Wall Street Revalued: Imperfect Markets and Inept Central Bankers, Author: Andrew Smithers.
By Brett Arends – What do the following years have in common: 1853, 1906, 1929, 1969, 1999?
Those were the peaks of the five massive, generational stock-market bubbles in U.S. history.
U.S. stocks are now about 80% overvalued on certain key long-term measures, according to research by financial consultant Andrew Smithers, the chairman of Smithers & Co. and one of the few to warn about the bubble of the late 1990s at the time.
Today Smithers argues that stock prices are first likely to go even higher, because they are being driven upwards by two forces.
The first is the Federal Reserve’s “quantitative easing” program – the policy of flinging money at the banks in the hope some of it doesn’t stick, but finds its way into the wider economy.
The second is corporate buying. Under-appreciated at the moment is that the top buyers of U.S. stocks these days are the companies themselves. U.S. companies have been borrowing aggressively and using the money to buy their own stock. more> http://tinyurl.com/k2n4kjz