What Stockman says is that equities "shouldn't" be priced as high as they are, based on historical patterns, and that because history is doomed to repeat itself, equity prices will fall accordingly.
His warrant that history is doomed to repeat itself needs exploration. He reduces everything to the markets, and completely ignores social and geographical conditions around the world, as well as completely ignoring any meaningful comparison to other possible investment vehicles.
While I still believe that we are in for a bigger drop, I don't necessarily subscribe to his argument. I think that there will be some social disorder, and that the response to that disorder will be short-term fear, during which there will be a selloff. I doubt very much the SP500 will go to 1300 within the next 5 years.
The Fed can help put off that disorder by maintaining and following the fiction that employment/wages is improving, in order to justify rate increases. Yes, rate increases can happen. Many feel that ZIRP or NIRP is the path to destruction, and want to distinguish the US in some way by not implementing it.
Perception can create reality, for a time. As long as the election results are managed adroitly, and the messaging is well-controlled, I could see stable waters for some time--that is, no big selloff, but no big gains, either.
But I'm nervous. There are too many balls in the air. Too many people are nervous and cashing out, but the good news is that they're cashing out to the USA. If there is a place to be, it is here.
Off for a week, to go laugh at an overpriced beachfront condo, and do some architecture and engineering, with time off for skiing and sailing.
Maybe I'll report live from la-la-land.