by David Kranzler
Investment Research Dynamics
The total US market valuation at $33.9 trillion is 157.4% of the last reported GDP. It’s the highest market valuation ever. The more the policy-makers try to pump and jawbone the market higher, the worse the consequences will be on the downside when the rug is pulled out from under stocks. The trigger could be anything. Eventually the market will acknowledge and accept the fact that the economy is getting worse and earnings will continue to decline. But fundamental reality is just one of many possible catalysts that will cause a painful drop in the stock market.
For now the rising stock market is shaping the Wall Street narrative and transmitted through the mainstream media that the economy is in good shape. Funny thing about that – the stock market is not the real economy. But this is: