The markets could continue to soar INDEFINATELY, as long as investors can avoid reality at all costs!
Wall Street is actually very good at avoiding reality; witness the GREAT BUBBLE of a few years ago.
What has to happen for this to work is that EVERYBODY has to agree to AVOID REALITY.
If even one person starts to "take profits" the entire scheme
collapses.
SO THE ISSUE IS: DO WE HAVE CONSENUS ON LONG TERM REALITY AVOIDANCE?
I THINK WE DO.....AT LEAST FOR NOW.
Look at the Fanny Freddie Problems; totally off the media radar screens!
In more rational times, these problems would have brought the market down 100 points in one day! Not now.....!
We are probably in the BEST REALITY AVOIDANCE MODE I have seen since the height of the BUBBLE DAZE of yore!
Ignore still high oil! Ignore the chaos in Iraq and it's costs! Ignore the plunging Dollar! Ignore the twin deficits! Ignore four more years of incompetent govenment CLEARLY DEMONSTRATED every day! Ignore the punk and debt ridden low wage American consumer!
Adopt "circular reasoning."
For example: "The LEI was up because stocks were up and stocks were up because the LEI was up." Get the picture?
OK, now this. Then shout Hossannas when brokerage profits are up because stocks are up, so the LEI can now go up more, and stocks go up more and brokerage profits increase.......etc etc. See how this works?
CIRCULAR REASONING IS EASY!
BUT, IT ONLY WORKS WHEN EVERYONE DOES IT!
WALL STREET HAS IT'S BUBBLE BACK AND IT'S NOT GOING TO GIVE IT UP WITHOUT A FIGHT!
A real cynic might call the current bubble: THE DOOMSDAY BUBBLE, because NEVER has the underlying economy been more chaotic, more unfocused, more vulnerable, more lacking in a "new thing."
This could truly be THE LAST BUBBLE SHOW for a long long time on Wall Street! Grim Reality looms very large in 2005.
But Heck, enjoy it while it lasts! Maybe even dump some of those old "can't miss sure things" after New Years!
I'm doing just that.
