has been falling the whole time P/E ratios have been rising. The prices of things (a lagging indicator of deflation) are falling. We are poised on the brink of a full-on economic collapse. Unless the government continues giving away "free" money. Then the collapse is worse, and a few years later.

In eight years, we went from, what, 64% to 72% of GDP (our defecit level) under George Bush. Obama has got us all the way up to 100% in his first two years, and that's just the low-ball projections! The dollar is only not collapsing because everyone else sucks worse.

The main reason my party hat is still gathering dust, however, is this:

Japan had FOUR 50% rallies in the Nikkei on the way down during their famous "two lost decades." I bet my co-worker we would hit DJIA 6000 this year. We may not, but I don't put it out of the question for the next fall-off-a-cliff coming up.

"I KNOW it's true, I read it on the Internet!"