Professor Mark J. Perry's Blog for Economics and Finance
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
5 Comments:
Hmm, this could be bad, the US stock market was getting highly overvalued at the last peak around 2007, and all indications were global markets were too. The fact that world markets are heading back to those nosebleed levels again may signal another crash, as the inevitable correction happens. On the other hand, I think there's a good chance this bulge will be bailed out by a real tech boom, but then I thought that would happen with the last boom too. ;) Frankly, these whipsaw cycles within the last couple years are a worrying sign, a good indication that real investors are not in control and that it's a herd of retail and other dumb investors driving the markets. You have to wonder if the massive govt interventions in 2008-9 haven't made these dumb investors overconfident and liable to do more damage.
Either equities are overvalued or markets are recognizing the fact that fiat currencies are in big trouble. With most input costs soaring we either have a lot of inflation that is not being reflected in the official data or we have a problem passing on the costs to consumers. That means that we either have an inflation problem or a profit problem. Neither is very good for the stock markets.
They don't include the stock markets in the inflation figures then?
Amazing, the magic that can be worked by printing a couple of trillion dollars.
I tend to agree with the other posters, professor.
The stock market is not the economy (don't have to tell you that).
One worrying trend is that regulators all over the world have imposed an even more perverted market structure in most of the world's markets that bubbles are much more likely. Thus, it's very difficult for me to take this data seriously as an indicator that the securities markets are reflecting an economic recovery rather than the results of perverted incentives.
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