I would say that something else got inflated--corporate profits--and one of the shocking things is how much corporate profit is wrapped up in very low interest loans, which will be highly vulnerable when the prevailing winds from the FED change.
Hey ghost and others, here is something for you to chew on:
One theme: QE inflated nothing but the stock market.
The important thing is how the future looks, how the market will respond to conditions going forward.
As for where I think we are, this is corporate profits after taxes but without inventory adjustment as a percent of GDP:
This is nominal corporate profits after tax and SP500:
Either profits have topped or that point is close (we might need another 1-2 quarters to tell for sure), and once profits are in decline, valuation gets out of hand quickly if there isn't a correction in the market. Yes, there will be a stimulus top, but you cannot predict the timing or the extent of the top at this point.
My stocks as of today:
Sorry, Ghost, the sky is not yet falling at my house...and once again, this is why you buy STOCKS, not mutual funds.
YOU'RE LOOKING IN THE WRONG PLACE FOR THAT CRASH (this year)
I've been talking for weeks about the (no longer coming) crash in commodities. Remember when Sagarin and I were talking about ~$38 oil? See this chart from Goldman-Sachs:
$25 oil by Christmas? It's going to be a really good Christmas at my house if that happens. I am presently short:
This crash may only run to the end of the year, but there is a LOT of money to be made here. But only if you're well capitalized and experienced in trading futures.